Master Real Estate Deals with This Simple Strategy 💼

Hello?

Hi, is this Jerry?

Yes.

Hey Jerry, my name's Nathan and I just was wondering, do you still have about 10 minutes to chat?

Yes.

Okay, great. Yeah, so I was calling about your property. I actually, one of my friends lives right over there and he said, hey, he saw the for sale by owner sign, so he sent me your number to give you a call. Um, but I'm just kind of— I have a couple questions for you about the property. Uh, is that, is that okay?

Sure. I don't know, let him know the answer, but it's, it's all right.

Uh, so I'm an investor. I usually look to like flip homes, but this one looks like we would be purchasing it and you're selling it for the land value.

Yep.

Okay. And I was kind of curious because usually when I talk to people, their, their first, uh, I guess their first strategy is to like list it with a real estate agent to see if they can get the most. And I noticed you're selling it for sale by owner, so I was curious if like you've explored listing it and you're just not interested in that, or, or what made you—

I retired. I retired as an agent about 6 months ago.

Oh wow, okay. So you're like—

so does that explain it? Yeah. And my husband's an agent, my son's an agent, so we have multiple agents in the family. But my mother is the one who owns the property. She doesn't want to pay any real estate fees if she can help it. And honestly, I think I can manage it. I've sold commercial properties, lots No, I'm not a current agent, but I know what I'm doing.

No, awesome. Yeah, because I was kind of curious, because usually, obviously, you know, as an agent, you put on, on the MLS, more eyes will see it. But are you, are you mainly looking for, you know, a cash buyer, someone that will like, you know, not have an agent that represents them and not— or you're just looking directly to work with a cash buyer?

No, I'd actually prefer if the buyer has an agent because it all works better if they have an agent. You know, we're willing to pay some— I mean, I'm, you know, willing to pay some kind of BAC to the agent.

Okay.

Um, you know, again, this is, you know, trying to talk my mother into selling it, so it's— she's not necessarily willing to pay a lot, but of course she needs to.

So yeah, so anyway, yeah, I'm not representing— I don't have an agent, but if we needed to get one involved for you to feel more comfortable, that would be no problem. But, you know, I wouldn't— well, there wouldn't be anything—

I'm assuming as an investor, you know what you're doing and you're somewhat sophisticated, and, you know, I would be more than— I'd be fine with that. But I mean, I've had— I mean, I probably had 60 inquiries or more.

Oh my gosh, just from that sign?

Wow. Yeah, most of them are people like, you know, how much is your house? And when you tell them, I said, okay, but we're not selling the house.

Yeah, no, I get that. That you said that the house is a teardown, so I wouldn't be looking to buy it. I'm looking at, uh, well, you said it's commercially zoned, right? So I would—

I was on— in fact, you cannot get a residential permit from city for that property. So even I— which I have to tell people, look, even if you wanted to, you know, fix up the house, you can't get a residential permit. It's commercial.

Yeah, no, definitely the value is definitely in the land. So I was kind of— you're an agent, I was looking at some comps online. I'm not an agent, but I was just looking at what I had access to. Do you, um, how— you said you wanted $800,000 and it's almost an acre?

Yeah.

I'm just curious, were you— did you run comparables on it to kind of get that, or was that just a price that your mom had in mind? I was curious how you came up with the—

that's— we're gonna comp. There's another commercial lot in town, and so we could pump it against that one. That's about the same price.

Yeah, because I looked at, uh, there was like a 0.46— there's a couple, uh, residential lots, but they go— it seems like they go for a lot less. I think I saw one that was like $146,000 just for like a residential lot. So is that— is that true as well from what you've seen, is when it's commercially zoned the value is a lot higher?

Oh yeah, of course.

Okay. Well, have you called the city, um, to find out like any, any information, more information on like what it would take to build on there, what they're allow— allowing to build? No, done any of that?

No, I knew more a couple years ago. One of the city managers, city manager is a good friend of mine, but I haven't talked to him in a while. I mean, I'm assuming that, you know, you looked at what's next door, like, well, you're not from the area, but next door to the property there's an olive dollar. So you've got a retail building with parking, and I'm sure the city would love that same sort of thing.

Yeah, yeah. I live in Sandy. I've been to Santa Quina a couple of times, but it's just— it was nice because my friend saw that and we're always looking for properties that aren't on the MLS because, you know, it's usually able to negotiate without the fees involved.

