Thinking Outside The Box Can Save You Money!

“Here’s A Real Life Story Of How You Can Make A Deal!”

By Van Sturgeon

Real Estate Investor

I live in a world that is full of opportunity and abundance.

I am thankful each day for all that I have.

I am very blessed.

There have been moments where I have been provided opportunities in real estate where I have succeeded, while others have failed. There is one such incident that happened in the early days of my real estate investment career that I wanted to share, and it could be a lesson on how deals are available when you least expect it.

There was a four unit multi-family building that was being prepared for sale, and the real estate agent was bringing their best clients through the property. There was an opportunity to buy the property before the sale went “live” on MLS, as the owner wanted to be discreet about the transaction.

I was interested in the property because it was in an area that the prices were climbing higher, and this was a property that was ripe for multiple offers because of a crazy real estate market.

It was a beautiful spring day when I arrived at the property. As I was waiting for the real estate agent, the owner came out and introduced themself to me and we started to chat.  I love it when the owners are at the property, because you can ask and receive more information about the property, than you can from the real estate agent. Also, it is really important to know why anyone is selling their property.

To all new real estate investors….ALWAYS attempt to find out why someone is selling their property. Finding this information will always help you put in an offer that reflects the needs of the seller, and it could also make you aware of unforeseen issues with the property.

All great real estate investors are good “people persons” and they understand that an actual transaction is more about human psychology and communication than it is about the actual property.

Sorry...Let’s get back to my story.

So...The real estate agent finally arrives and the owner starts to give us a tour of the property. We talked about the basics of the property, the condition of the property, things that they loved about the property, the things they didn't like about the property, what had been recently renovated or upgraded, as well as what areas of the property needed to be fixed. There was a lot of great information gathered about the property, and I was gaining more confidence about making a deal. 

As we continued the tour, the owner was becoming more comfortable with me, and in the conversation, the owner mentioned that they were living on the property in one of the units, and the other three units were rented by people who had been with them for over twenty years. The owner was troubled by the impact that the sale might have on those tenants, as they had become very close to them, and they were aware that their rent was lower than market prices. The owner was fearful that whoever bought the property was going to increase the rent so quickly that the tenants would have to find another home.

Also, the owner told me that they needed to sell the property because their two children were raising families in another city, and they wanted to be closer to their grandchildren and help them raise their families. 

You could tell by the tone of the conversation that this sale was going to be troublesome for the owner, and they wanted a situation that everyone was going to be happy with.

It was at this point in the conversation that I knew that I had to figure out a strategy that would help alleviate the concerns the owner had with their tenants, and create a win-win situation for everyone.

After the meeting, I advised my realtor that we were going to implement a Double Offer Strategy, and this is how it worked. I submitted two offers to the owner for consideration. The first offer was full list price and a fast closing, while the second offer was considerably less money, but I committed to one important condition. I agreed to allow the existing tenants to stay in their apartments at rental increases that were modest for the next two years, so that it would allow the tenants to either find new apartments, or slowly pay more to bring their rents to market prices.

With the Double Offer Strategy, it allowed the owner to make a decision on which of the two offers best met their needs. I knew that the future welfare of their existing tenants was important to the owner, so I I structured an offer that would allow them to sell their building with dignity and help their tenants out.

The real estate agent submitted the offer and we awaited for the reply…

You guessed it…

I got a phone call from the real estate agent in disbelief, with a congratulations on the acceptance of my offer. The agent was shocked and surprised when the sellers decided to accept the lower purchase price, and couldn’t understand why the owner had chosen my second offer. This second offer was considerably less money than the first offer.

That’s ok...The real estate agent doesn’t need to understand why the owner chose to take my second offer at a lower price. When you listen to the needs and motives of the seller, this provides you with an opportunity to structure an offer in such a way that it will get accepted.

It’s not always about the money...Trust me!

Everyone has needs that need to be met, and thinking creatively will allow you an opportunity to score some great real estate deals. I would encourage you to think outside the box when submitting your offers.

In the story that I told you, there were other offers that the owner was given to consider. Obviously, I was the only one who had listened and crafted an offer that made the most amount of sense to the owner.

They also say that the best deals are CREATED...not found.

For more information on house renovations and real estate investing, visit www.vansturgeon.com to help you in your real estate investment journey.