SSS #326: Introducing Project Brightwood 🏡

Livin' La Vida Luna y Luca

I try to get 3,000 steps in every morning before the kids wake up. Might need another walking pad because someone's getting out of bed a bit earlier than scheduled.

Introducing Project Brightwood 🏡

In the Real Estate Investing world of Direct-to-Seller Marketing, Asian homeowners are the toughest nut to crack.

From a numbers standpoint, Asians earn the highest annual income by race in America. They're hardly ever in any form of financial distress.

From a cultural standpoint, I'll go as far as saying Asians are masters of delayed gratification and extracting value. They're tough negotiators willing to walk away from a deal that doesn't check every single one of their boxes.

The sellers of Brightwood fit the bill to a tee. They were a sharp, yet lovely, elderly Taiwanese couple who valued convenience, candor, and respect above an incremental dollar.

Intangibles:

I'm convinced I got this deal because of the respect I showed them throughout the entire process.

I addressed the husband as Mr. Yxxx both in person and through written communication. Although I seldom spoke directly to the wife, I always referred to her as Mrs. Yxxx.

The first time I visited their home to assess the property, I took my shoes off before entering without being asked, bowed, and greeted them with "Ni Hao", which means "Hello" in Mandarin.

I complimented them as parents when I noticed the Princeton Tiger flag in their son's old bedroom. There's no higher form of success for an Asian parent than a well-educated child.

A common strategy while doing initial walk-throughs is to point out imperfections in the home. I didn't neg their home once. Instead, I applauded them for how well-maintained it looked after 20+ years of ownership.

I asked how they plan to stay busy in retirement and then offered an introduction to one of the leaders of TzuChi in NYC, a Taiwanese / Buddhist Foundation focused on providing disaster and medical relief around the world. That leader is my BiFF's mom.

Finally, when I presented them with my offer, I opened at $888,888.88. I knew it was below their $1M ask, but it was close enough to start the negotiation on auspicious grounds.

The Numbers:

The negotiation didn't last long. We were under contract about two weeks after I made the initial offer.

We landed at their asking price less the standard fees and commissions they would have incurred had they gone to market.

I also offered to cover their Attorney's Fees (up to $2,500), their Transfer Tax (up to $10,000), and their Relocation Costs (up to $2,500).

Acquisition Costs:

I'm not someone who puts much stock into Zestimates. But I'm also not above bragging about getting a house for damn near $300K below it either. 😂

Also worth mentioning, our total basis after all fees (which were quite hefty) is equal to the as-is appraised value of the property. Solid. 🤝

Cost To Build:

Total build cost will be right around $1M for this home with ~6,000sf of finished space.

Cost of Sale:

Assuming we don't break the $2.5M barrier, our total cost of sale will be ~$200,000.

After Repair Value:

We originally projected a sales price of $2.488M.

The appraisal came in at $2.625M.

We have verbal confirmation this 7-bed, 7-bath comp 2 blocks over is Under Contract at their asking price of $2.7M.

We also have verbal confirmation this 6-bed, 8-bath comp in a slightly inferior location is Under Contract just below their asking price of $2.695M.

What's Next?

We're closing on Thursday and submitting for construction permits on Friday / Monday.

Thankfully, we put this home under contract a few months ago, and we wasted no time getting our plans in order.

We'll hit the ground running and likely have this home sold by the end of 2026

🤞🏽&✌🏽