At AppleTree Group LLC we say we are more interested in the relationship than the transaction. The reason is that our services are not for everybody. In determining if our services are the best fit for a client we share our experiences. And often we learn new reasons how we can help people. The following is a true story based on a recent meeting with a potential client. As you read the story you’ll see that we were able to offer plenty of advice outside of the real estate transaction, and we learned a new reason why people may need to sell to an investor.
Why Sell to an Investor?
A young couple, Bob and Laura (not their real names), contacted me after doing a Google search. They were looking for an investor to buy their house. They wanted to move to a different part of the country to be closer to family. They have two small children, ages 1 and 4, and a fairly nice 3 bedroom, 2 bath house in a small community north of Portland, OR.
After reviewing the information they’d provided on our web page, I called to see if I could help. I asked why they just didn’t go to a realtor to sell the house in the traditional manner. They actually had talked to a realtor who told them the house was not financeable because it needed too much work. They were very open with me about what work was needed, and that they just couldn’t afford to make the repairs. Not being able to afford repairs is a very common reason for selling to an investor. They’d owned the house for 10 years so it was probable that they had enough equity to make a deal work. I scheduled a visit.
As we sat at their kitchen table I asked, “Why not just take out a home equity loan and fix the place?” Their response was that they had no credit. “Hmmmm, really?” That was new. Most young people can’t get a house without credit, so “How did you get the house?” I asked. They inherited it soon after they married. It needed a roof then and they’ve never had the money to fix it, much less make minor repairs or updates.
Without Credit You Are Invisible to the US Banking System
As a real estate investor I have to deal with credit all the time. Without credit you are invisible to the US banking industry. With two young children there will be plenty of times where Bob and Laura will need credit. I suggested they go to their bank and take out a small loan. Pay it back in a month or two. Then apply for several credit cards all at once and do the same thing with each of them.
Don’t spread out credit card requests over time, do them all within a few days. This will hurt your credit score initially. By making regular payments early, or at least on time, your score will come back up within six months or so. If you pay the loans back quickly it works even better. At a minimum, pay back all but about 30% of the available credit. (And, of course, keep making regular payments.) This strategy will get you a pretty good credit score within about six months.
They acknowledged that not having credit was proving to be a problem, and that they had just requested a credit card with their credit union. We continued talking and I noted that, at their young age, they should also learn how to invest. Investing brings serious returns when you invest wisely and have several decades for the investments to grow. I recommended BetterInvesting as a good source of educational materials and tools. Since 1951 www.betterinvesting.org has been helping people learn to successfully invest in stocks. Laura had actually heard of BetterInvesting.
We talked for an hour or more. In the end it seemed as though we might be able to make a deal they would be happy with. As I said my good-byes, Laura thanked me for the information I provided on how real estate investing worked, developing credit and how to invest in stocks. We had a very good interaction and I was ready to make them an offer on their house.
I Made a Fair Offer
A few days later I made Bob and Laura a fair offer. I learned that they’d sought another offer as well. And, while they really wanted to work with me, the other offer was a few thousand higher. I thanked them for their time. I told them I really enjoyed working with them and wished them good luck with the other investor.
A week or so later they contacted me again. The deal they had fell apart. The home inspection resulted in a revised offer that was lower than mine. But now their budget was committed to the higher offer. They’d made an offer on a house in another state. I told them that my original offer was still good but that I wouldn’t match the higher offer. I gave them some additional advice regarding use of a mortgage broker in their new city to help make their finances easier. After all, they would have enough money from the sale of the house to put down 60% or more equity on a new house.
How Real Estate Investors Help People
As we say at AppleTree Group LLC, the relationship is more important than the transaction. We truly mean that. We want to help people find the best deal for them and their particular situation. In doing so we find new reasons why some people should sell to an investor. And we are able to share our own hard fought experience with others.
If you are wondering whether you should sell to an investor
we would love to help you. Give us a call at (971) 246-7954 and we’ll be happy to see if we can help. Or check us out at www.appletreebuyshouses.com.
Fruit from the AppleTree.