This could be my favorite post that I ever make to the REAL DEAL category of the MOB website.
It’s kinda hard to get me excited these days about a wholesale deal. I mean after seeing 600 of them, they all sorta run together. But this one stands out in a category by itself.
Keep reading and you’ll understand why…..
- Where This Lead Came From: My Website (Organic Search) for “We Buy Houses Jacksonville”
- Why This Person Was Selling: Hoarding and deferred maintenance
- After Repaired Value: $1.1 Million
- Seller’s Asking Price: $450,000
It was February 26, 2015
So there I was, thinking it was an ordinary day in Starbucks in Freakville Beach. I was drinking my Iced Grande Salted Caramel Mocha. It’s my favorite! I wish I could have one every day, but I can’t take the calories. Well I can, but my waist can’t. Makes me wanna scream.
Anyway, it was around 8:30 am. The lead came in through Zoho CRM. I happened to see it in my email inbox, and I saw a truly motivated seller who was willing to sell the house for 50% of market value. And this wasn’t just any house. It was an oceanfront house in Ponte Vedra Beach, FL.
I jumped off my stool ( I was sitting at the barista bar that day) and called the seller. He willingly told me enough information to know that I needed to get this deal under contract today. There was urgency in his voice. Here was the situation:
He bought the house several years ago, and he lived there with his wife until they got divorced. Only the wife lives there now. There has never been any maintenance done to the property, and he wants to get her a new place to live. She’s a hoarder. The house is full of “stuff” and you can hardly walk in there. He told me that he was well aware that the house was wroth over 1 million dollars, and he knew there was money to be made for an investor. He knew that he could never sell this house to the “public”.
He was in town for only 1 day, which was that day, and said if I wanted to see it, I had to come TODAY between 2 and 3 pm. I quickly agreed and confirmed that I would be there.
As I was listening to him talk, I quickly checked out the comps using my hot comparable sales link from Godfather CRM, and confirmed that the house was worth at least $950,000. This is a hot one!
After checking my schedule, I realized that I had a MOB Borgata meeting that day at 3 pm, and there was no way I could make it there and back by 3 pm. I couldn’t leave my Mobsters hanging without their monthly mastermind meeting. So I printed a contract, gave it to Dan, told him where to be at 2 pm, and told him to give the seller his asking price. and NOT to leave without it.
I went on to do the MOB Borgata Meeting at 3 pm, as scheduled, and was PUMPED the whole time, in anticipation. I knew when we got this deal locked up, that it would be a doozie of a win.
That day we talked about Facebook pixels and how to retarget your website visitors. It was a great call! You should join the MOB so that you can sit in on the monthly BORGATA calls.
Near the end of the meeting, I got the text message from Dan. It was the signed contract from the seller (and his wife) for $450,000.00! VICTORY
The weekend passed, with buyers chomping at the bit about this house. Monday rolled around, and Derek met the buyer and the buyer’s (private) lender at the house.
They went through the house with a fine tooth comb.
They were there about 30 minutes.
Later that afternoon, Derek got the call from the buyer stating that the lender didn’t agree to loan on this house. He thought that the repair cost was too high.
The deal went dead. The buyer forfeited his earnest money deposit. (We explained to him that he would lose his EMD if we tied the house up over the weekend).
Derek started making calls to buyers again, letting them know that the contract fell through and it was available.
Within 48 hours we had a new contract signed from a cash buyer. One that we do business with all the time.
Because of the nature of this type of deal, and the “luxury home” category, he was unsure what the final value of the house would bring, so he didn’t want to get in over his head on the purchase price. I felt pretty certain about the value of this house, so I wasn’t budging off of $550,000 purchase price. Then, something magical happened…..
Together, between me and Dan and the buyer, we came up with some very creative terms that everyone was happy with.
The purchase price with the buyer is $525,000.00. There are a few stipulations, however.
If the final sales price of the house is greater than $950,000 then the buyer will pay us an additional $30,000 within 48 hours after they close with their retail buyer.
If the final sales price of the house is greater than $1,000,000, then the Buyer will pay us an additional $50,000 within 48 hours after they close with their retail buyer.
USUALLY, we have a general rule of thumb if we’re making an assignment fee of $15,000 or more, that we’ll do a double closing (2 HUDS). But I’m overcoming that “fear”. I’m realizing a few things:
- Sellers don’t stalk the buyers side of the HUD (and this is where the assignment fee is shown).
- If the seller is motivated, and you’ve created a win win situation, then it doesn’t matter how much money you make.
Of course, there are going to be those special circumstances where you just feel like you don’t want either the buyer or seller knowing how much money you’re making on the deal. In that case, do the double.
For this closing, I made the decision to put the $75,000 assignment fee on the HUD and do 1 closing. I had no worries whatsoever that either the buyer or the seller would have a problem with this.
I was right.
The transaction closed without a hitch and we brought home a check for $75,000.00 There’s also a possibility that we might have $30,000 – $50,000 additional check coming in the next few months. I feel pretty certain that the house will sell for at LEAST $950,000.00, especially with the plans that this buyer has for this property.