How to explain cash offers to a motivated seller

In this video, we’re going to show you how to explain cash offers to a motivated seller. We did a live call where I explained to them their options and what I can do so we can get the deal done. Check out this video to learn more.

It’s nice meeting both you really the reason why I like to hop on calls like this where we can meet face to face is because you probably you’re getting tons and tons of calls. Sounds like you’re getting a lot of people that are saying they can do certain things. And they’re not, they’re not able to complete. And I know that can be really frustrating. So I’d like to just introduce myself. So you know, you’re dealing with a real person, like an investor, right.

So I was talking to John and remind me your name one more time, ma’am.

Then Okay, then. Is that correct?

Yes. So Vim and John, there’s a couple options that you have to sell your house, you already know that, but I’m assuming that most of the investors that have been talking to you are all just trying to lowball you. They’re trying to just get the property at like a really low price when they’re offering cash is Has that been the case or not? Not really.

Yeah. I mean, there’s two that’s offered. I haven’t heard much back from them. And then the one that gives me what I want, that’s I’ve tried to I got him come up on the price. She’s about voices a bit more raspy. Obviously. It’s okay. I think what they’re doing, they’re saying, backup at the title company they use. And then then he comes back and says, Well, we’re supposed to cover all closing costs, but we found that the closing cost their vote cost a little more. And so I think they’re trying to like, you know, get that little $15,000 back out, and I can tell you exactly what they’re doing.

Because I’ve been in this business for a long time. And I’m extremely transparent with what how the real estate industry is right now. Okay, so I’m gonna give you I’m gonna give you all the information you need. Hopefully, we can work together at the end of this and if not, it’s okay. At least I was able to give you some good info. All right. Okay. So John, what they’re doing, and this is this is a term it’s called wholesaling, wholesaling, real estate. Have you ever heard of that? No. Okay. So what wholesaling? Real estate is them. And John is, I’m a buyer, and I go to you, and I say, I’ll give you 275. And you say, okay, great, thanks. And then I go out, and I go look for someone who I can assign my contract to, or sell my contract to, to make a fee. That’s exactly what they’re doing. That’s what’s happening right now, these guys told you, they could do a price without knowing they could really do it. They’re looking and they probably found someone that would do it at the price, but they’re too high. So they’re saying, Hey, John, I need you to lower so we can get this done, because they want to make a margin, but that’s gonna bring you lower than where you want to be. Right? Yeah. And I do that strategy sometimes.

But I tell people gotta bullshit. You know, this is a, you know, if you’re trying to tricky, you know, in this like, yeah, you know what’s going on?

there’s no reason to lie about or be shady, these guys are just trying to make some money, and they’re not buying the house. Okay. Now, there’s a couple options that I have. I work for a lot of hedge funds throughout the United States, I have a lot of good buyers, one of the options that I have is I can do what they do and reach out to my buyers and say, Hey, what are you willing to pay? Let me see if it works for John. And if it does, then I will just have a little bit of my fee. You don’t pay me anything, they pay me and I bring them to the deal. That’s me being transparent about what they’re doing. That’s an option, bringing an investor in, I’m bringing an investor and that’s, that’s all I’m doing. So that’s one option. Now, the investors that I work with, they still want their investors, so they’re looking to buy it at a discount still, and then make a return on their money. Now, that might not be the best option for you. Because I know you’re trying to make at least $50,000 on top of what you owe. Yeah, I have to have that. Yeah. So I know from looking at the numbers, I’m going to kind of show you guys how the numbers work on on real estate investing properties. I’m going to share my screen. This might be a little small on your phone, but let me know if you can see. See this. Can you see the numbers here? Or is it is it pretty small? Yes. Sounds a screen where? Okay, so you all can see this? Correct? Yep. Okay, so I’m going to walk you through how an investor see a cash buyer, the ones that you’ve been talking to how they analyze a deal to make sure they want to buy it. Okay, I did the research on the property. And I think if we were to fix the house up and make it look pretty nice. It could be worth $350,000. Does that sound fair?

Yeah. And it was worth 375 like a year or so ago? Right.

