When A Motivated Seller’s Price Is INSANE… Do This!

So this is a situation that 99% of real estate investors, wholesalers find themselves in. They're talking to a seller that wants way too much money. You get on the phone with them and then immediately they're like, just give me your offer, give me your best offer. So it's really hard to connect with them, find out the motivation. So that's what happened in this deal that we have right here.

Yeah, I'm busy, so let's just get right down to business.

Let's do it.

What's your cash offer for it?

And he just wanted to get me off the phone. So we started talking about the condition of the property. You know, what I can pay depends on the condition of the house. He started telling me about what the house was worth, what work he thought it needed, and it was just like kind of generic stuff like carpet, paint. He actually doesn't live there, there's a tenant that lives there. I said, do you have any pictures? Or, I don't have pictures. So I just thought it would, uh, be easy to just go see the house. This is an interesting situation, very hard to develop rapport with the seller over the phone, wants way too much, and I thought this be a good opportunity to show them, hey, I'm willing to go to the house, show them that I'm a real investor. I think I can set myself apart from the other investors that way. After seeing the house, then I can make him multiple offers. If I can buy it for cash, if I can buy it on terms, if we can do an ovation, we partner on the property together and do a flip together, a lot of different options. But you're going to see a house, you need to determine, okay, is it worth my time? Is the seller really going to sell? Is their motivation. If it's someone that's just like, yeah, I'm gonna list it if I don't get what I want, or there's like, I'm just gonna keep it if I don't get what I want, that's another reason not to go see the house because you can just give them a low range and see what they say to that. But anyway, that's kind of in a nutshell what we're going to do today by seeing this house. Here's the house. Are you Jeff? Nathan.

Nathan?

Yeah.

Is this Michael? Are you Michael?

I am not.

Oh, you're not?

Unfortunately, I think it's a double showing at the same time.

Oh, it's okay.

So what's, what's kind of the situation on it? Like, are you moving out of here and he's deciding to sell it or?

Yeah, he's had his own health issues and he's been amazing to work with.

Right. Yeah. Does the house need like a ton of work?

When we moved in, we needed a ton of work.

Okay.

And it maybe probably got worse.

If we were to buy this, or then they were to buy it, like, when are you planning on heading out, moving out, you know?

I'm hoping, like— so, like, I was just telling him, I took 2 dump runs already at 30 tons each, and I even had a dumpster dragged in my driveway, and it's still full of crap.

Would it be helpful if we were to help you move some of this stuff out, like hire a crew, or you're You— are you wanting to go through all of it yourself?

And I, I'd probably get some help. Yeah, if you're willing to pay for a crew, right? I'm willing to take your crew.

Yeah, but sounds like whoever was to buy it, you might need like a month or two to get out, or at best, if I could. If I buy it from what's his name, he'll probably— you know, I would be your new landlord, or, you know, whoever, until you move out.

Yeah, and I would be willing to work with whoever, however, to make it work. Okay.

So are we good to go in or?

Yeah, let's—

yeah, let's go in. You guys can go first. So multiple investors involved. Hey, that's just how it is. That's what it looks like. And just from looking on the outside, roof looks okay. If you're going to sell this thing for top dollar, you're going to have to, you know, fix the siding, kind of maybe even paint it. You got the screens, the windows are okay. You're going to need to landscape it too. Like if you want to sell this thing for top dollar, you're going to have to fix the yard. So this might not be the best option for a fix and flip at the price the seller wants.

You're probably going to have to—

this would be a rental. Okay. Yeah, that's fine. Kind of take us through a little tour if you can, and I'll see kind of what work needs to be done.

So here's your garage. Okay. And this is a fraction of what was in here.

Yeah, you said 30 tons of stuff?

60 tons.

60 tons. You can see this probably we need to redo.

This is hypermica.

Yeah, it's just wood.

The cabinets aren't bad, but the floors— these are original. Do you know if they're original wood?

They're original maple.

Yeah, backyard, decent size.

Yeah, it's a reasonable size, I think. Start here, we'll work our way down.

Okay.

So my wife decided she wanted to rip out the flooring and put a new floor in.

Okay. Bedroom.

2-bedroom at the end, storage on the right.

This is probably going to take more than a month or 2 to get out all this stuff out for you if you guys just did it alone, you know? Okay, so this is a furnace, but it also has no AC.

Cooler or, uh, water cooler is new.

We get kind of an idea of this thing. We just have to like get it completely like cleaned out completely and just redo it all. Yeah, well, I'm going to talk to Michael about what I can offer.

I got to run my numbers, but yeah, he's wanting a lot more than I mean, but he was asking for more than what, unfortunately, the house is worth at the moment.

So I'll reach out.

It's nice meeting you, brother.

You too. Best of luck, all right? Have a good day, you guys. Yeah, you too.

That is a perfect example of why you would want to go see a house in person. The seller told me that the house just needed carpet, paint. We go inside, the house is absolutely trash. It needs a complete remodel. Mold, water falling down, leaking. You got the swamp cooler that's destroying the house, you know, flooring. It's just completely destroyed. So you can never really take a seller's word for the condition of the house unless you can get pictures or go see the house yourself. Now when I go talk to the seller, I have— I don't want to say ammo to like kind of attack them, but it's more of like I have more information to say, hey, look, have you seen this house? I can show you the pictures. I can send you the video that I took. This house needs a complete rehab.

