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Patience in property investment is a virtue
Paul K. Carder
You can never fail if you never give up.
It s interesting that you can find a lesson in any situation if you look hard enough.
I recently purchased this property in Kent but it took me 9 months to buy it.
Now an issue I find with a lot of investors I come across is that they sometimes get too impatient and land up losing or giving up on deals far too quickly.
Those of you who read my articles regularly will know that I look at the Circumstances first then the Timing and then some sort of Leverage.
When I first spotted this property it was on the market for 130,000 having recently been reduced from 150,000. This got me thinking; this was a big reduction, these properties normally sell for 160,000- 170,000 and so it seemed cheap. It appeared to be a repossession and I deduced this from the internal photos as the bath taps had yellow and black tape around them.
Also the property bee tool revealed that it had been on the market for 3 months and that s a long time for a repo in the South East area. Additionally there had been many sales agreed and then relisted so I knew there could be a problem.
So detective Ribbons came out and made an appointment without asking too many question to start with.
Once at the property it was apparent that there was a structural issue with the property next door and it was affecting this property. It had cracks appearing around the front bedroom window; I thought this would be hard to get past a surveyor and this is when I started my line of questioning.
If you ask an agent a direct question they have to tell you the truth. So I asked if there had been any problems with anyone getting a mortgage because of the cracks, the answer was YES. Good start. I asked how many buyers had fallen through and the answer was 3.
I now had my leverage. So I offered 100,000 and the agent put it forward and came back within 10 minutes and said definitely NO. The main issue was that it had only been on the market for 3 months and had been priced by the lenders to take into account the structural problem and so they would not take my bid.
Oh darn, let s leave it and move on to the next one . NOT ON YOUR NELLY. Me leaving a deal like this on the table without at least a real fight, no chance.
A plan of action was required and so I put the property into my filing system and began to ring the agent every fortnight.
Now if you keep calling agents about the same house 1 or 2 things will happen. You will either build such a good relationship with them it will be great in the long-term or you will simply p*** them off.
I got on really well with this agent and I know I m one of the luckiest so and so s who walks this earth.
I was once told by one of my mentors that
Luck is when opportunity meets preparedness
and for what was about to happen I was prepared. The agent let me know that the asset management company (AMC) was very rude and putting pressure on him to find a buyer. His company was not entertaining mortgage buyers on this house because they did not want the hassle, so he advised them to take offers from cash buyers, the asset company said NO we want 130,000 as there is a higher mortgage already on this house and they need all of this to clear it.
I was regularly putting my offer forward in readiness of them accepting it because my belief was that I would be doing this deal, I could smell it.
I have a rule, which is, never rely on what you are told ; and I m a very patient man.
After 9 months and many offers later we had a breakthrough.
The woman who was dealing with the property at the AMC resigned and the new person was out to impress and clear the decks. I got the agent to represent my offer with photographs and copies of the old buyers surveys and the new member of staff could see the issue and hey presto after 9 months we agreed the property at 100,000.
Interestingly enough I met an investor at a network meeting who had experience in structural issues and he bought it from us at 120,000 cash and we did not even have to complete. How cool is that?
Paul RibbonsProperty investment expert Author of Hustle your way to property successhttp://paulribbons.com