So it’s all gone down a little bit since interest rates have gone up. So I’m saying the house is worth about 350? Yeah, so I’m going to show you your asking price for the property for cash out the door so we can close ASAP is 275. So I got your what it’s worth if we fix it up and 275 is what you’re asking for most buyers that I work with have they borrow hard money, they borrow money from a private lender, and they have to pay interest and points and they have to hold the money for a certain amount of time while they’re fixing the house. It’s called the whole time. I was looking at it in the background.

It looks like it’s in pretty decent shape doesn’t look like there’s that much work on the paint painting monitor, maybe two doors painting.


so I think if we’re generous if we just conservative we can say by buying your house, you move out paint carpet, doing some of the finishes and then listing it. It could take about four months to do the whole process. Does that sound fair?

I think I don’t know. I think it’d be done sooner because within the next two weeks, there’s gonna be some things done You know, the finishing on the back porch, we got to put the door back on. I mean, there’s a lot of little things

are you going to do that because I would recommend you that if you if you don’t need, I will say don’t do it, save your money. So let’s, let’s say four months now a flipper, they’re gonna have to pay all this money and holding costs, then they have to relist the property with a real estate agent, they pay 3% to the listing agent and three to the buyer. So that’s 6%. And they have closing costs. That’s the money that the flipper sorry, go ahead.

Yeah, no, that’s, that’s what’s killing me.

I know what’s killing you will also kill potentially kill a flipper, if they don’t get at the right price. So we’re gonna say, to do cosmetic repairs, and carpet paint a door, we’re gonna go with a basic rehab. So we’re going to take the square footage times to $18 per square foot, and we’re just gonna say it’s gonna cost about 27,000. Because that’s what it is. So yeah, that’s why we’re having this discussion. 27 is that the average of a basic? Right? What do you guys feel like it would would cost to update your home to get it to that 350 level?

Well, I’m just curious what you think I know that a year ago, there wasn’t as much done year and a half, and it was almost up 375 You’re in southwest Florida. It’s fast. What did you get all these rich people to come down here, they don’t give a shit about money, and they don’t have a house. That’s why we don’t have state taxes. That’s why you know, Naples is Naples. The point being is you get them in a little bit of a bidding war. And you’re $300,000 home just sold 375. Now, yes, that’s a risk. That’s your gamble. But that’s what stocks and that’s what you know, when you start talking to hedge funds and stuff. Oh, I know. It’s, I think with minor pain, you get a pain here. And here for 2500 bucks, you can paint the entire house, that’ll be done. So then what else needs to be done? Everything taken out all the floors? It costs 10,000. When you do that in that one number? No. Yes.

What does 8000

Yeah, that was different. They did scream and everything else they did 1000

So overall, his wife was two.

So we don’t, you don’t have to come down to like an exact number. I’m just giving you showing you kind of how flippers work and why everyone’s low balling you, it might 20,000

I worked in construction for 15 years. Yeah, but I ever did shit about construction. So I mean, you could come in here, you come in here with a cleaning crew, and totally wipe this broken place down to probably put in $10,000 and sell it for $350,000. Easy. So a little bit a little more than maybe 5000. I’ve already looked into doing all this I was our thing was gonna be 30 years, we’re getting divorced. You can see the bickering starting, you’re gonna love it,

I get it, you’re gonna make it.

We’re gonna live here for 30 years and then sell it and then, you know, build a plate, another place and a place in the Philippines. But you know, again, this is just my numbers is what we all want it. And I’ve spent my basically my entire savings and everything on it. If I can get 50,000, I’ll just read at least for make $500 a month off of it for the next five years and value selling

John me and you are on the same team. I’m just kind of showing you why Yeah. So let’s just say let’s just go with 20,000. All right, we’re not going to say we’re not going to say 27, we’ll say 20,000. Alright, so looking at it, if you can resell this house for 350, and I buy it from you 275. I have all my hard money costs, and I’m gonna make $13,000. Now that’s, that’s a 4% return on my investment, most investors will not do that. They want to be in the 15 to 20 because of the way the economy is going, they want to make sure they’re making a good return on their money. That’s why these guys that have been messing with you because they’re getting lower offers.

