Jump to content
The forums have been archived and are now read only. Years of great info saved for your reading pleasure. Thank you! Visit us on Facebook: https://www.facebook.com/NakedInvestor/ ×
The Naked Investor Forums
Bocky33

First Deal

Recommended Posts

I'm new at lease purchasingand have been too scared to pick up the phone. Did so today and found the following. A single mom with 1600 sqft SFR needs smaller place and has found a 2Bdr condo she wants to purchase when it becomes available next month and so, is running out of time. House has been on market since Aug. Asking $99,900 but says Realtor friend said she could ask $106,500. She has owned the home for 25 years - no second on home and new roof in '96.

 

I just need to get that 'first deal' under my belt and if COMPS bear out would offer $93500 (?) on a Lease Purchase with possibly $1000 option consideration; advertize to TB for 108k and $4000 option consideration and 200-300 rent credit. Help me somebody, is this reasonable?

This may sound stupid, but when I get ready to present my offer, what exactly do i say? TIA

Share this post


Link to post
Share on other sites

Hello, Bocky33, and welcome to The Naked Investor.

I agree that getting that first deal done, and cashing the ensuing check that inevitably follows, gives a great sense of accomplishment and relief. I'm sure I'm not the first one to tell you that first deal will be your most difficult. In my experience, those who fail do so by giving up before ever doing that first deal. Those who succeed in this business do so by getting that first deal done, learning from that experience, and using it as a foundation and springboard for additional deals and success.

As for this particular deal, let's take a look at it and get an offer into this woman's hands.

First, you need to do your homework. That is, what is the realistic value of this property, and what will it rent for monthly? Critically important to have an accurate assessment of this info. Once done, you will know what you can offer the homeowner.

If I understand you, the property is presently on the market at $99,900. Forget what her realtor supposedly said about it worth being more. I've never met a homeowner who has said otherwise. That's the nature of this business. It's been on the market since August so clearly it is not worth $106K, or even the present asking price. If it is, it would have sold already.

You say you will offer $93,500 but I think that is too much. Let's say she receives an offer of $95,000. Not unreasonable, and probably acceptable considering her predicament and the amount of time this property has been on the market. This offer nets the homeowner between $87,000 and $88,000 once you factor in the realtors commission and the closing costs.

I would offer the homeowner just that, $87K, net. Meaning there is no realtors fees involved and I'll pay all closing costs. Heck, maybe even $3000 to $4000 less. Why not? You're there today, ready to deal. She has nothing else happening, apparently. She can always counter your offer, and you can always increase yours. You can't lower your offer, of course, and if your first offer is ever accepted, don't congratulate yourself. You've just paid too much!

The other thing I would not do is offer any type of option consideration. Most every deal we do is with nothing down. If the question about a "deposit" comes up, (surprisingly, it often doesn't), I explain the benefits of my offer, (The Lease Purchase Advantage I'm always talking about), and can usually wrap up another nothing down deal.

So, your homework assignment ^_^ is to comp this property to determine its value for both purchase price and rental market, and then get an offer in the homeowner's hands ASAP.

Keep us posted, let us know how you did and if you need more help. That's what we're here for, Bocky33.

Share this post


Link to post
Share on other sites

×
×
  • Create New...