The Initial Phone Call...
Hello everyone,
Been reading the posts and getting one heckuvan education. Many thanks from the bottom of a newbie's heart.
Have a quick question: I'm sending out letters to out-of-state owners of fixers in my area, asking if they're interested in selling. So far no phone calls, but when they do start coming in, I don't want to start negotiating over the phone before I've even had a chance to see the house.
However, I don't want to waste time going out there if the owner wants or expects to sell at full retail value.
So how can I steer the conversation so that the owner knows I would be buying at less than market for his/her fixer?
(If this topic was addressed before, please bear with me--I did not see it).
Thanks in advance,
jimmyu
what did your letter state? did it indicate buying below market? if so thats a start. when they call simply state "i am a wholesale buyer and if you are interested in selling at wholesale i would like to meet with you ect...".....kenmax
personally, I believe that the simple act of introducing yourself as an investor will accomplish what you're trying to say. If they are out of town, and the property is vacant, I can almost guarantee that you'll have plenty to educate them about with regards to the condition of their property. (These things just get worse the longer they're vacant).
Your initial goal is to get them interested in selling. Your letter can do that simply by reminding them that this unrented house that costs them money every year in property taxes etc. is still out there, and nothing has been done to remedy the situation. Once you have stirred up the interest, then you need to educate them why you can't pay what they think the property is worth. This may involve sending pictures that accent the worst of every negative situation, and an estimate of repairs that factors any possible unknown cost that is sure to come up.
Since the owners are out-of-state, it is worth your while to go look at the property especially if vacant before you send them the letter. That way you'll have the amunition you need to talk to them intelligently about their property. Establish yourself as the local expert. The authority. Remember, they are the outsiders now, and not involved with the property on a daily basis.
Hey,
First and foremost...do not, do not, do not use a script. Do not ask questions like a police interrogator or rattle them off like a robot. I only mention this because so many people ask for a script when talking to a seller. And that is the last thing you need. You need to have a conversation with them. You become a person to them and not just a guy who is trying to buy (and maybe from their eyes, steal) their house.
Second, and someone else mentioned this already, you need to know the area like the back of your hand. If the seller says "I own a house on 101 Anywhere St.", you need to immediately know those are 3/2 or 3/2.5, in an ok area and run around $130k.
With that said, you need to find out some basic things: how much, how fast, condition of house, etc.
Because of you focus (out of state), you have some things working in your advantage. The owners are generally going to fall in to one of three groups: investors, business transfers, and inheritance. This means the emotional attachment is much, much less than people who are living there (the only exception to this people selling the home they grew up in). Investors are the easiest; they know the score, so they are the most direct.
Here is a sample:
Me--"Hi, this is Bruce"
Seller--""Hi, this is Joe Seller. I have received three letters from you. What's the deal with you? "
me--"Basically I am RE investor in Anywhere USA. And I thought you might want to sell your house. Is that something you have thought about?"
Seller--"I guess. If the price was right."
Me--"How much where you thinking about?"
Seller--"Somewhere around $100k"
Me--"Joe, I am sorry to say this, but I send out so many letters, which street is your house located on?"
Seller--"104 Anywhere St."
Me--"Oh yeah...near the Fire Department."
Seller--"That's me."
Me--"Are you renting it out now?"
Seller--"Naw...I tried it but it was a pain"
Me--"Yeah being a landlord is hard work. Tenants are a pain. Having it sit empty is probably no fun either. "
Seller--"No its not. I really would like to get rid of it"
Me--"How long ago did you rent it out?
Seller--"I guess it was 5 months ago."
Me--"Did the tenants tear it up?"
Seller--"No they were okay. The house looks pretty good, except for the roof. But I guess you know that already."
Me--"I tell you what, let me take a look at the inside and we might be able to work out a deal....blah blah blah"
The convesation will NOT be this simple, but you get the idea.
Assuming you are going to do this for more then a few months...
Talk to any owner who takes the time to call you. Establish a relationship. As you have already noted you are not getting so many calls that you need to screen out some of the owners.
You can never tell when the owner's situation will change. You want any owner to call you first when they are ready to sell. It might be after receiving your letter or it might be a year or two later. An owner who is ready to sell retail now can become very motivated to just dump the place later.
John
[addsig]
Wow! Great stuff. I appreciate it.
Welcome to the forum. I see some great advice coming your way and hope it all helps... I am in your area (work in Walnut Creek) and would hope if I were you that they didnt realize just how HOT the market is out here. There is no such thing as a $130,000 house in these parts much less a $200,000 home, even a fixer. Be ready to pounce when a deal does come available. Have your finances in order to make it short and simple. The longer they have the more likely they will research and see what is going on in the market and start thinking it is worth more.....
Good Luck
Brian