Question for CBR, Rina, Elena, Carole and seasoned investors

I have emailed my responses to all who emailed me with these questions. I wanted to see others responses to these questions that are asked all the time by new investors. Anyone...Rina, Carol, Matt, Elena, Joe..........???

I rarely take on a property that I cannot fully control. Most if not all of my homes are vacant which makes it easier to have full control of the property. However if I had to respond to the following....

1. When you contract a house how do you convince the owner to give you a key so you can show the house to potential investors to assign to?
(personally I always get a key.

My response - (Assuming the house is vacant) I am very honest about my intentions up front. My sellers know that I intend to wholesale (assign)the property within the time that I have the property under contract. I explain to them that I must have 24 hour access to the property to show it to my partner buyers if the deal is ever going to go through. I have never had a problem getting a key.

2. How do you keep the owner of the house from always being there when you show the house to a potential investor? In other words...you don't want them following you around while you are doing your negotiations with a potential buyer.

My Response - It is not always possible to have the seller out of the property for you to show. Therefore, I always take a partner with me. This way the partner can keep the seller occupied while you show the property to your buyer.

3. When negotiating with a seller who is pretty motivated...but has every reason why you should give a little more for their property...how do you convince them to come on down a few thousand dollars more to make it more feasible to assign more QUICKLY to a investor? In other words the homeowner is almost to a reasonable price but needs to come on down a little more to make the deal possible.

My response - I am honest about my intention and that I am doing this to make money. If I cannot make money I can not do the deal. It is all about staying in control and being willing to walk away if the seller is not willing to go down to where you need them to be. If they are not at a price where you can make money then you must walk away from the deal. Your time is valuable, If they are truly motivated they will call you in a few days willing to accept your offer! I have had sellers call me months down the line. If a seller is not motivated you are wasting your time negotiating. Sometimes you have to let them cook a bit until they are ready.

4. When showing as assignment property to one of your investors...and you are at rock bottom price...they are telling you all the things that are wrong and how much it will take them to fix it up and why they need much more of a discount...what do you say.
For instance if you have a house with an ARV for $42,000 and you have it for $10,000...repairs would be about $8000. That is a good deal and the investor wants even better deal. What do you do?

My response - Investors are cheap!! Bottom line. They know that you have wiggle room in your assignment fee and they want to wiggle out your profit and put it into theirs. Again it is all about staying in control of the deal. If I have a property that I am making say $10,000 on I will negotiate a little to make the investor think he is winning the bid. I have a set assignment fee that I rarely go below of $7,000 (remember I have to split my profits with a partner) So I will play his game until he hits my $7,000 bottom then it stops. If the property is really a deal someone will buy it even if he walks away. True deals sell!

I hope this helps. All deals have to start with a motivated seller! If your seller is not motivated than all of the negotiating in the world will not work.

Thanks for your response Carol. Your answers are pretty much like I answered.
I have always contracted vacant houses so my answers were based on vacant FSBO's.
Anyone else want to jump in here and contribute? These are questions I get from new people on the board all the time so I started this so you will be able to see how the experienced investors handle these situations.

Without getting into a whole new book, I agree with you and Carol, with one exception. We would try to keep the seller away from the house when showing it to a potential buyer. Reason being, just last week when Jeremy was talking to a seller about a house we wanted to do a lease/option with it all starting going down hill when the seller sensed what we were trying to do and shut us down right away.
We are always honest, sometimes too honest when dealing with sellers. But this one bit us.
Anyway, other than this last time out of the box, we would follow all the steps that you and Carol would normally take. I hope this helps...Jan

That must have been a very embarassing moment.

Thank you for all you do for the DG Family, Sissy. You are awesome!
Carol and Jan had great advice/answers. (Thanks you guys!)
Can I come back later to give my input (if there's anything I can add..)? Been gone most of the week and spent all morning on some other threads (still have a bunch of PMs too), but wanted you to know I'm here.

Thanks again, Sissy!

Rina

Thank you for sharing that post with all of us.

Those were great questions and responses.

Kelly06

Thanks for you answers and I look forward to hearing Rina's too. Each investor has her or his own way of handling these situations. The simplest of things can make a big difference in selling or not selling the property.

Glad you enjoyed this post Kelly. I hope you are doing well with your real estate dealings.

First, I agree with Carol that you NEED to be talking to a motivated seller to have things go smoothly. If someone is "attached" to the property, or not really needing to sell, chances are they will be offended easily and/or be more likely to be wishy-washy on their resolve to work with you.

1. Q: When you contract a house how do you convince the owner to give you a key so you can show the house to potential investors to assign to?
(personally I always get a key)
A: Now obviously if a person is still LIVING in their house they will not want you walking in at any time. LOL. So I'm also assuming it is vacant. Not only do I ask for a key, I put in the contract "Buyer has the right to show property to potential occupants" (this can mean tenants or buyers). I have never had a problem with a FSBO. With REOs I request permission from the bank to have access for keeping an eye on things so pipes don't freeze, etc. When you put it this way, they are MORE than happy to let you keep their asset under watch until you close. I then get the lockbox combo from the agent.

2. Q: How do you keep the owner of the house from always being there when you show the house to a potential investor? In other words...you don't want them following you around while you are doing your negotiations with a potential buyer.
A: I've never had this happen, but if the owner insists on being there (my agent says renters are even more likely to want to hang around to watch their "stuff" than owners are) first of all, don't do any negotiating in front of them. Wait til you're done "touring" and then discuss outside if you have to. Always make sure the owner feels respected and that his house is respected too, even if your offer does not reflect this. People respond well to a smile and a few compliments. (don't we all?)

3. Q: When negotiating with a seller who is pretty motivated...but has every reason why you should give a little more for their property...how do you convince them to come on down a few thousand dollars more to make it more feasible to assign more QUICKLY to a investor? In other words the homeowner is almost to a reasonable price but needs to come on down a little more to make the deal possible.
A: If they are really not willing (or able) to come down in price or negotiate with some other incentive, I would say don't try to "convince". If you know what your top dollar is, then just say "I'm so sorry. I really can't go above $***". If you need more than that, I understand. I wish you the best. Here is my card just in case things don't work out. It was so nice to meet you and thank you again for your time."
Believe me, if the time comes, you will be the one they call.

4. Q: When showing as assignment property to one of your investors...and you are at rock bottom price...they are telling you all the things that are wrong and how much it will take them to fix it up and why they need much more of a discount...what do you say.
For instance if you have a house with an ARV for $42,000 and you have it for $10,000...repairs would be about $8000. That is a good deal and the investor wants even better deal. What do you do?
A: Maybe try shooting an email to your whole buyers list at a price higher than what you intend to assign for, and see who gives the best response. I think I would try to avoid getting so close to my bottom dollar that it's uncomfortable. After all, you deserve to be rewarded for the great deals you are finding. If one doesn't appreciate that, I'll bet there are those who will. Be confident in your find, and it will have a great effect on the person you are doing the favor for.

OK, that's off the top of my head. Thanks Sissy, for putting the questions out there. It was fun answering (just my opinions of course. )

God bless!

Rina