This is a story about one man, one woman, two weeks and a twenty-three thousand dollar profit.
When I first started investing I took real estate classes, read books and manuals, and listened to cassettes (yes cassettes…what are those?!) constantly.
I wanted to learn as much as I could and I wanted to make as much money as I could. I knew the more I learned, the more I earned.
I started buying multi-family properties. Then I began flipping single-family properties so that I could buy more multi’s.
It was during one such flip that I encountered a very strange experience.
I got a call from a woman who had seen one of my “We Buy Houses” bandit signs on a telephone pole.
I got out my seller’s script and started asking her questions about the property and her situation.
She had a three-bedroom ranch in Brockton that needed a little bit of work. She was looking to sell and move to another area.
I asked her if she was behind on any payments (I wanted to know how motivated a seller she might be). She said that she was not behind. She just felt it was time to move.
After several other questions, I knew she wanted to move, but I still didn’t know how motivated she was. She was actually playing her hand very close to her chest, as a good negotiator should.
It was time to ask her the price question, that question that makes our stomach get all queasy so we avoid to the very last minute. It is the question, we need to know the answer to so we know we are not wasting our time.
The question I ask is one of the best questions I had learned for getting the seller to name the asking price for their property. I consider this question to be worth the entire $3,000 I had paid to attend that seminar long ago because I have been using it for the last 18 years. And, I’ve gotten into a LOT of deals because of it.
So, I fired away, “If I was to offer you all cash and close quickly, what is the least amount you could accept for the property?”
This question’s answer usually tells you if you are close to a deal or if you should even bother to go out and see the property.
In my head, knowing the area and knowing what properties were going for, I had an idea what I would need to get the property for in order for it to be worth my time.
So I asked the question and she paused. Then she paused a little more. Then she said, “$100,000.”
$100,000 was not a steal, and might not even be a deal but it was close, so I knew I was going to check out the property. It was worth checking out because I had discovered that a person will usually go lower with their price once a potential buyer gets to the property… because as the buyer, you simply ask the same question again.
But there was also another question that needed to be asked before I hung up the phone, and that was, “Is that the best you can do?” About 65% of the people will actually respond with a lower price when you ask this question… so this question should always be asked!
And, she was not an exception. After a brief pause, she said, “$95,000.”
She dropped the price another $5,000 so now it was looking more and more like a deal. If it needed only minor repairs, I knew I could at least get my minimum profit of $20k from the property.
I set up a time to go see it that afternoon, before someone else came and stole the deal from me.
When I got to the house, I started my Safe Island Technique (see one of my previous essays for information about this), and as we start to walk around the house she begins to tell me about a problem in the bathroom. Immediately, I start to think, “Oh here we go. This is where the small problem becomes a big problem.”
Well, it really was only a small problem and the property didn’t need that much work. So I asked her again, “If I was to offer you all cash and close quickly, what is the least amount you could accept for the property?”
She dropped down to $85,000 but wanted to close in two weeks. Now I’m thinking, this is a deal! But… why two weeks?
As we started the paperwork, I asked her if anyone else was interested in the property. She replied that she had two previous buyers. Uh oh… now I’m thinking here is the real smoking gun. So I asked why neither of those buyers closed on the property.
At that point, the woman looked me in the eye and leaned forward, and said, “It’s my son.”
I responded, “What’s up with your son?”
She told me that he lived in the basement and didn’t want to move. Whenever an inspector tried to come in to inspect the property, he would not let him in. This is what kept her from selling her house.
I’m thinking, “Oh this is great. Either this is a story and there is something really wrong with the house (and I’m definitely getting it inspected), or she really has a crazy son.”
So I said to her, “Well, where is your son now?”
Again, she looked me square in the eye and leaned forward and very sternly said, “He got hit by a car last night and he’s going to be in the hospital for two weeks…I NEED TO SELL!”
At this point I realized I had a very motivated seller! So, I had my team step it up and do all the due diligence on the property to insure I was protected. And when it came out clean, I closed in eight days. She moved all of her stuff out and she was GONE!
I flipped the house for $23,000 to another investor who I signed up right after I signed the deal. The following week as I passed by this property, I saw all kind of “No Trespassing” signs up, all over the place.
I thought to myself, “Jr., must have gotten out of the hospital!”
Dedicated to Your Fast Path to Success,
David Lindahl, Founder
Creative Success Alliance
