Creative Challenge

[Doug Pretorius (ON) 9]

Adam, my challenge was to do a "creative" deal with a seller (CA, SLO, sub2, etc.) Because conventional deals have already been done by myself and the "contact" we keep referring to.

 

If the challenge is to be converted to simply doing "A" deal, then it's no longer a challenge about whether a deal can be done, but whether I can overcome what's stopping me from achieving my goals.

 

So that we're clear moving forward... is that what this challenge is about now?

[Adam King (MI) 1]

Doug,

I don't need motivated sellers since I will be giving them full price in cash. But I do need to hook them so that they call me first.

 

These were the words from the initial post that put us on this challenge, but the challenge "was" about getting creative deals like a CA, SLO etc and was brought out towards the end of that thread. So, to put us back on track we should focus on CAs, SLO etc, but that does not change my plan. If this challenge is about "you" not getting a deal (which it clearly is), then I am only here to help you overcome that. So, without this challenge getting out of hand, you're just going to have to listen to me and let me do my job so I can make it happen. If I negotiate one all the way to the closing table and it still doesn't happen, then we'll know what to work on next.

This challenge was something that I never should have done, but under the personal circumstances I will continue to not regret it as long as it helps educate us and moves you closer to your long overdue goals.

Regards,

Adam

PS I WILL call you tomorrow so we can take the next step.

[<Steve> 82]

Where's Pinkerton?

 

I think we need a mediator.

 

<S>

[Adam King (MI) 1]

Steve,

LOl, I here ya there.

But I'm done with the "thinking" part of this deal. I think that we have clearly over complicated things just responding to each other's posts. We are very quickly losing the right communication on this and that's not cool.

We'll just have to see where the cards fall from here. I'll keep posting on the results from here on out.

Regards,

Adam

[Adam King (MI) 1]

Hey all,

Just got off the phone with a seller that called one of Doug's signs. She's open to terms. They have to get some things straightened out by the 15th, but said they were definitely open to terms to attract "my" investors. Did another three way call so Doug was on the line and could hear the address and she commented that I was the only she was dealing with. Good, that means you don't need to call anyone else then.

Of course, this one is not signed, sealed or delivered, but it's a start. I'm having nice talk with Doug as I write this.

Thought I'd share,

Adam

[Adam King (MI) 1]

Update,

Doug is going to look at his first (For this challenge) creative deal. Hope things are going well, we should have an update soon.

Regards,

Adam

[Gary (MO) 0]

Yo Doug! I've held my breath about as long as I can ole boy....how'd it go?

[Doug Pretorius (ON) 9]

Gary, there are 3 lawyers involved and the bank takes possession on Friday. So Adam or I will post all the details as soon as things firm up.

[Gary (MO) 0]

Good to talk to you again Doug! Thanks!

Gary

[Doug Pretorius (ON) 9]

For those who weren't on the conference call last night, and for those who were and would like some more detail... here's the story of how Adam proved beyond a shadow of a doubt that he is one of the greatest listeners on the face of the planet Oh yeah, and he also proved that by getting the seller to do the talking, you can create great deals for yourself.

 

First of all, about my market. While falling far short of the appreciation rates of certain areas of the US, my market is the 3rd fastest rising in Canada at over 10% per year for the last 5 years. It's in this market that I had convinced myself there were no deals to be found and that the only way to get any houses was to buy conventionally at market.

 

The following deal shows just how wrong I was and how everything you've ever read about 'find the deal, and the money will find you' is true. As is what Michael has told us all along that even in the strongest markets not all the sellers are as strong.

 

 

It all began on a humid July day (yes it gets hot AND humid in Canada believe it or not ) when I stapled and/or taped exactly 18 "I Buy Houses" flyers to telephone poles around the city. For a few days the calls poured into my voicemail but no one left messages. The calls quickly slowed to a trickle and eventually stopped altogether (or so I thought). A full 3 weeks after putting the signs up and knowing full well very few of them remained, I received my first (and still only) voicemail message:

 

"Hi, I saw that you buy houses, could you give me a call, please?"

 

I handed the name and number over to Adam, who (thanks to this challenge and our long friendship) was willing to work his magic. In surprisingly (to me) short order he managed to get this timid and wary seller to the point of practically begging us to buy the house at whatever price and terms worked for us. Yes, they were the fabled "motivated seller", and the reason behind that motivation became clearer and clearer to Adam and I over the past 2 weeks (ending Friday Aug. 20).

