Livin' La Vida Luna y Luca
Wishing we were back in Cape May this weekend.
Project Weston
This story is a classic 1+1=3 situation that dates back to the beginning of 2024.
My good friend, Mike, is the king of building rapport.
I, on the other hand, have an eye for distress and a knack for getting people over the hump.
Seeing these skills in each other, we decided to team up and combine efforts.
Back in January of '24, I drove our target market 2 days per week for about 4 weeks.
I tagged every house I liked and sent the list to Mike.
Mike sent them all a "We Buy Houses for Cash" postcard and the phone started ringing shortly thereafter.
The current owners of Project Weston are retiring next month and making their way south.
Our timing couldn't be more perfect.
The first time they invited us into their home, we quickly inspected the basement and surveyed the land. We didn't talk numbers at all. We focused on finding common ground and uncovering what was important to them regarding the sale.
The second time they invited us into their home, we sat at their dining table for about an hour. We took a sandwiched approach to making our offer. We spent the first 20 minutes expanding on common ground. Then we spent no more than 5 minutes presenting our offer in writing with data to support our number. We wrapped with another 20-30 minutes of common ground and why we're the right buyers for them to work with.
They countered us over the phone a few days later. We asked for another sit-down and the third time was a charm. We presented a new offer that was MORE than they asked for. Yes. You read that correctly.
We went underrated Sly Stallone: Over The Top.
We went over their counter for 2 reasons:
- There was a competing bid. We didn't want them to take our offer back to the other party. We thought going above and beyond their counter would entice them to reciprocate. It worked.
- The seller lived in town his whole life. He is entrenched in the community. We were very clear about our intentions. "We're paying you a premium in hopes that you introduce us to anyone else in town who might be looking to sell their home." He's since introduced us to 3 separate parties.
We believe they immediately accepted our offer for 3 reasons:
- Price was good
- Terms were better. We offered an as-is purchase on their timeline with a 30-day use and occupancy agreement (they'll stay in the home 30 days after the sale for free).
- They liked us as people. I mean, how could you not? 😜 Seller repeatedly said, "For some reason, I just trust you guys." I can't speak for Mike, but that's literally the highest compliment I can receive.
The Numbers:
Let's quickly run through the numbers here.
We'll start with three buckets of expenses and end with our expected After Repair Value.
Cost to Buy:
Our purchase price is $805K. After closing costs, prepaids, and fees, we'll be all in for just under $850K.
Cost to Build:
This project is right down the fairway for us. We've done it 3x before and we're about to start another one (Project Fairmount) in a week or two.
We'll spend ~$750K including carry.
Cost to Sell:
Between commissions, closing costs & assoc. fees, we'll spend just over $120K on the sale.
After Repair Value
- 1.950M - Conservative
- 1.995M - Base Case
- 2.05M - Aggressive
Comps
Our comps speak for themselves. This home will have the same footprint as Project Washington with a much better floorplan.
What's Next?
Our closing date is scheduled for December 30th.
We are submitting our plans to the town by the end of November. They should approve us no later than mid-Jan.
At this point, we're just looking for better financing options. We have our go-to hard money lender ready to fund this deal, but if we can find better terms, we're happy to work with someone new.
Speaking of financing...
Get Involved! 💰
The cash requirement to fund this deal is ~$500K.
I'm keeping half of it for myself and looking for a private money lender to take the other half.
As always, if you're interested in participating, please shoot me a text, reply to this email, or schedule a call with me by clicking here.
