What’s going on everybody, it’s Nathan Payne, and I’m at the Salt Lake City airport right now. And I have to tell you something, I gotta tell you guys, why I lost out on a deal is about a 15 $20,000 deal that I lost out on, I’m making this video. So you guys don’t make the same mistake that I did. Alright. And just so you know that you can use batch leads anywhere in the world, at the airport, at your house, in your office in the Safari, if you’ve got internet in the jungles, let me explain to you guys why I lost out on this deal, and how you can avoid that from happening to you.
So let me tell you a story. So I’m working with the seller, and I get this lead. And I call the seller and I say, hey, you know, are you interested in selling what got you interested in selling took her through the normal sales process? Right. And she was interested in selling she sell quick. She was wanting to retire.
So I went through my process of asking her, you know, what options she’s explored? And she’s like, I don’t really want to list it. Because do you want to list it? She said, No, I don’t really want to, I want to sell quickly. So after taking her through, do you want to keep it she’s like, No, I need to sell it in order to retire and buy something else, we finally found out that she wants to cash off. Okay. So then I run my numbers. And let me show you guys how I get the process of running the numbers. So this is how it’s done. I go to batch leads, I type in the information of the address, look at the property, see the details. And then I kind of have a good idea after that. I talked to her and I’m like,
Okay, so let’s establish what the ARV of your house is worth. What is your house worth fixed up? And her house was worth about? We saw it was about worth 350. Okay. And her house wasn’t too bad. But you know, I started putting in the numbers. And also Okay, so if your house is worth 350, it might take me a couple months to flip, I’m gonna have to get hard money. And if I flip it, I’m gonna make a certain amount if I wholesale that I need to make a certain amount. So I started putting the numbers in there. And she said she wanted 300,000. Right? So I was like, okay, 300,000. Ma’am, if I bought your house, and if I was just a flipper, I would lose out on $70,000. And there’s a 20% negative net profit to flipper no flipper is going to take that I couldn’t make any money as a wholesaler.
Even if I zero this out, I’m not making any money. Okay, so I said, Look, no, the best I think I can do if your house needs a medium rehab, even at 240. As you can see here, it still didn’t really even make sense as a flip. So I needed to be even lower, right. And this is a flip this is how you determine a flipper. If this is a good deal for a flipper, her house actually wasn’t in that bad shape. So might not have taken that long, like let’s just say four months. So you’ve got to see if the net profit falls between a certain percentage, you want to get it into a degree and you want it into between 15 to 20%.
So again, after running the numbers, you know, I was needed to get it at a really low price for it to make sense. So I think I ended up offering her like 220 because I was trying to make about 15 and she denied it. She’s like nah, nah, doesn’t work for me. Somebody already offered me 275. So I was like, Wow, 275 and your house needs about 20 seascape repairs to myself, I thought, how is that even possible that they’re going to make that much money, like they’re not going to make any money is the flip. So I thought to myself, I was like, maybe this is a different kind of buyer. So I was like, Maybe I should do a Novation.
Right. So I took my calculator and I threw in the numbers for Novation, right. So I went over here and I said, okay, the market value 350 Is what the house is worth flip. So if I do innovation 330 Let’s say the market value of the house currently is 330. Actually, I thought it was like 320 kept running these numbers, the way that Novations work is you’re trying to list the house for the seller, and then you’re say I can put in some repairs, so you don’t have to, and you list it for them on the market.
And then you can make a fee. So I said, Okay, if I take this house, if it’s market value, and I put it on the MLS, after repairs and fees, everything, the market value is 320 I’d have to put it 95% 304 After commissions, fees, everything in here. 267 is what my maxilla will offer to her would be if I’m trying to make 10,000. So again, she got an offer to 75. And I’m like there’s no way this must be a new wholesaler. This might be someone that doesn’t know what they’re doing. Because if my cash offer has to be down this low, and then I can do innovation. And then I asked her what about no creative financing? And she’s like, No, I want the money now. So I was running through these numbers. And if you’re all like, well, Nate, are you running through these numbers in your head actually, just so you guys can see. I actually did a zoom call with the seller. And she was walking me through her house. This is me on the call with her.
She’s actually given me a walkthrough of the property as you can see, so I’m establishing the seller at the end after she walks me through a house and I show her some comps in the area what they’re worth. Also, I ran the numbers with her and I said hey, look, this is if we flip it, this is if I listed with you, these are all my options. And at the end, I really couldn’t find a way to beat that other offer that other buyers giving her so I was like, Maybe I’m missing something. Okay, I’m in Utah. This is my market, but maybe I’m missing something. So that’s why I said to her I said, Look, maybe I’m missing something, the numbers don’t make sense for me to go that high to flip it. We’re partner on it. Maybe I could get you that much.
But let me run this by a couple of my business partners. I basically told her, Hey, I’m going to wholesale, I said, Hey, let me run this by my business partners. But in order for me to do this and see if anyone can pay more than me, I need you to give me a certain amount of time before you go sign with someone else. Okay? And she’s like, sure. I’ll give you a week. I’m not in any hurry. This was she said to me, and me being gullible and kind of lazy because I didn’t want to fill out the paperwork that I’m about to show you. I just said, okay, just give me a week. So I filled out like a landing page with her information. She sent me a bunch of pictures, and I sent it out to my buyers, you won’t believe this.
