Anthony just flew back from Miami from the Art Basel festival and the next day, we were already on our way to view our VERY FIRST house together and get it under contract. Before Anthony left to the festival, he received a phone call from a motivated seller. Someone we have called a few weeks ago in Upstate New York, about five hours away from us. This was perfect for us, because we had just hit a slump, realizing we were not actually finding wholesale deals, but offering investors other investors’ deals. Then we received a phone call from this seller, saying he really wants to sell his house, and move to Florida with his girlfriend. He has been trying for a long time and he hasn’t gotten anywhere with it.
After that call, we remembered that this is what we’re all about! Helping distressed sellers like him sell their homes.
We booked an airbnb in upstate New York, because we knew it was going to be quite the travel for one day if we drove for a total of 10 hours. We arranged everything we needed, in preparation to getting our first deal under contract.
We found an attorney, a title company, and got our contract ready. We did our due diligence, researched the property, found its tax records, and found the comps in the area.
The owner’s original asking price was $80,000, but he knew he wasn’t able to sell it for a long time, so he told Anthony that it is negotiable. Comps in the area show the house to be worth at around $40,000. The owner also said repairs for the house are around $5k.
We left at 8:30 in the morning and drove for four and a half hours. Finally, we arrived at around 1 pm, as we pull up to a house that looks very nice on the outside. It was very snowy up there compared to NYC! Anthony and I were excited.
We meet the owner, and got to know him a little bit. He told us he’s in the car business, so he buys and sells cars. Similar to what we are learning to do, just with cars!
He gives us a tour of his property starting with his garage. Well a garage is a garage, right? Can’t expect from it anyway, but it did need work. Moving into the house, unfortunately wasn’t much better than the garage. It needed a lot of work. Like, a lot. Like, four times the amount he originally said it would cost.
He needed to fix floors, his bathroom, his kitchen, basements, doors and… well, let’s just say it would probably be best to tear the house down and built it back up. The owner said he has been trying to hire some workers to fix it up for him so that he could sell it at a higher price, but all of his workers pretty much gave up on the property. They left their toolboxes and just never came back. But hey, I don’t blame them.
We talk to the owner, and tell him that the repairs for the house are at least going to cost $20,000, and he replied, “well it depends how you want to fix it up”, to which I replied “appropriately”.
Then we go back to his kitchen and start talking about the offer we have for him which is $42,000. He asked, if that included his mortgage, to which we replied no, but he will still walk away and fly to Florida with a good amount of money in his pocket.
He said “no way, I’m not taking a low ball offer like that”
We told him, will all due respect, that this is not a low ball offer, and it actually a bit higher than what the property is actually worth, taking all of his repair costs into consideration.
“I’m the car business, I know how this works, and my house is worth way more than that!”
We told him that we did all of our research before driving up there for four and a half hours, and we know the situation that he’s in, and would love to help him sell his house faster so that he could finally move to Florida with his girlfriend.
He refused, and said that he was not desperate to sell, and still wants to hold on to the property and sell it for more. If it hasn’t sold yet… what makes him think he’s going to sell it for more?
We thank him, realizing that there is really not much else we can say, and drive away. At first, we truthfully felt a little disappointed. After 5 minutes of us processing what happened, we were back and thankful for that experience. We knew we did everything we could from our part, but that seller was not as motivated as he said he was, and there was just only so much we could do to help him if he doesn’t want to be helped.
We then drove on our way to the AirBnB to spend the night in a very cozy cabin in Mechanicville. Although we were expecting to celebrate getting our first property under contract in the cabin, we still had a wonderful time and planned out how to keep going.
This was one of the biggest lessons of our career so far.