Motivated Sellers And Deals That Don't Work For You
So a motivated seller has found you and you're their last and only hope but the deal is something you don't want to get involved with for what ever reason. How do some of you more experienced investers break the news to the seller? Do you try to help them out in other ways? I guess one way would be helping them out with a forebearance agreement but that seems to only be a "temporary fix for something that needs a major repair". Especially when the root of problem lies in their inability to keep there mortgage payments current.
I never drop a prospect. I either solve the problem or cause them to solve it themselves.
Mostly the problems are caused by the person. Failure to look ahead and see the ax which is about to fall. Overextending (really big in LaLa land). I sit down and work with them. I ask the Quo Vadis question and stay with it until I get an answer. I use every Psy trick in the deck to make them look at their life and past and estimated future. If the guy is selling shoes and that is the end of his trail. I remove him from what he cannot afford and get him into what he can afford. Sometimes from a 4 br 4 ba with guest house and three garages, into a simple one bedroom condo. With a view of a brick wall. I may as part consideration cover his rent for six months and feed him a small amount of funds to live love and buy gas. I do not drop him on the sale of the real estate. I check him every week or so. Strange as it is sometimes this break in situation snaps a spring somewhere and he progresses up to his own shoe department in a major department store. Now that one I did not expect. Doubled his income and I had to restrain and retrain him not to high fly again.
It never stops. But you must remember from all of these temporary mental cripples comes an awful lot of referals.
Cheers Lucius
Quote:
On 2004-07-04 01:00, Lufos wrote:
Mostly the problems are caused by the person. Failure to look ahead and see the ax which is about to fall. Overextending (really big in LaLa land).
Thanks for the reply Lufos, I definetly see your angle. AND, I had to take note of your above quote. I'm orginally from LA (born and raised) so I've seen many of folks "overextending" themselves and getting into some tight corners. But hey, when you're "Gold" and trying to live "Double Platinum" what can you expect??
AR:
Lufos' largesse notwithstanding, I've been in the situation you are positing here. What I've had to be careful about is a) thinking I can help everyone and b) getting personally involved in fixing their lives.
I'm a newbie investor, trying to stay focused on the sub 2 method while learning more tools to help people out. During these early days, when I've gotten a prospect I can't help personally, I've passed them on to either another investor whose strategy may help better (short sale, lease/option, etc.) or my mortgage broker (who may be able to help on the financial side). I will pass on any and all advice I can, including talking about the forebearance idea, but I'm already stretched too thin to work this out for them without some kind of deal being behind it.
Many people have told me: treat this as a business; don't get emotionally involved, with either a house or a prospect.
Now, I realize from many months on this site that Lufos has a MUCH different outlook on this: he's making profits in war zones, looking after those tenants, trying to get them some sense of ownership and pride of neighborhood, etc. For which he is to be commended, lifting up his fellow man. If I'm lucky enough to reach his age, I hope I can be as much a mensch...
Andy