So I sent it out to one of my buyers, one of my buyers is like, Yeah, I’ll take it for two. He said 280. Right. So I have 275 is off. She wanted if I have to beat that or can match it. So it’s 5k. Right? On a deal. That doesn’t really make sense. And I said, What do you want this? He’s like, I want it as a rental. Okay, so the rental numbers don’t really make sense. But in this area, because you have to understand your market. This is probably like the one of the cheapest properties in this area. 275. There’s not very many properties under 300,000 in this area. So people will buy even though it doesn’t make sense, because they’re basing off appreciation. So that’s probably what the other buyer saw. He was like, why don’t we buy it’s still the cheapest home in the area. And I’ll just rent it out and sell it for more later and let it appreciate.
So my guy offered me 280. And he’s like, Hey, I called one of my students. His wife is an agent. And I said, Hey, maybe she has some families that would want to move in. So she said she sent it out to a couple people, and they’re willing to pay 295. So there you go to 75 to 95. That’s 20k. So I’m like right here. I’m like, dang, I got this deal done. So as I’m doing this, the lady said she would give me a whole week, right? This is three days and already fine people, what do you think happens? She hits me up three days into and she’s like, Hey, sorry, the other buyers really pressing on me, I need to go with them. I thought I had more time. And I’m like, whoa, whoa, whoa, hold on here, I have somebody, we just need to let them see the house. And because the other buyer was quicker. And because I didn’t get her to sign anything. She just moved on. You know, after I built that amazing rapport, all that stuff, she still said she’s going with them.
Now look, this doesn’t mean the deals over the other buyer could bounce, a lot of things could happen. But I’m just letting you know, if you’re going to do what I did with the option to purchase agreement where you’re just saying, Hey, we run this by people get them to sign something, okay, because if you don’t get them to sign something, they could say they have a week, they can give you a month, they can change their mind at the split second, buyers. And sellers can change their mind anytime they want. So just get them to sign the right paperwork, taking a deal that I didn’t think was a deal found out because I reached out to my buyers because I know my buyers, within two or three days, I was able to find out that I had a five to $20,000 deal. And the numbers didn’t make sense. Now this is going to happen sometimes, because some people might really like the area, you might have the right relationships to get it done.
But all I’m trying to tell you I’m trying to kind of beg you just like this just happened to me go and get the sellers to sign the paperwork. Let me show you what I should add or sign. So this is called an option to purchase agreement. What the option to purchase agreement is it basically lets you wholesaler deal, you agree on a specific price with the seller. So I would have just said hey, buyer has the option to buy or lease option, the property at blank at 275,000, I would have had her sign this, I would have had her give me seven days seven day option period address you would have signed. And this says right here seller may cancel this agreement at any time if they find their own buyer, but must provide 72 hours first right of refusal to buyer to match or beat the new offer in writing. So again, this could have been something that I did.
But again, I was lazy, I didn’t want to put this into my DocuSign I didn’t want to put it into and a doc that’s actually what I use to send this out to her. And when I thought you know, she would just go with me, because we had a good relationship. She just went with the other buyer because they were serious. They made the offer and they were going to say they were going to buy it. So you know, these are all hypotheticals, but I’m just trying to let everyone know that’s watching this don’t lose out on the deal like me, just because you’re too lazy to just ask yourself like, Hey, I actually have some great buyers in this area, I think that might be interested in it. For me to legally reach out to them I need you to sign this option to purchase agreement just for me to run this by them.
Also, when they sign this you have the right to look for an end buyer through yard advertising the property for sale by owner and beans with the internet social media on the MLS. You can list it or other marketing methods. So you can do pretty much market this out any way you want. With this contract. You’re just being transparent to them and you’re saying hey, look, let me run this by some of my buyers. It’s like wholesaling, but you’re just telling them you’re wholesaling instead of just saying I’m gonna buy it. Okay, so that’s pretty much all I got to tell you guys.
Now I’m not too upset or worried because I just learned I’ve been doing this for four years, five years and sometimes being too lazy and not getting it done. Not having people seller sign and getting that take the proper steps will bite you in the butt but sometimes you got to have some of this stuff happen to you. So you can bounce back and not waste your time not not do it again. So that is how I lost out on deal at the moment. It’s very possible very, very Ask well that she’ll call me back that’s what you got to do you got to get to got to get sellers assigned thanks the batch leads I never give up. Thanks for batch leads I got the right info but just need to sign the right paperwork so don’t lose out on deals take action run through the numbers with the seller run through the numbers yourself so you know exactly what to offer.
This one did not meet the numbers but there was some funky about it found out because I had buyers in the area real quick what it was find buyers do the pain this wholesaling method. That way I was able to find a buyer like that. But again, I should just locked it up. There’s a lot of things that I should have done, but you live and you learn. So bachelors for life. Peace out everybody. Have a great week.