And I, you know, I'm going to tell you, I mean, I tell people all the time, if you're interested, make an offer and you never know what a buyer will accept. And I, you know, I can't tell you that either. I mean, I I know what my mom says she'd like to get, but if somebody actually made a reasonable, realistic offer, you know, I mean, $300,000 is not going to cut it, but you know what I'm saying? Mom might just consider it.

So yeah, yeah. Is there like a timeline that you'd like to make a decision by? Is it like you're the first person that can get you an offer that, uh, makes sense, you're willing to pull the trigger? Do you want to wait a little bit? Just kind of curious.

No, we're not, we're not, we have no timeline.

Okay.

All right. So the other reason it's priced— yeah, yeah, it's priced what it is because, you know, I mean, if we were in a rush, it'd be probably $100,000 less, to be blunt about it.

Of course. Yeah. And like you said, once that offer comes across, you know, and it makes sense and everyone feels good about it, you know, you could make a decision today if it was the right offer, right?

Yeah. Well, no, I But it won't be today because we have an 85-year-old woman who's on the edge of dementia. So then it would be, you know, I think it would be relatively soon after the offer is made. I would— if anybody makes an offer, I would say, look, there's no point in putting deadlines. Like if they used a regular rep, there's no point because, you know, she's going to use her— she's going to ignore your deadline and decide when she wants.

Wow. Yeah. A contract with no deadline. That's You know, so let me ask you this.

Well, I mean, I've sold commercial properties and it's really common for them not to have, you know, to have pretty open-ended deadlines.

Yeah, because it takes so long.

Yeah. And so it's stupid, you know, on commercial properties especially, unless there's a big rush on it. But it's stupid to put deadlines in on when there's usually a lot of due diligence that has to go on and sometimes financing takes longer. And so rather than, you know, constantly rewriting anybody You're right.

And I think, uh, you already said in the text that you're not looking to finance, uh, the property. You just want to— you just want to be out of it, cashed out, or a loan.

She's 85. She doesn't— doesn't need to finance anything.

Okay. Um, so to kind of tell me, you have a lot of experience. I've been doing this for a while. What would you— what would be the best case scenario for you? Would you want someone to come up with an offer, go under contract, don't really worry about putting a deadline, let someone do their due diligence and talk to the city before they, uh, close? Or what's your expectation?

Um, so what I would anticipate, best scenario, is first of all, the person who wants it needs to talk to the city before they make the offer.

Okay, okay.

Make sure that it will, you know, they can do what they want to do or see what the limitations are, if any. Then I would say, when I say no deadlines, I'm going to say for this kind of property, I think it ought to be closing within 60 days. I think 60 days due diligence for commercial property is great. We don't, we don't, you know, we don't want to partner with anybody. I don't want to wait anybody else to figure that out before they make an offer.

Okay.

And then, you know, once they know, they can make the offer and go for it. And, you know, pretty straightforward, clean offer, I'm going to say.

So, right. Yeah, because with the due diligence, I'm trying to think, if I were to call the city and, and get a, you know, let that ask them the questions and figure out if we were able to build and do what we wanted to. And we went under contract, the 60-day due diligence would just be to kind of do the odds and ends that need to happen before, you know, I guess we close, right?

Yeah. And if we can close sooner, great. But, you know, I would say yeah. And the city, the city knows, I mean, they're very aware. The city's city office is right across the street. So they're very aware of this property and would love to get the dilapidated house across the street, you know, down and have something else built. So, so, you know, I think depending who you talk to, you'll find that they've got some pretty good ideas already of what they're willing to allow and can give you information pretty quickly.

So, okay, well, what I, what I, I'm just very transparent with how I work. So this, I'm, I mainly work when I buy properties, I mainly look at like apartment complexes and, um, you know, to rehab properties. So I'm kind of newer to the land, uh, and developing, but I do have a couple business partners that, um, that do that. So my goal would to reach out to them and see if we could partner on this opportunity. So I guess my question for you is, are— is there anybody that like I need to— like, do I need to act quicker then? Because I would hate to like go through the process of like reaching out, trying to figure out, you know, call the city, work with people, and then I get done and then you're like, oh, I already signed, it's under contract with someone else. So I just don't want to waste my time, you know, or your time.

So we have no offers. So I've had lots of inquiries. I'm going to say, I'm going to say I've probably had 2 out of the 60 inquiries, 2 that I'd say were from people who actually knew what they were doing.

Yeah.

Right. And obviously it's not on CoStar or LoopNet. It's not going to list. So, you know, we're not necessarily going to reach the people who do know what they're doing.

