One of my absentee direct mail post cards found its way to New York where this elderly owner resides. She calls & tells me her estranged brother lived here in California for many years but had passed away and she would indeed like to sell the property. It was a small 2/1 farm house like home, along with 2 acres, a few sheds, a pole barn and some massive oak trees.
I mailed the seller an offer of $80,000 and I estimated it could be worth $160K if it was in livable condition. Seller’s son, Kevin, calls a week or so later and tells me they accept my offer and it took a few weeks to mail the purchase contract and get it back signed. I had advertised the property on Craigslist because none of my regular buyers wanted this fixer upper 60 miles from the city & out in this small cow town.
I met one potential buyer at the property and he wanted it and said he had $20K cash and would get a bank loan because he had good credit. I told him I don’t think any bank will loan on a fixer investment property. He got on the phone with his son and I walked off to check out the abandoned looking mobile home on the property next door. I almost crapped my pants when I stumbled what appears to have been a big pot farm. I quickly got the heck out of there and told the buyer to call me if he gets the loan.
I was getting plenty of calls from my ads. One buyer named Efrim insisted I meet him out there because he wanted it and had cash. When we met his first question was “How did you find this property”? I told him I spend a lot of money on marketing. Efrim and his wife were an attractive Mexican couple in their mid 40’s. I remember asking Efrim how he made his millions and he said they sold a house in Los Angeles for a good profit.
Efrim gave me a concerned look and asked, “You want me to pay seller $80K and you $15K?” I looked him in the eye and feeling confident as hell, I replied, Yep. He says nobody wants this property. I laughed and told him in the 2 weeks since placing my ad on Craigslist – I’ve got a dozen calls. I told him everybody wants it, if fact if you don’t want it I got another buyer ready to take it.
He signed right there on the spot. Buyer was no dummy though and hired a guy to check out the well which ended up being dry and non-working, with an outrageous estimate to drill it deeper to get it functioning. You guys know what that means. I went back to the Seller. I was able to get seller to lower price to $65K and got buyer to do $80K. These negotiations took another several weeks.
At one point the buyer was driving by the house and found someone was dismantling one of the out buildings and loading up the lumber. He even texts me photos. I tell him to call the Sheriff. The culprits tell buyer they are relatives of seller and have permission to clean up & take this building and whatever else they want.
I contact the seller’s son Kevin and he gets ahold of his Mom who confirms that it was relatives but they had no permission to take anything or be on the property. They advised us to call the cops. My buyer Efrim confronts and talks to them again to only find out that they are also neighbors. He handled the problem somehow and I never found out how it was resolved.
My favorite Title Company informed me they no longer do assignment contracts and they recommended a mom and pop shop in a nearby small town where the farm house was located to close the deal. My luck, this new Title Company, was being run by 2 elderly sisters who had inherited this business from their late father and they tell me they are retiring and this is the last transaction they will be doing. These old gals were sweet as pie but were slower than slow.
It took a few weeks & seemed much longer to get the Title documents signed. We had many issues for example: missing death certificate of the late husband, first time they misspelled seller’s name, seller was unable to get to a notary for over a week due to a severe snow storm, along with a few other delays. My buyer Efrim was calling often and even going into the Title Company a few times to kick these ladies in gear.
It took about 3 months total to complete this wholesale deal. Finally the title company called and asked if I wanted them to mail my check? I said, nope – I’ll be there in an hour. The Title Company was actually an old ginger bread story book looking house on Main Street, with train tracks going down the middle of the road. It was painted nice with flowers and a gorgeous hand carved decorative wood sign. It had original oak floors from 1920 and every step was loud & creaking.
The one lady that was handling this transaction was gone and her sister couldn’t find my check. After a phone call she finds the folder and sees that it’s not signed, luckily she had the authority to sign the check. It took 5 minutes for her to find a pen. I walked out of the Title Company with a check for $15,000.
Later Efrim tells me they found a dead possum inside the house and his priority now was getting the well up and running. I mailed him a $100 bill to take his wife to dinner and congratulated him on his wise purchase & told him to stay healthy and prosperous.
It was a fun deal & I felt good because everybody was happy.
Let’s wholesale some houses and make some Money!