SSS #230: Shout Louder 📣

We have 2 under 4 and cannot imagine adding a 3rd to the mix anytime soon.

I know I will regret this. So hard to balance these two truths.

☀️

Livin' La Vida Luna y Luca

This is my happy place. 😊

Shout Louder

An old friend (10+ years) walked into the locker room as I was getting ready to leave the gym.

"How'd that closing on Hillside go?" he asked.

"Great! We should be taking the house down in the next couple of weeks. Maybe I'll stop by your place for a coffee next time I'm in the area!"

"We'd love that. Anytime!" he replied.

"Maybe you can tell me which one of your neighbors is getting ready to sell their home". I said half-jokingly.

"Well actually, we're just about ready to list my dad's house for sale. His house is the one next to mine."

🤯

"Did you sign with an agent yet?" I asked, trying not to show my hand.

"We just finished interviews. We'll pick one in the next week or so."

"Can I make an offer before you sign anything?"

"Sure".

I raced home, ran the numbers, and had a letter of intent in his inbox by the time his gym class was over. #SpeedToLead 🏃‍♂️

The Offer

My offer was $825K (net to seller). I was more than ready to pay the seller's closing costs on top of the purchase price.

Unfortunately - the offer was not good enough. 😢

I spoke to the seller the next day and he let me down gently. I asked for a counter, but there was none.

He said a recently sold comp went for $999K and it was too big of a spread to give up. I verified his data and came to the same conclusion.

But I went back to the drawing board, anyway.

The only thing I hate more than negotiating against myself is losing a deal.

So I increased my offer the very next day.

I bumped up ~$40K to $866K, all else remained the same.

Seller thinks he can achieve $999K. I don't disagree.

Although my offer was $866,250 + closing costs, the actual on-market value is closer to ~$925K.

Here's how the math shakes out assuming he goes to market:

+$925K Offer
-$46.25K (5% Commission)
-$9.25K (1% Transfer Fee)
-$2K (Legal)
=$866K (my offer)

Rejected. Again. 😭

Takeaways:

I could have offered more according to my analysis, but my business partner was adamant about not going above $850K. If my offer was accepted, I planned on asking for forgiveness 🤷‍♂️ .

The thing that bothers me most about this situation is I found out about this opportunity through happenstance. If I had left the gym a minute earlier that day, the conversation never would have happened.

This friend KNOWS what I do for a living. They KNOW I have a project down the street. So WHY didn't they come to me before interviewing agents?

Please don't misunderstand. I don't feel like they "owe" me anything. Mostly I feel like I'm not doing a good enough job putting myself out there.

I should be shouting from the rooftops... Yelling in the face of anyone willing to listen... "I AM A REAL ESTATE DEVELOPER!!!"

If you have a property you're looking to sell, please let me know. The uglier it is the better. Mold in the basement? I want it. Asbestos in the siding? I love it. Gremlins in the attic? Cha-ching.

For real, though. This is my buy box:

• Homes at the end of their useful life.
  • 30+ years old build
  • original owners, even better
  • lots of deferred maintenance
• Upper quartile ($/SF) of Morris, Union, & Essex County.
  • Morris: Chatham, Madison, Florham Park
  • Union: Summit, New Providence, Westfield
  • Essex: Short Hills, Millburn, Livingston
• Purchase Price: $500K-$1M
• New Construction Preferred. Addition + Renovation are OK too.
• By-right build needs to allow for ~3K sf of floor area or more

So yeah, if you (or someone you know) has something like that. Please LMK 🙏