Yeah.

So, you know, but, but this I mean, the other reason, because I could put it on— I mean, like I say, you know, I'm not an active agent, but I have agents who are all around me in my same house. So we could put it on MLS pretty quickly. But this, this option is working for my mom because she doesn't necessarily want to sell it.

Yeah.

So we're kind of giving her a chance to, you know, kind of get the idea and kind of think about it and, and you know, realize that, okay, I can kind of get used to it. So I guess the reason I'm telling you all this is that means that, you know, I don't have a run on it. It's just people who drive by or hear about it or spread the word, right? So that's, you know, so no, you don't have any issues at this point. I don't have anybody making offers. Any— I have this, you know, it's 2 or 3 serious inquiries, you know, they were kind of off. Well, let me think about it. I'm going, that's fine, you know, take your time, think about it all you want. So You know, I'm going to go, you know, no, you don't have to rush.

Okay. Gotcha.

If that changes, I can certainly let you know and say, well, you know, which, you know, I don't know. You said you're new to this, but this is what I found as an agent and also an investor in real estate. About the time I tell you no one's interested, suddenly you have 6 offers. Yes. You're like, what? It sat for 6 months with nothing. So, you know, that whole thing about, you know, once it's out there in the atmosphere, I totally believe that.

No, that's true. In my experience, like, what I focus on, like, mainly is if I don't know how to do something, I usually— I have a pretty good exclusive network through, like, going through a lot of coaching programs and knowing, like, going to meetups. So I know who does land. So my goal, if, if that'd be okay with you, is to reach out to them, see who'd be open to partner with me on this, and then, uh, you know, try to take it down and go through that due diligence process even before we you know, need to sign paperwork. But, but again, I don't, I don't want to do that if that wasn't a good option for you, like, you know, for me to reach out to the people that I work with.

No, you have— I'm going to say take the time you need to because, you know, when we sell this deal, I want it to go to somebody who does understand what they've got, you know, do something. It's a great piece of property and it's in a great location. And so I really like to see somebody who understands what they have and make the best of it. So no, take the time you need. There's nothing like being smart before you invest.

Yeah, yeah, for sure. And if you could just keep me in the loop, if someone does come and you're like, "Hey, we're thinking about accepting this," and then I kind of know I need to hurry a little bit. Because again, what I focus on is mainly single-family and apartments, but this would be an easy situation. I wholesale a lot. I don't know if you're familiar with that term.

Well, absolutely are.

Yeah. So that— if that's ever something you'd be interested in as well, where I could, you know, just reach out to my whole network right now, I wouldn't plan on blasting this out because I don't have the contract. But if you were ever interested, I could send it out to all the buyers that I know in Utah and we could get bids and see what they're willing to offer. But I don't know if that's something that you're interested in at the moment.

I'm flexible. We're flexible, right? Yeah.

Would that be something that— because that's a lot of the time what I do is I tell a seller like, hey, look, this is where my price would be. But I know, I know that there's a lot of buyers that can pay more than me. If I— if we can sign an option to purchase agreement, which allows me to just reach out to my network, like legally, and say, hey, this is a property, what would everyone pay for it? And then I take those offers and then I present them to you. And then, you know, if you like any of them, you can accept them, then we can proceed. But that's, that's what I do a lot of time when my cash offer isn't accepted.

Well, you know what I would say? I'm sure we consider it. I just have to have it. Whatever we do, I'd have to make sure it's simple enough and clear enough for me to explain to my mother so she'll understand what we're doing and not get frightened off or worried. Of course. That would be one thing we're talking about here. But no, I'm fine with that.

Yeah, it would. I don't think it would frighten her at all because basically all we do is we— the option to purchase agreement says, hey, you know, if we are able to find a price at this offer, then, you know, then we can proceed. If the seller— if you feel, you know, like you're ready to go. And most of it, I'll be honest, it probably will— they'll probably come in a lot lower than what you're wanting. But at least we would have like some concrete offers, and then, you know, we can make the decision from there.

Yeah, and then do you take a commission or something for that, or are you an agent?

I have the cash— I have the buyers pay my fee, so it doesn't come out of what you have to pay. So, for example, hypothetically, if you want $800,000 and they offered $820,000, then they would give me, you know, a portion of that. They would pay my fee. It's called a wholesale fee. They paid my assignment fee, so it doesn't come out of what you get.