These are the options that I see available to us right now. Okay, so I'm about to call Michael. I just went to see his house. Terrible, terrible condition. I just sent him a text message of the photos from the property to show him that, you know, I saw it.

It's a lot worse.

We're gonna have this discussion. He just wants an offer. I'm not just wanting to make a quick offer and get off the phone. I'm trying to figure out how we can structure a deal. I'll probably offer $307,000, you know, Looking at $307,000, I might have to go lower than that. So $304,000 gets us a 10% return on this property. If it takes us 6 months to rehab it, man, this house is bad. Okay, I'm gonna call him, and this is the kind of guy that's gonna try and just get your offer out of you immediately. I'm gonna try my best to not just make my offer immediately. Let's see how I do. I can talk a big game, but this guy, this guy's a freaking bull.

Hey Nathan.

Michael, how are you?

Good, thanks.

How are you doing?

You know, it's a good day. It was quite the property you got there once I got down there and saw it. I'm pretty hesitant to make my cash offer just because I know it's a lot, probably a lot lower than what we initially discussed just without me seeing it. But it seems like you want a cash offer. Yeah, I'm trying to do a 1031 exchange.

So, okay.

So like doing a sell, like if I were to buy it on terms and you finance me on the flip where I could pay a little bit more money, are you saying that maybe not, that wouldn't be as intriguing to you.

It depends on the numbers.

I mean, okay, it all depends on what you're getting out of it. Are you open potentially to partnering up with me on this flip where you bring in some of the money and I get the rehab going and we flip it together? Would that be something you're interested in or not necessarily?

What I mean, if I was going to do that, why would I need you? I'm not going to pay someone a lot of money with no risk to call a few people to come in and put new flooring in.

Of course, yeah. And I understand that it wouldn't necessarily be like, hey, you do, you pay for everything, and, you know, there's no risk on my end. I'm just, you know, I'm exploring options because after running—

If you want to put up the money for the rehab, I'm open to that, but I'm not putting up— if I'm going to do the rehab and put up all the money, I'll just do it myself.

Right. No, no, that totally makes sense.

If you want to put up the money, that's fine.

Yeah, you know, because again, I want to— I'm exploring options on this one because, yeah, I think if I were just to come at you with a cash offer, it would— I, I wouldn't want to offend you. And this one, after looking—

just tell me what the cash offer is. You're not going to offend me. Okay, so for cost of $300,000, $304,000, that's what you're saying?

That's what I'm thinking after running the numbers. You got $480,000 is the after-repair value of what I think I can sell this for if I fix up the landscaping, do a complete rehab on the house. I have my hard money costs, and I think it would take 6 months in total to rehab and list. And since I'm, you know, I have connections with agents, I don't pay to list my properties. I just have to pay for a buyer's agent. So I got closing costs, $85,000 rehab. After everything's said and done, I'd make about $47K. You know, $304,000, is that something you're open to, or is that completely like not something you're not interested in?

No, it's not even close.

Okay, then we kind of explore the different options of like the terms, you know, where I basically go in there and I can make you payments, fix up the property, and it would be cheaper than me getting hard money, right? And then I list it and sell it when it's ready. That's a potential option, or we partner on it and we figure out, you know, how much money I bring to it, if we split it, or if I do the whole thing, uh, how much you would walk away with, and would we split the profit above what we give you. You know, those are the options that I can see at the moment.

I mean, the best option, I mean, I would consider some sort of seller financing potentially. You know, initial number's $304,000. I mean, I've got offers at $410,000 cash.

Yeah.

So I mean, for me to carry it for a year, I'd have to be at least $450,000 to make it— to make sense.

Which I understand completely. Well, if you got $410,000, I would love to just be, I guess, be be available in chat, I would have to come up obviously off of 304. But other than the cash offer, I know you're probably just going to explore what, what those other guys offered because they're much higher. But if we were to flip it together and I brought the rehab, if I brought the money, how would that look like to you? Like, would you be able to continue to make the mortgage payments and I just do the rehab and we kind of—

we could do something like that.

Okay.

Run your numbers on this and then get back to me and we'll go from there.

Sounds good. Is there any other scenarios or anything else you want to run by me so I can, you know, people there?

I mean, the cash offer doesn't make sense because I've got better offers on the table already. But as far as the, maybe the rehab, that might make sense.

Okay.

And last thing before I let you go, if we were, if I come back and it makes sense to do the rehab, would you prefer doing that over a cash offer at $410,000 if we were able to rehab it together? Or would you rather go with the cash?

I mean, that would be, I mean, Again, it depends on the numbers. What's the potential, you know, additional gain as opposed to— I mean, if I could make an extra $2,000, no. You know, I could make an extra $20,000.

Yeah.

Then it's something to look at. Does that make sense?

100%. Yeah. You're a businessman. What makes sense?

I love it.

Okay.

Okay.

Yeah.

Run your numbers, be in touch, and we'll go from there.

I appreciate your time. Thank you.

No, I appreciate yours. Thank you.

Bye.

That went decent. So Pretty much what we have here is the cash offer doesn't work, novation doesn't work, but he is potentially open to partnering.

We'll see.

I gotta run my numbers, see how it goes.