Now, another thing is, they don’t live here. They don’t know the neighborhood. They don’t know how desirable it is. This is one of the most desirable neighborhoods around it. And like I said, this place is growing like crazy. And if you walked in, you knew that the people, the neighbors, the kids, you know, you look around, I know that doesn’t make put value on the house. But that puts value on quality of life. And that’s like I said, you know, again,

I know it’s a nice area. I love Florida, I just was just there, but I’m letting you know for to make sense for a flipper. Most offers they want to get in the green. So what what’s the cash investors? Right, right? This is cash, I’m telling you right now that cash is probably off the table for you. Because it’s just not no one’s gonna get you the number you need for some of them to get into the green for their investment to make sense for Dubai. Even if it was like a $10,000. Rehab, you’re gonna be around like 240 and 240 is only getting you about 15. What is that? That’s getting you $15,000 To walk away. Okay, walk away. I agree. I don’t think I don’t think you need to.

I mean, like I said, we could if we had to rent it for the next two years and sell it for probably 350 Is your feedback layout is exactly so let me ask you this is renting.

Now. Now that you’re saying I’m not telling you this is my offer. I’m just showing you the math that most investors are looking at knowing that this is where most people are going to be and I’m sure you’ve gotten some offers around here. is renting Do you guys want to rent it and not You’re not going to accept this? So is renting like really what you’re going to do if I have to? Okay, so you say have to so you obviously know, there’s some other options on the table than cash. Right? Well, of course, the other options that I have as a company that I can provide you with are these, okay? There’s two ways that I can get you your price that you want. Cash is off the table, it’s not going to get what you want, I can only do 240. And most investors are going to be there. You’ve told me that you wanted to renovate and resell it, but you don’t have the time, right? First of all, it’s going to take four or five months to get it done and sell it. And I’m assuming you don’t want to put $20,000 into our 10 or 15. Or you know, we’ll have it we’re out of money. So renovating is out of the question. So that leaves two options that I can help you out with, there’s two things the market right now I wouldn’t be able to put this on the MLS for you guys, I can put I can list this on the market and look for a buyer that would be willing to flip this with me. And because the MLS, it’s going to be able to get more eyes on this property, more attention. And then I look for a buyer that I can work with to buy your home and flip it. That’s what I do. I take this to the local market, I pay all the agent, realtor fees, the Commission’s I take care of everything, even if there’s additional repairs that someone comes in and says, Hey, this looks like it needs to be fixed up, I’ll take care of that I actually I take care of everything, I’m different than a real estate agent, a real estate agent is just going to list your home and have a bunch of people walk through, I’m specifically looking for a buyer to partner with and I will pay the fees if they see anything specific needs to be done. And you will not have to pay commissions or fees to an agent. So that’s what I do for a lot of people. I’m doing it in Texas, I work with people all over the country. And that way I can pay you more because I’m going to find a buyer to partner with using the MLS. And that way we can offer you a higher price than the 240 cache. That’s because that’s not going to work for you. If that’s not something that you’re interested in and you just want to list it with an agent, that’s okay agent, you’re gonna pay the Commission’s in the fees and have to communicate with them my way is you don’t have to worry about anything. And I’m just going to say, I’m going to come to you and say, Hey, we’re closing, I got everything taken care of this is the price, and we’ll get it done. Do you have any questions about that strategy that I just explained?

Um, I understand it.

I don’t have question. Okay. Now that’s playing Morgan says email. I just read through some things.

Okay. But that’s not the only one Can I can I tell you about the other option, okay.

The other option is I basically give you the a certain amount of money down, I get your equity out, and I just take over the mortgage payment, I take over the property, and I give you your asking price. So that’s called an owner carry back or a subject to where I just give you your equity and then I take over the property. So really, that strategy really depends on what your payment is every week or every month and what your interest rate is, what is your monthly mortgage payment, by the way,

we pay bi weekly 18? bi weekly nine, bi weekly nine. So it’s a little extra thing, but it went up? Because our our insurance doubled and insurance doubled down here.