Okay, that makes sense. I've— okay, that's great. Yeah, I've seen, um, a lot of different ways, so that, that's it.

So yeah, if that works for you. And the good thing about an option to purchase agreement is like, it's not, uh, binding. Like, if you, if you don't want to sell it, like, there's no problem. I'm not going to make you, but at least we'll have some options. So it— all I'll need is just, um, your email, and I can— if you could text that to me, and then I'd have to send it. I'll sign it, and I'll have, um, I don't know, are you able to sign, or would your mom need to sign it?

She owns it. She'd have to sign it. So, um, the only thing though is time frame, because I know typically these kinds of deals, so, you know, we wouldn't want it tied up for very long because I know my mom wouldn't have the money to do that.

How long could you give me, um, that you'd feel comfortable?

Um, I don't know. Let me talk to my mom and my siblings, see what they think.

Usually, typically, it— we— within 14 days, I'm able to send it out to my network and say, hey, what would you pay for this? And no. So if 14 days would be fine with you, that would give enough people—

yeah, I was thinking like, you know, we're not into 12 months or 8 months, you know.

No, no, no, no.

3 months would be you know, somewhat reasonable. But yeah, that's fine. 14, like, you know, I don't know, 2 months or something, that'd be fine. Give you time to do your thing.

Yeah, yeah. So 14 days would just give me enough time to get the interest in the offers coming in and them to do the due diligence. And then once we, we pick, we go with a specific offer, then they would want their specific, like, you know, 30 to 60 days. But this is just to gauge interest and, and say who's, who's serious without you having to pay commissions or even put it on, you know, any of those sites.

Yeah, I think this sounds really interesting. Yeah, I'll send you my email address. And then, like I say, I still have to run this past my— of course, we kind of try to help my manager there.

Okay. Yeah. And it's fairly simple.

Maybe 5-year-old. It's like dealing with a large 2-year-old.

No, I've actually— I've dealt with a lot of situations where, you know, the kids are helping navigate the situation. So I'm patient. I understand the situation. You got to navigate it tactfully.

Yeah, that's true. It's kind of a pain. So in your investments, do you have any out-of-state investments? Do you follow up on those at all or do any of those? I'm thinking like specifically Wyoming or Idaho.

I do. Yeah. So I actually invest nationwide. So I have a deal right now in Colorado that it's a, it's a 12-plex. I come across quite a bit. So if you, if you're a buyer or anyone in your family's a buyer, you could always we can connect on that way too.

Where is this 12-plex located?

It's called Salina, Colorado. It's outside of Pueblo. Are you familiar?

Yeah.

Yeah, so it's a— this one came from— so I run a lot of online marketing. This one came from our pay-per-click ad campaigns, and it's a seller that wants to sell his 12-plex, but we're in the middle of negotiating like the price and everything, and then I was going to wholesale it, like get it for a certain price and then assign it to someone and, you know, make a little bit of a fee. But is— are you interested potentially in that? That would be—

yeah, that's right. Is he sophisticated enough to actually have calculated a cap rate? Do you have any idea?

I have the— yeah, I have the pro forma and the cap rate and I have all that information. So if you're interested, I can also email that to you as well. The seller is open to financing the property. So if you're interested in picking up something in that area with terms, we could work something out.

No, we'd probably be cash.

Yeah. Terms can get a little, can get a little shaky sometimes.

Well, it depends. But I mean, we have, we have, we have some cash we need to do something with. I mean, we actually pulled all of our investments out of Utah and went to other states because, A, we could get much better pricing, cash flow way better. Oh yeah, much, much better. But we also live, um, you know where Flaming Gorge is?

Um, I do, yeah.

Yeah, well, we live there, which means we're right on the Wyoming, Utah, Idaho— or not Idaho, Utah, Colorado.

That's amazing. I love that. So, so what, what I can do is if you kind of give me a buy box or an idea of where you're looking to invest, I, I coach, I teach people how to get started in wholesaling and real estate investing, and I also look for my own apartment opportunities, but I want Utah and you're saying you want out of Utah. So this, this might work good. I come across a lot of opportunities.

Yeah. No, we pulled up— well, funny story. So I had, you know, my husband had a couple— he had some real specialty clients that were investors who all had money in like annuities or mutual funds, and they pretty much pulled the money funds out of all of those and invested in multi-units or in rentals. With his help. And it's like, wow, was this ever a good thing to do? So yeah, one of those— and one of those clients of his had 18 units in Payson. Yeah, that he's going to sell us. And we— and we figure, well, okay, we'll pull out the funds that we have and put it into that as our final retirement move. And it was going to be like $1.4 million and the cap rate was 8.5. But there was a lot of room there because the bill, you know, the Building was in— it could be rehabbed.

