This is a really fun episode. Joe was on his way to negotiate a deal with a seller he’s worked with before and decided to pull out his recorder and give you a “before and after” behind the scenes look at the process. The seller had a duplex with one side rented to long term tenants that he wanted to sell. Joe had bought a similar property from him a few years ago and felt that this would be a good deal just like the last one. Listen in to find out exactly what happened as Joe talked with the seller, negotiated a deal, and walked away with $15K in his pocket.
In this scenario the seller is getting older, has these properties that he’s had for a very long time, and wants to get rid of them. He’s willing to bring $20K to the table as a buyer’s incentive for Joe and is happy to get a 4% return on his money. His cash will serve as the down payment on the loan, the bank will finance the rest, and Joe will put absolutely no money of his own into the purchase. With $15K of renovations, Joe will have a great income producing property for the long haul… and owns a property that he didn’t have to spend a dime of his own cash to purchase. It doesn’t get any better than that. Listen in to Joe’s comments to find out how he structured the deal and how it’s going to work.
That’s one of Joe’s rules when it comes to working out deals with sellers. The first time Joe met the man selling these properties he simply asked the man what he wanted to do, and the man told him with no hesitation. It was less than Joe was prepared to do so the deal worked out great both ways. You never know what you’re going to be offered. You never know what sort of arrangements a seller might be willing to make. And you won’t know until you ask. In this case, the seller offered to drop the price without Joe even having to ask. It pays to listen. It pays to ask… literally.
What happened with this property is a great example of why you want to wait on the seller to give you their desired scenario. Joe had already seen the property on a walk-through with the seller. During that walk-through Joe mentioned a few things that would need to be fixed, in a casual way. He didn’t say he’d need a lower price. He didn’t ask for one. He just mentioned things he saw. When it came to the negotiation the seller said, “I was thinking to sell this for $175K.” Joe said, “What are you thinking now?” The seller said, “I think I would be happy if I got $160K.” Joe got a lower price without even asking for it. The seller had convinced himself to lower the price. You can do the same thing if you learn to be calm and wait on the seller to explain what he wants. Great deals often come Joe’s way from doing exactly that.
The seller Joe worked with in the situation featured on this episode of The Flip King has been easy to work with. Joe’s been able to strike up a great rapport with him. That kind of concern, courtesy, and care for the seller’s situation opened the door to a long term relationship, even though the seller has no more properties to sell. How? The seller mentioned that he’d be willing to be a part of future deals as an investor. Did you get that? The seller brought up the idea without Joe having to broach the subject. It all came about because of the relationship that’s been built one deal at a time. Learn how you can build those kinds of relationships too, on this episode of The Flip King!
The Replacement Recipe Episode - http://theflipking.com/the-replacement-recipe-the-flip-king-episode-4/
The Episode on Building Rapport - http://theflipking.com/rapport-power-in-real-estate-investing-with-paul-allamby-episode-9/
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Welcome to the Flip King
Joe on the road - heading out to talk to a seller and negotiate a deal.
Description of the deal and what Joe is hoping for.
How Joe has applied “The Replacement Recipe” with this buyer in the past.
Why would a seller bring Joe $20K when he’s selling a property?
Why it’s important not to assume the position of a seller.
What Joe was thinking as he went into the negotiation.
How the selling price got reduced without Joe asking for it.
$20K from the seller - again. But it gets better than that…
The seller wants to be involved as an investor with Joe in the future.
Get off your seat. The money won’t come to you unless you go after it http://theflipking.com/?p=232
Walking away from this #closing with $15K in cash and none of my money in the deal http://theflipking.com/?p=232
Why would a seller pay $20K to sell his property to me? Find out in this episode of The Flip King http://theflipking.com/?p=232
The #SellingPrice of this deal just dropped without me saying a word. Find out how on this episode. http://theflipking.com/?p=232
How the purchase of an #InvestmentProperty can be done with no money of your own. http://theflipking.com/?p=232