$1,800. Right. Yeah. Okay. Now, if we did something like that, I would obviously it have to be an investment where I make a return because of my 8.75 annual

Oh, your interest rate. Yeah, soundproofing, your payments shouldn’t be that high.

I don’t think if if you owe 225 most simple was because the insurance doubled. It added like another 100. But we pay a little we’ve always paid little like we rounded up like you know, 50 bucks, and then we pay bi weekly to kill you don’t get that extra payment.

Okay, so would that be?

The actual is what 17 Something? Our property taxes aren’t bad. They’re only like, 14,

could you text me or email me? Your mortgage statement? So I could take a look at it and see if that would be something we could do. Or we could just get you your equity or close to it and then just take over the product?

Me? Yeah. Okay. I can tell you what equity is there. But I can get in there and everything on the website.

Okay. Yeah, if you can text me like a screenshot of that, that would be an option. So those are the two options that I have for you that I think to cut like a better option? Yeah, I think I think that would be a decent option because it would be able to get you your money fast.

Money and you’re going to just fix it up and then you’re going to sell it.

So on this property, I would actually just keep it as an Airbnb or a rental. Good idea.

Yeah, I would just take that in Manila. Get one of their right to manual, oh, boy.

But the thing that would have to make sense on this, John and V is would have to make sense as an investment where I can cash flow and I can rent this out for more than mortgage payment. Yeah.

They say Zillow recommends between Well, it’s been anywhere between 2020 500 a month, right, you know, a small family or something. So nobody’s buying down here, right? The rich people because rent is shot the roof but then there’s nowhere to when exactly. We had lady tell us Yeah, her budget was 20 to 50. I mean, she was ready to go.

Let me ask you a question really quick. I’m curious about the full service program where we put it on the market to find a buyer. We’re able to pay you more and we take Hear the Commission’s fees and everything and it would get you a higher price. Is that even appealing at all? Or Not really?

The last two options found the best. Okay? Can you email some information when we can sit down and actually read it and talk amongst me and her? Of course, I like the idea of the cash out equity, and then we just take over the payment because the numbers are low, okay, you have to make money. Well, just because like a bank, most banks only loan you 80%, you know, a percent of equity. So then that’s where you’re gonna make some of your money as well. I’m gonna assume that’s where we’re bargaining and going, Okay, if we have a few $100,000 in equity, well, we need to bring it down to you know, 150, or you know,

exactly, exactly right.

Yeah. So you scratch my back, I scratch your back.

Yeah, as long as it cash flows. For me, if I’m able to make a decent amount of money, like, for example, if your your mortgage is 17, and I can make at least 500 600 cash flow, then that usually makes sense. But again, I have to run your numbers and look at your mortgage statement. Oh, give me your meds on it.

That was on a 15. year that was on a 15 year loan. So it’s worked out. We’ve had it for two. So that’s on a 13 year loan.

Oh, okay. So that’s why it’s a little bit higher, because on a 30 year, we got we got

what it is we refinanced paid stuff off and then interest rates really plummeted. Someone got the good interest rate on it.

Okay, it’s on a 15. Year that makes complete sense. What is your email John?

My name John McCarthy? MCC, you are D isn’t David y f L as in Florida,

And what was your email?

Mine is Lady V as in Victor G as in Go, lateral ES and echo

So what I’m going to do is I’m going to send you a screenshot of this, the options that I have available for you, I’m going to send this so you can read over it and see what your you know what you think it explains what we do on each of these. So you understand like the terms and everything. This is not obviously not the last conversation I want to have with you. I think, you know, if you want to feel comfortable work with me, we’re probably gonna have to talk again a couple times. But tell me how you guys feel right now I know you’ve talked a lot investors, do you? Do you feel like I’m a trustworthy guy? Do you feel like you’d want to work with me if we can work something out? I like to gauge where you’re at.

