Part 0: Small House, BIG PROFITS

The lead

Once upon a time, long long long ago (May 20, 2020… wow, look at that symmetry. I wonder if that has some cosmic meaning where the gods smile upon us and nothing goes wrong with this damn flip… yeah, right). Where was I… oh yeah.

Long long long ago (May 20, 2020), in a land far far far away (Windsor, CT), there was this dude minding his own business, and then suddenly… DINGGGGG… You got mail. I mean, you got LEAD. A brand-new lead from our website, We Buy Houses in Connecticut.

Don’t you love SEO leads? No ad bill, on autopilot, and they’re begging you to make them an offer. Yeah, we’re living the dream… till we close and we flip. Then the chaos starts. But we’ll leave that for later parts. Stick around.

Here’s the lead exactly as it came in. The only thing we touched: the seller’s name, email, phone and street address are blurred.

What jumped out at us

For those of you who aren’t just here to watch my butt jiggle as I walk by, and actually want to learn what we do and how we do it: here’s why psychoanalyzing every bit of info you get from a lead matters.

Keep in mind, when you rank #1 on Google, the lead floodgates open. You don’t really control how many leads you get… you just get a lot. So we have to be picky. I don’t have time to waste on a lead that isn’t all that motivated and would make us less money, when a truly motivated lead makes us a lot more. That’s why we really analyze the answers to the questions we strategically ask on our form.

Let’s break it down. Focus!

• “Owned 40 years” and “0 left on the mortgage.” No loan to pay off, so there was room for an as-is offer to work.
• “No - Vacant.” Nobody living there, and an empty house still costs the owner taxes and insurance every month.
• “Is the house listed? No.” No agent’s listing to compete with.
• “Have talked to a few realtors and gotten prices for traditional sales… looking to see what this option would offer.” They already knew what the house could sell for. So our offer was going head to head with the agents’ numbers. Game on.
• “Condition: Excellent.” Right above “flooring, paint, possible plumbing/electrical, landscaping.” Ha. We’d see about that.

Then the seller chased us

Speed to lead, my ass!

You know how all these damn gurus preach speed to lead? And how important it is?

OK, well, let me tell you. We SUCK. I really mean it: WE SUCK at follow-up and answering in a timely manner. Why do you think we developed Apex Vivus?! Duh. I hate following up, and now it does it for me, dammit! Boom! We have a reputation for missing emails, and sometimes for not responding until several weeks later. And not one single time has a seller given up on us. They keep emailing us, over and over. Do they get pissed and frustrated? Sure. Do they curse us out? Absolutely. Often they tell me to go back where I came from… and I’m not talking about my accent or my country. They mean it biologically. So rude!

Wait… I could have sworn I had a point telling you all this. Oh yeah… speed to lead. I’m not telling you to drag it out. Of course not. Answer quickly. But I promise you, when you’re dealing with true motivation and you have an awesome reputation, they will wait for you.

Why? Do you think they filled in the form to do ME a favor? NO, you nincompoop! THEY have a problem, and they want ME to fix it. Damn straight they wait. Sheeeeet!

Regardless… here’s what happened: his actual emails from the first five days. Are you paying attention?

See? “I never heard back from anyone yesterday.” He had other buyers circling, and he still chased us. Told you.

The seller’s situation

The house belonged to the seller’s late mother. He and his brother were the co-executors of her estate, and they were selling it. (We wrote a full guide on probate leads.)

And the “Excellent” condition from the form? The walkthrough told a very different story.

From lead to keys in about five weeks

1. May 20, 2020The lead comes in
   From a Google search, through the form on our website. Six minutes after our first message, the seller replies.
2. May 22 – 25, 2020The seller follows up
   He is talking to other buyers and wants to decide within days.
3. May 27, 2020We offer $71,000
   The seller tells us he has another offer, just above ours. We don’t raise it.
4. June 3, 2020We sign the contract
   At $71,000, as-is.
5. June 10, 2020The seller signs
   The deal is under contract.
6. End of June 2020Closing
   The seller’s attorney wanted to close on Friday, June 26. A few days later the house was ours, and the renovation was about to start.

We weren’t the highest offer, but we were the schmexiest people for sure

Here’s the part nobody expects. On May 27, our team sent us this update: the seller had a higher offer on the table, and we didn’t budge.

He signed with us anyway. Boom.

See, my little gringos, more often than not (yes, I’m serious) we don’t make the highest offer at all. We offer what works for us, and they can take it or leave it. Let me give you another example of what really happened. We once offered $11K on a house. Their own neighbor offered them $40K. They took our offer, and they had to bring money to the table to close with us.

I’m telling you. I’ve been teaching the 3 pillars of conversion for years now: competence, personality and credibility. Guess which one is the biggest, most important one? Yup. Personality.

You can be competent and credible, but if you’re a damn stinky, smelly douchebag, it doesn’t matter how credible you are. They will always try to find a reason not to work with you. On the other hand, if you don’t have proof that you buy houses, and so no credibility to show, but you’re just the most adorable, fun, funny, charming little bastard (like me)… it doesn’t matter that you lack credibility. They will always try to find a reason to work with you.

There you have it. #BeLikeJerryll

The contract

Want to see the real thing? Here’s the actual purchase contract, all five pages. The seller’s name, street address, initials and signature are blurred. Click a page to read it.

What the contract says, in plain English

• Price: $71,000. A $1,000 deposit when the contract was signed, and $70,000 at closing by bank or certified check.
• No mortgage contingency. The financing section was left blank: we weren’t waiting on a bank to approve a loan.
• As-is, and the seller could leave things behind. “Property being sold ‘as is’ condition and all items of personal property can remain on the property.” No repairs and no clean-out for the seller.
• Subject to probate. The sale depended on the estate getting a certificate from the Greater Windsor Probate Court releasing the liens.
• The refrigerator stayed with the seller. It was excluded from the sale.
• No agents. Both sides confirmed no real estate broker or agent was involved, so no commissions.
• Closing on or before June 24, 2020, or as both sides agreed.

The math that made it a go

We plan every flip backwards from what the house will sell for after the renovation. The plan going in:

We also wrote up how we estimate repairs, line by line.

Questions