The Best Real Estate Investing Tools

I was just thinking about an appointment that I had with a seller a couple months back and I thought I would share my experience with you.

I received a phone call from this seller off a newspaper ad that we run in the Pennysaver.  That little ad has been pulling pretty well for us and it is very inexpensive.  Anyway, he was really ready to deal.  He was going to be behind on his payments and needed a solution quick.

Before I went out, I got his information on my Property Prospecting Form and it looked like there might be some room to make a deal.  When I got there, he was a really cool guy and I could sense the motivation immediately.

He had mentioned that another investor had already been there but

didn’t offer him any money and would just take over the payments on the house.  The house did need some work and just by looking at the numbers, that was about right but I decided to see what he was looking for.

It turns out that he wanted $25,000 to move, which was most of his equity.  Ordinarily, I would have tried to talk him down, but this time I decided to go with it.  I did have him agree to get $12,000 up front and the rest when we refinanced the place later.  Big deal. I signed up a contract and we were on our way.

We set about doing our due diligence on the property.  As it turns out, the rent and market value weren’t as high as we originally thought.  I called the owner back and said that we wouldn’t be able to buy the property because the market wasn’t there.

At that point, I could just hear the stress in his voice.  He asked me “Well what if we sell it to you for what we owe?”  Of course we had thought of that and the numbers didn’t make sense even if we took over the loan balance but that got me thinking…

The first investor had offered him the same thing but the owner rejected it but here he was offering it to me!  The fact that time was running out played a part, but after discussing it with my business partner, we came to the conclusion that as long as the numbers on a deal are in the ballpark, sometimes it is better to just get a contract signed and then do your due diligence.

That not only puts you in a stronger bargaining position, but you don’t waste too much time researching the property before you go out.  That is just our opinion, what do you think?  Feel free to leave a comment below.