Advice On Creative Way To Make Money On This
Any advice would be appreciated. I have had a property offered to me by a person who I used to work with. He is now unemployed and wants to get rid of the property to free up come cash. It is a single family residence, which he says needs no work (has new garage door, but he couldn't tell me age of windows or roof). Anyway, it is worth about 120k and he will sell for 105k cash. Won't do any type of creative deal...I already asked. The house is not on the market and I am the only investor he has talked to about this (because we used to work together).
I don't want to buy it, margin is too thin. Any ideas on how I might make money on this one? Perhaps get an option with him and flip it to an investor? Or is the margin too thin and should I just walk?
Please offer advice
John
Hello John,
If you don't want to buy the property, don't buy it. If the RE market in your area is similar to the RE market in my part of OH, I would advise you to just wait. The reason why your co-worker isn't willing to do anything creative is because he's not really motivated to sell. Yet.
You'd be surprised how flexible sellers can become when their property has just been sitting and draining their finances. I waited out a seller for about six months and it is now about to pay off in both price and terms.
Be patient. If the seller remains unemployed for a while longer, you just may end up with a deal that makes sense to you.
Amelia
Hey,
Waiting is the best (if not only) answer.
But just to look at the numbers...this guy isn't really discounting the house very much.
If he sold it retail, he would normally pay 6% RE commission and upto 3% of closing costs (that is the norm in my area for houses in this price range). So...
Asking $120k
Comm. $7k
Closing $3k
Holding $1.5k (for the two months it takes to close)
Net to Seller $108.5
So he is reaching in to his pocket for a total of $3.5k and not the $15k. Maybe you could mention this to him.
I agree with waiting but I would start putting a lower number in his mind so when he gets motivated you'll lock in a good deal.
offer the price that makes sense to you not what makes sense to him. if he is not willing to sell in your range just walk. there are to many good deals to be made to make one that does not make sense. you said it "i don't want to buy it, margin is too thin" then don't. ggod luck.......kenmax
....but follow-up with him! Don't just drop it, because as was said before, he's just not motivated yet. Don't waste your precious precious. Make him YOUR offer and then if he declines (which it soundslike he might at this time), keep checking in with him every couple of weeks or so. You want to keep yourself uppermost in his mind when he really starts to feel the crunch and decides he wants out NOW.
Never waste your precious precious time with unmotivated sellers. Remember to look for motivated sellers before deals (without a motivated seller, there will BE no deal).
The other responses are correct, and so are you. For this to be a good cash deal, he must lower the price. Wait it out, in a month or two, he will be more motivated. Keep in touch with him, and go over his many options. Let him know that you will be there when he needs you, which he will. Until next time...............