Yeah, I mean, you seem like a decent guy, you’d give many options. And so that’s, that’s a good thing. We’re usually you only have, you know, two options, the best maybe three, or, you know, you got the one option either sell to an investor or assault to whatever. So at least given us something to look at, you know, on paper, because you can talk to me all day about it, but tell I can see it on paper and look, you know, it becomes a little more real, that just lets you go. I say if you don’t write your goals down on paper, well, then they’re not real wish. It’s just a wish, right? So this will give us you know, we can sit and pour over it this evening. Our only other option is the one seller met on he tried to bring us back down. I haven’t talked to the other guy in probably three days. She has one agent that she likes that basically they can list it internationally. So a lot of Europeans come here. And if they don’t sell it within the allotted timeframe of three months, they’ll buy it.

Okay. And by the way, usually when they say they’ll buy it, that means they’ll buy it.

But that’ll be predetermined, you know, in the contract, we will be able to get to tonight and call you in the morning. And then where are you? Where are you right now?

I live currently, my home base is Salt Lake City, Utah.

That’s where you’re three hours behind just

yeah, yes. It is. 330 midnight, nine o’clock? Yeah, you can? Or you can I think you got my text, right? I sent you a text and you got it. Yes, you can text me. We can do a group chat if you guys need to. But just know, I’m just letting you know, upfront. If it doesn’t work out where you go somewhere else, no hard feelings. But I think either option, whether it’s the creative, where we take over the payment gets, you cut you the equity, or we list it and we don’t have to pay any fees. I think that’s going to get you the quickest and the fastest offer and get you the highest price forget to cash, it’s not going to work.

Oh, just trying to get get does. It’s it’s not a burden, but it’s just too much. And my mom’s dying, and we’re going through a divorce. She’s staying with my mom, and she’s elderly, and she helps her fall out here and I’m trying to get things right. And we’re just, we’re just ready to, you know, move on, I get it. You know, it’s because we’re driving back and forth, you know, 50, you know, 200 mile trip 50 miles each way a daily and we’re trying to get things boxed and you know, moved out and assists it’s starting to get stressful. So we’re trying to you know, get it done. We do have, we do have guidance from us. Of course, we’ll get through I’m sure everybody, you know, there’ll be this nice timeframe for him to get things together.

But I’ve offered him assistance, you know, as well, any amount but each one of those options we close on your timeframe. So if you guys need some extra time, that’s totally fine. Anything with the both options well possible. Yeah. And by the way, anything you leave behind with those two options as well as fine because we’re going to have to go in there and fix it up anyway with any either of these options. So I there’s there’s some homework for you really quick though, if you decide you want to work with me just I just need some pictures of the house and like a video walkthrough,

if you can send that, to me texted to me the pictures, and I’ve been cleaning the last couple of days, let me get like I got my white bench and some white sitting in the middle of the living room. I’ll move that out, you know what I mean? At least so you can see it a little more. Okay, yeah, that’s no problem.

Yeah, if you can get me that stuff. And you say, Hey, let’s go for it. I’ll write up the paperwork on Monday. Have you sign it? And then we’ll start moving towards, you know, the clubs. All right. All right. Any other questions for from either you all from the boxes?

I mean, we got big boxes that we send to the Philippines. I mean, everything’s gonna kind of you know, and a little disarray, but we’d love to get them all straightened up. And if anything, stack the boxes, you know, to the side, so you can see everything.

Don’t worry, a lot of people send me pictures where they’re moving, it doesn’t affect what we’re able to offer anything. We just kind of need to see the general condition of the property.

Yes, that’s best we can do isn’t good condition.

Everything’s everything you want to say?

I can, I can watch the video quality just because we’re on a zoom. It’s not coming in super clear. So just take a video with me for me on your phone, take pictures, and I think we’ll be okay.

If you could just do that in the picture, then we’ll get there. Okay, didn’t die earlier.

No, I didn’t get any pictures. I’ll text. I’ll text to John again. Just so you have my number. And I’ll email both of you this the spreadsheet that I was showing you and then you can send me what you need. Okay.

All right. Okay. If you want to make a list of everything that’s been new within the last five years,

Yeah, that’d be great too. If you could write that out. As much information is helpful to me because guys, if we do the cash flow, if we if we do the rental, I’m still going to need to bring a partner involved, just transparent.

No problem and bring it at least okay 500 You can bring in 500 a month in cash flow at that price.

Well, hey, I appreciate both of your time. Have a great Friday and look forward to working with


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