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I have called the number on a for sale by owner sign (buried in deep grass and no longer displayed) of an abandoned type of house in my area…
The man who has this phone number is an Attorney. He told me he is ‘partners’ with the owners. He eventually opened up and told me that the owner is an elderly woman whose contractor disappeared/left town with $50k of her money; he had ripped the house inside down to the studs before he left town with her money. AFter that happened, the woman contacted him, and he became her attorney, and has been trying to sell it for sale by owner for a while since then (and that he is her partner). He says he only is getting calls from Brokers; and that ‘the house will be worth $800,000 again once this economic snaffoo is over’.
But for now the house is unlivable. The woman’s daughter is also an owner (per the ATtorney); the daughter has medical problems they need money for.
The attorney told me the house can be torn down and 2 condos can be built on it. But this is Coastal California- getting permits for new development is a long, and uncertain process, ie expensive w/an unknown outcome).
I asked him ‘If I pay you all cash and close tomorrow; what is the best you can do?” He gasped, was shocked, incredulous; I confirmed all cash/fast closing is possible (..depending on various factors..!), he said $750,000….I said ‘is that the best you can do?”
He was nice, and said, ‘well, that makes me bid against myself…I can’t do that (bid against myself)……why don’t you tell me what you are willing to pay and we’ll go from there?”. I told him I’d do some research about the ppty and call him again after doing so. (he did not know how many bedrooms/bathrooms were in it, etc..because he is an out of town attorney).
I peeked in windows of house; The house is walking distance (4-5 blocks) to ‘the world’s safest beach’, in a charming Calif coastal town……but it is indeed ripped to studs inside. It has a concrete perimeter foundation. Ceilings have been opened up. New crummy vinyl/plasticky type of windows are installed here/there. All pretty badly done. SOme building materials stored in shabby 2 car garage. Wood siding is in chewed up condition here/there.
SO…..I wonder what to do with this, if anything. I have many different investors/builders/developers etc….and I have set up my own property management business via Tilney’s Course on Master Leasing etc. I have remodeled many times in my life.
Does anyone have any ideas re: what to do? I can try to wholesale it; with an option.
But, are there any other arrangements I should consider trying to negotiate with him via my contacts, etc. ? I am wondering if there is a Jack MIller type of solution; ie such as to creatively structure … ie sometimes he has had handymen/fixer pple live in properties while improving them, at very reduced rent, etc…Some of my investors want to acquire properties right now; they can improve properties, but don’t want to be landlords; I could do that…if it was wise/profitable for me. Etc. (??Any suggestions?). Our prices are so low right now; ie down by about 40-50% that it may be wise to fix/hold this for possible resale in 5 years..ie if it can be acquired for right price now; or good terms, or even in a partnership of some type where I put it together, bring in the investor/contractor, and manage it perhaps till the turn around/sell….Or ….?
(He says they will carry w/$500k down…I think someone may be willing to pay $500k for it, total, at this point, but no more.). It is free and clear. The woman bought it for $16,000 many decades ago. Due to his being located 1.5-2 hours away from here, and the unlivable condition of the home, the problems /uncertainty of developing condos here, plus the daughter’s medical expenses coming up…I think they are in a jam. (but he has let the for sale sign fall face down in the grass; so perhaps motivation is not keen enough yet…?)
what type of deals should I consider for this, if any?
Thank you.
DFirst thing you have to do is flush the attorney. You will be unable to negotiate a good deal in all likelyhood with him in the way. It’s worth 750k now and it will be worth 800k “some time in the future”? This has fail written all over it. Obviously he is not motivated. Based on what you have told me about the owners, they are motivated. For this economy and in this condition you need to be getting this for around half of what they want or even less. Can you trace the tax records to find the owner? If not, I say walk.
Gregg: thank you. In fact, I had found the owners names/out of town address after leaving the forum…Are you suggesting I contact them now; even though his phone number was on the for sale sign/even though I have spoken with him? He says he is a ‘partner’ with them; ie the elderly woman and her daughter; but I think he is blowing smoke; ie as you are suggesting.
When I call the owners; should I tell them I had already spoken with him; or just go for it…I just wonder if he will step in at last minute and destroy whatever I negotiate with them directly (ie out of ego, or…?).
But, he WAS pretty excited about my ‘close fast/all cash’ possibility.
thk you
d
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