 

1st There was the looming power of sale (a fast type of foreclosure) which was set for last Friday (Aug. 13), that Adam and the seller got pushed back to Aug. 20.

2nd Was the fact that the house was a mess. Though structurally sound, it had to be ripped down to the studs top to bottom and practically rebuilt.

3rd This was a divorce home that had been sitting in limbo for 15 years! It probably would have continued like that had it not been for a fire (fairly minor damage) which led to the foreclosure.

 

* Monday we had a verbally accepted offer of $40,000--roughly 25% of its ~$160k repaired FMV.

* The same day we had 2 offers of $48k and $50k cash, as-is.

* The same day we had another interested party who was willing to lend all of the repair funds.

* On Wednesday we had a 3rd rehabber interested in it as well.

*** All of this with NO marketing whatsoever. All I did was mention the property to these people and they immediately wanted in.

 

So, as Adam mentioned on the conference call, we were gearing up for our new bragging rights to this deal of $8k+ in 3 hours flat ... but wait, what's that? The ex-wife has to sign the offer you say?

 

...and thus the deal that almost was came crashing down like a house of cards!

 

As it turns out the ex (who had been living in the house all those years) had a realtor do an estimate WITHOUT LOOKING INSIDE. The number tossed around was $93,000, as-is. And so the ex refused to sign, choosing instead to believe the lie, and hope that she will get something back from the bank.

 

 

I believe that if Adam had been able to get the ex-wife on the phone, this deal may have gone though. But we'll never know because the bank took possession Aug. 20, and that's the end of the story. The bank will now accept nothing less than full market value for the house unless it sits on the market for a year.

 

So as far as I'm concerned, Adam won the challenge, even though the deal didn't go through. He proved that by gaining leverage over the seller by remembering that THEY ware the ones who are selling something, not you. You can get them to accept a price or terms that work for you and other investors--even in a seller's market!

[Gary (MO) 0]

Doug, how hard did you guys work on this? Was it an "all out, full time, Katy-bar-the-door" project or was it more of a laid-back, laxidazical, "get around to it when we get time" experience?: The original challenge was issued, I believe, on July 14th; 5 weeks and no deal (or a partial deal)? Is that it? Is the challenge "over"?

 

Adam may have proven that it can be done in your market (which I believe you were originally saying it was impossible -right?) But is it practical to do at that rate of success? I mean - how much harder would you have to work to complete two deals a month? Is that even possible?

 

What is your plan Doug from this point forward? What did you learn? (besides the fact that Adam is a good listener and that there was one motivated seller in your market?)

 

Hey guys - from my seat it looks like Doug won this challenge... unless, Doug, Adam truly did show you what's possible up there and you now have a new-found game plan and motivation to succeede with new contacts and new determination. If that's the case then I'd say this challenge was a huge success for ALL of us!

[Doug Pretorius (ON) 9]

Gary, right, I thought it was impossible to find any seller that would give me a good price or terms. This seller was willing to do both after Adam talked to him. Unfortunately that's the only call on my signs that Adam talked to, so it's impossible to say what kind of average could be achieved over the long-term.

 

We didn't keep track of the time spent, but I don't think Adam spent more than 2-3 hours talking to sellers (including cold calls) over that 5 week period...and I spent a few more hours putting up signs and going to look at this property. So if we put in 10 hours a day instead of 2 hours a week, who know's what might be possible? But of course Adam's not going to put in that kind of time, he has his own business to run!

 

Well, to be honest...no, I don't have a new plan, I do have one new rehabber contact, and no I don't have any renewed determination.

 

As it stands I think I have two choices: 1) I can put out a ton more signs and see if other motivated sellers call, and hope Adam is around to negotiate with them. OR 2) I can learn how to gain the leverage over investors that I've been missing, and put together investment partnerships like I've been trying to do all along, so that I don't need motivated sellers.

 

So maybe you're right Gary... did I win the challenge because a deal hasn't been completed? Or did Adam win the challenge because the first and only seller he talked to WHO CALLED US, was willing to deal?

 

In the end I don't think it matters as much as we hoped it would and this whole challenge is kind of screwed up. Because, as I realized a few weeks ago, even if Adam negotiates the most unbelievable deal ever done in any market...that doesn't mean I will be able to duplicate his success. In that case all this challenge would have proven is that someone who's already successful at negotiating with seller's can negotiate a deal in a seller's market too.