The Purchase of our 3rd House Flip
This acquisition was interesting because we picked this up off the MLS. Most investors don’t waste their time on the MLS anymore. Houses that are listed on the MLS and need updating receive many, many lowball offers. This means your change of getting a lowball offer accepted on an MLS property is very slim. Many investors don’t even waste their time on these properties.
This condo was originally listed for $190,000. It is in great shape and is in a great location. It’s in a quiet part of the complex and is just steps from the golf course.
It went under contract in 3 days, but quickly went back on the market. It went back on the market quickly so I thought maybe it smelled really bad or had something really wrong with it. This complex is a 55 and older community, so lot’s of residents there don’t want to do major home renovations. They just want a nice place to live.
I went and looked at the condo and there weren’t any glaring issues. I know the complex fairly well, and knew that there weren’t any major assessments or any major structural or mechanical issues with the building. So I called the listing agent.
The seller’s husband had recently died and due to a mistake on their original title, the seller had to put the property through probate. The title wasn’t solely in her name, so she had to get it in her name. The original buyer didn’t want to wait around for that, so they terminated the contract.
This gave us an opportunity however. We offered $174,000, to pay all closing costs, and to move the seller’s belongings for her after closing. We agreed to be flexible on the close date, so the seller would have time to put the property through probate. Also, we offered a $10,000 non-refundable earnest money deposit. Essentially, if the seller could provide us with a clear title, we would buy it, or she would get $10,000.
This was a good deal for her, because she could go through the whole probate process without having to worry about trying to find another buyer. We paid for closing costs and I didn’t take my buyer’s agent commission, so her net after selling costs was about $5,000 higher than it would have been otherwise.
She accepted the offer and probate went smoothly. She also had all her stuff moved out before closing, so we didn’t have to worry about clearing it out.
This is yet another example of how real estate investing is really about relationships and solving people’s problems. It’s not just about the money. The seller was willing to accept a slightly lower price for the certainty of a sale and for a lower stress level.
The demo guys are there as we speak, removing the kitchen cabinets, tearing up old white carpet and removing some walls. Here are some pictures of what it looked like on the day we bought it.