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MY FIRST YES...I NEED TO CALCULATE

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Hello guys,i said i wouldn't start over this time and i kept on until i got what i wanted.Here's my situation,seller is very nice and motivated.She used to be a Realtor.Her only concern,she wants to make sure whatever numbers i used,property will be appraised for that.Property worth 102k,she wants 99k ,average rent $1400,i was thinking $1300 with $300 credit.If i were to ask tenant buyer for a 3k fee as example,would i need to offer seller 96k or what other ways can i do this deal without touching her offer price.She's very motivated,she has been trying to sell for 6 months.She's waiting for my contract offer.Can you guys help me.Thank you

By the way MC,the two email approach got me that.

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That's the way to stick with it, Junior! Let's see what we can do to close this. . .

First, you say the property is worth $102K and she wants $99K. How did you arrive at the $102K value?

Is that her current asking price and is the property listed? If yes, then she isn't going to net her asking price and so we have to work with real world numbers.

Also, the property has been on the market for six months. Why hasn't it sold? This usually means the market is rejecting her price.

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How did i come up with the price,she actually sent me the info since she still have access to the realtors site.Plus i checked different sites and what have sold in comparisons.Those are real world numbers.It was listed,she took it off,now back for the past 2 months.

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OK. So if she wants $99K, then you would need to market the property for that price plus what you anticipate to receive and keep as option money and any rent credits you are offering.

For example, $99K plus $3K option money, plus $7,800 in rent credits, ($1300/mo rent and a 50% rent credit). The question you must ask yourself: will the market accept a price of approx $110K? If not, then she has to be willing to accept less. I suspect she will after six months of not selling. Also, with the property being listed, she would have to pay any selling Agent the standard 3% of the purchase price. So in all likelihood she won't net $99K and she knows it.

Make your offer based on numbers that allow you to find a t/b and move this property in a reasonable amount of time, not on what any homeowner tells you they want or need.

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It would need to appraise for the option price, $110K in this example. If it didn't there are still ways to complete the deal: the seller could carry a second mortgage to make up the difference, or they can adjust the price so it is in line with the appraisal.

If she is concerned about this, and it's good she is, then she should be gently nudged to accept a lower net price.

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The question you must ask yourself: will the market accept a price of approx $110K?

 

If you believe the market value is $102K or even basing it off the sellers $99K, wouldn't the $110k be within a reasonable range? Is it accurate to say that since we are usually dealing with T/Bs that are credit challenged, it would be acceptable to have our asking price up to approx. 10% higher than market value?

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It certainly doesn't appear to be an unreasonable price based on your assessment. Ultimately, the market will let you know if you're correct or not.

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GRRR!! This has been 3 bad weeks, had 3 potential deals fell through, the seller were ready to sign and one by one changed their mind or had other things come up.

 

and the only 1 property i have agreement is in such a bad condition the potential buyers went in and out in 5 minutes, put on their shoes and literally RAN away never to be heard from again. It's a small property too even if it gets sold I probably only get 3 or 4 thousand.

 

So Junior just so you know, for every 15 to 20 yes, I actually get a deal signed. Keep pushing!

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Daniel, how much time is lapsing between the homeowner giving you a verbal OK, until you try to get them to sign? Too much time to think and rethink and get the "expert" option from some distant in-law will often cause the owner to become confused and change their mind. Verbal approval to signature needs to be ASAP.

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If I think they understand everything then I try to book an appointment right away.

I am still testing out what is the best way to bring up the agreement. I don't want to go all the way there and only to have them say "I need to look over this agreement". That happened a few times already, and that almost always means no deal. I sometimes send a PDF version of the agreement with detailed explanation written on to seller first before I go visit them. Especially if it takes a while to travel to the property. If they are close by then I don't send them the sample copy.

 

A couple times the seller was really eager for me to go there and start doing this "rent to own" thing, I really thought it's a deal. However I told them it's 1 and half hour drive, why don't they read over the agreement first and then if they agree to everything then I go see it. After I sent the copy, they start to have new objections, and then the deal fell through. Usually it's about wanting a down payment.

 

I am going to test this out a few more times, but I think by doing it this way it saves me time, it brings out what the potential deal killer would be. I am also contemplating avoiding this objection by bringing it up first, like give them 1 month worth of option fee.

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I am also contemplating avoiding this objection by bringing it up first, like give them 1 month worth of option fee.

Sometimes you have to share the option money to save the deal. I don't like it, but I figure 75% of something is better than 100% of nothing.

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