Lecture Notes on Transcript: Property Sales and Negotiations

Introduction

• Discussion between RJ Bates and a property owner regarding potential sale of a property.
• RJ Bates is a real estate investor and the owner of Titanium Investments based in Fort Worth, Texas.
• The focus is on buying properties across the country, especially those needing work.

Property Overview

• Location: Cross Plains, Texas.
• Property Details:
  • Two-bedroom, one-bath, approximately 930 square feet.
  • Includes a good-sized shop and the property is fully fenced.
  • House in good condition but needs flooring in the living room.
  • Air conditioning not working; currently using a window unit.

Seller's Situation

• Seller inherited the property from her deceased husband.
• The property is in her name after going through probate.
• She needs to sell to pay off medical bills and for repairs on her current residence.

Initial Sale Attempts

• Initially listed with a real estate agent for $95,000.
• Previous offer fell through; new offer from a buyer at $38,000, which was not acceptable.
• The property was listed on Zillow by an agent named Nick Walker.
• Another agent, Mo, was involved but could only offer $38,000 claiming no demand.

Current Offer and Negotiations

• RJ Bates discusses the possibility of wholesaling the property.
• Explains the concept of wholesaling and novation to the seller:
  • Wholesaling: Buyer tries to find an end buyer who pays more than the offer price.
  • Novation: An agreement to sell at a set price while finding a buyer willing to pay more.
• RJ suggests a potential offer of $75,000, aiming to sell it for more to cover costs and make a profit.

Market Analysis

• RJ has over 145,000 buyers in the Callahan County area but none directly in Cross Plains.
• No previous transactions by RJ in Cross Plains, making it a less familiar market.
• Strategy involves leveraging existing buyer networks and marketing.

Action Plan

• Seller needs to cancel the current contract with Mo.
• RJ will send a contract to the seller for $75,000.
• The goal is to market the property starting Monday after the July 4th weekend.
• Transparency and open communication with the seller throughout the process.
• Plan to gauge buyer interest in the coming week.

Conclusion

• RJ's approach focuses on solving the seller's need by leveraging his extensive buyer network.
• Emphasizes transparency and clear communication to establish trust and set realistic expectations.

Key Points to Remember

• Importance of verifying current contracts and ensuring clear title before proceeding.
• Wholesale and novation strategies as tools for real estate investors.
• Challenges of working in a less familiar market and strategies to overcome them.
• The role of transparency in building trust with sellers and achieving successful deals.