Right. You said— you said— sorry, you said it was an 18-unit for $1.5 million? Yeah. That's pretty good. I just did one. It was an 8-unit in Springville for $1.1 million. So, yeah, it's—

well, it was like 5 years ago.

Okay. Okay. Gotcha. Yeah. Now it'd be probably worth a lot more, right?

Probably. But what happened was my client, my husband was trying to sell another building for the same buyer, and he had— or not same buyer, the same seller— and he had a buyer come up and say, you know, I'm sort of interested in that building, but what I really want is the 18-plex across the street. Which my husband said, well, amazingly, they're owned by the same guy. And he decided it'd be better off for him to service his loan by selling both units, which left us kind of in the lurch with a bunch of money and nowhere to invest it. So we moved out here, we're wandering around Wyoming, and up comes the 12-plex.

Wow.

But we ended up purchasing for $380,000.

And I can't believe that 12-plex for that much. That's amazing.

Right now we've put $200,000 into it, but still. And the cap rate right now is probably— I don't know, it's probably about 9%. Well, because I got it for so low, it's probably about 9% or 10%.

That's amazing. Yeah, that doesn't exist. That doesn't exist where we're, you know, in Salt Lake.

And no, the thing is, is we run across those all the time. The thing about buying in places like Wyoming, since I now live in a rural country, is you just have to be aware of what's available in terms of services. Like, you know, I have buildings in Kemmerer, Wyoming, which is a lovely little town, and there's one repair guy, you know. So he's my first, you know, my go-to guy. But that's the hard thing about being in rural areas. Is how do you get them serviced? And so, you know, there are a lot of opportunities, but I'm not going to jump on them because I'm thinking I'm not going to drive 6 hours to personally fix something. And if I can find a plumber, then forget it.

Well, you know, I'm really glad I made this contact because like I was telling you, I, um, I'm doing a lot of apartment complex marketing, and, uh, one of my, uh, my family members actually, like, he has a website where he generates a lot of traffic for apartment complexes. So we're getting leads from, uh, you know, all over and a lot of rural places as well. So You know, well, maybe I can send you ones that look good and I can send you the breakdown of when we underwrite them. And if you like it, or maybe, you know, your husband knows a couple of people that need to place their money somewhere. Maybe we can work together.

Yeah, that's, that's okay. I'll send you my email address then.

Okay. So what we'll do, just to recap, is I'll send you— if you can send me your mom's name, I will send you an email with the option to purchase agreement just for 14 days so I can send this out to my buyers that buy land in Utah, and then I would, you know, present those offers of what come in to you and say, do any of these look good? And if they do, we can move forward. If not, no worries. And I can also send you that 12-plex to look at.

Yeah, okay. This will not be a rush job because my mother lives in Springville, 200 miles away. She's not going to sign anything online, so— okay, so I'm not anticipating being back in Springville for maybe in 2 weeks, and then I'll be out of town for like 2 months off and on. So I will do what I can to get the sign, but this is probably going to be a slow burn, I'll be honest. And just because of logistics, if nothing else.

Yeah, yeah, no, I understand that. Well, if it's going to be that long and, and I'm not really putting this online or doing anything, um, like on the MLS or like on Zillow or anything. Do you even care if we sign something? Do you mind if I just reach out and send some emails and some texts out to see if people would be interested, or would that be okay?

Yeah, yes, you can. I mean, if you come up with something, you know, then we'll figure out how to get the contract signed.

Yeah, because the purpose of the option to purchase agreement is just so we're on the same page. But verbally, if you're good and I'm good, you know, I'm not worried about it.

No, we're good. Verbally, we're good. Don't worry about that.

Send me your email and I will send you the 12-plex info, and, you know, I'll put you down down as a buyer that— and if you just tell me Idaho, Wyoming, what parts, as I get leads from those areas, I can send them your way as well.

Okay, sounds great.

It's Jerry, right?

Yes.

All right, thank you, Jerry. Talk to you soon.

Thank you, Nathan. Yep, bye.

Bada bing, bada boom, guys. Just transparent, we're gonna wholesale the house. Who's got a buyer who wants land in Santa Quin, Utah? Let's do it. Easy. Be transparent, be honest. Let's get it. Peace.