St udent Finds an EXTRA $195,0 0 0 on a Deal
By Chr is Pr efont aine, Your Smar t Real Est at e Coach!
Hidden Prof it s
It?s nice to find hidden profits in any business and
we love finding them in our real estate deals. As a
family business we absolutely love the energy in
the office and the flow of deals. We also do deals
with students (we refer to them as our Associates)
around the Country. This story is about a deal we
did together with Dave in Michigan.
After doing some expired listing calls (homes that
were with realtors that didn?t sell for whatever
reason), we received a call back (our expired dialing
process is automated and utilizes Sly Broadcast ?
you can google that) from a seller who wanted to
move to Florida from Michigan but couldn?t sell his
home with a Realtor after a year or so..
He had filed bankruptcy a few years ago and had
since gotten it discharged but had some challenges.
Specifically, the value of his home was roughly
$360,000 (he tried asking $370,000 and was down
to $360,000 but had already wasted too much time)
and he owed $132,500 on his main mortgage but
had two liens totaling $195,000 so after a potential
offer at some percentage of asking price and then a
Realtor fee he had to try to break even to pay off all
the loans and liens and cover closing costs as well.
To say he was frustrated and tired of the situation
would be an understatement.
How do you f ind sel l ers wil l ing t o do t erms?
One of the biggest questions I get on radio,
podcasts and via email is ? How do you find the
sellers that are willing to do terms the way you
describe? The short answer is you set up virtual
assistants to call expireds and fsbos and you get
real comfortable following up on those who have
expressed an interest.
We structured a purchase subject to existing loans
and liens contingent upon satisfactory research of
those liens with our attorney. If we found out that
interest was accruing or major legal fees and
penalties were on top of the liens (I actually
thought that would be the case), then we had the
option to say ? we?re not satisfied with our research
and we?re out! What we found out is that the banks
had discharged the liens totally already in hthe
sellers? bankruptcy (so they wrote them off their
books) but they were still attached to the home. Our
goal was to negotiate with the bank (same bank for
two liens) and get them paid off at ten to thirty
cents on the dollar, meaning somewhere $19,500 to
$58,500 payoff. Our plan was to break the mold so
to speak and break our rule of using cash on deals
because that would mean a huge upside by
discounting those liens.
I had a few conversations with the bank and was
Page 50