This post is directed toward the 30 people (3 groups of 10) who sat my round table discussion last Friday night in St. Louis.

I told them I would be re-starting my Handyman Ad on Sunday (yesterday) for 7 days and they asked me to give them a follow-up on any of the calls that I may get.

I knew I would get calls on Memorial Day and the first one came about 2 hours ago. An 85 year old lady from another state (GA) called and said she has a house in my town that has been vacant for 6 months. It needs work which is nothing new. It is a 3/1 located in a Class C+ neighborhood (I saw it on Google).

Now, her asking price is $60,000 which is way out of my price range but I did not tell her that. I know the neighborhood this house is in and in my opinion, $25,000 would be a more reasonable asking price. Most elderly home sellers based their asking prices on what they need to retire on,...not what the house is actually worth.

I am going to 'play along with this one' just for the fun of it but I know from past experience that getting elderly sellers to think in terms of true market value instead of their own personal retirements needs can be an uphill battle.

Roy first of all thanks for doing the round table. It was very informative, and helpful.

I was hoping to get to your table. Never even made it to that end of the room. I couldn't even get to Brad's table. Wish there had been more time.

I LOVE it when a sellers says OR their realtor says:

They need money for their new home...

They need money for their retirement...

They need money for their __________...

DannyC,

Just got back from seeing the outside only of this house. I took photos of it and yes, it needs some work but nothing major. Now, I need to see the inside but my seller lives 130 miles away in Georgia.

If the owner of this house would drop the asking price down to $35K AND owner-finance this house with me putting 20% down, that 'could be a deal',...but again, I need to convince the seller her house not worth anywhere near $60K.

David,

In the 'RE Wanted' section of my local hometown newspaper, the Ad says,..

Retired Handyman is Looking to Buy a Fixer Upper. Prefer small houses. Can pay cash or will discuss terms with my down payment. No agents please. Call 256-442-xxxx

Roy,

You da MAN!!

It was so exciting to see you leading a roundtable with a crowd flocked around you! You are a natural. Everybody LOVES you!

Whenever someone calls via the Handyman Ad,...I make it a point not to discuss money on that first phone call. In this case, the seller volunteered the asking price.

Tuesday

I talked with the out of town seller this morning. She is driving over on Friday to open the house for me. After I do an inside inspection, I will make a decision then if this house (or seller) is worth the effort in trying to advance to the next level,...which is 'creating the deal'.

Whenever I meet a seller for the first time, I sometimes get asked "Are you really a handyman?" My stock answer to that question is my favorite analogy.

There are 'shade tree' auto mechanics in my town who buy cars at auto auctions, pay $500.00 for them and usually have them towed home since they don't run. They spend 3-6 months buying spare parts trying to fix that car. If they get the car to run more than 5 miles, they will sell that car and then go buy another to fix.

My Ad has been running for 3 days and I have had 6 calls so far. I have rejected 5 of these sellers for personal reasons that would not bother other investors.

I sure wish NE (PA) was down here so that I could hand over all of my rejects to him.

I will not buy any house that has a below grade basement.

I will not buy a house that sits on top of a steep hill.

I will not buy a 1 bedroom house

I will not buy a house that is within 6 blocks of a downtown housing project.

Do I need to continue? LOL

NE,

With other investors who I consider 'friends', I operate on the premise that "what goes around, comes around".

I live in a house on a hill. I checked the hill to make sure it will stay there, as long as we live here anyway. :) Since we don't get earthquakes and it hasn't rained here in a year there isn't much to worry about. If California will please sink into the sea I'll be in a great spot to build a boat dock. :)

The nice thing about living on top of a hill (besides the view) is no floods. And if the sewer pumps in town ever fail, well, "--it" runs downhill. :)

"Why don't you want a below grade basement?"

I could make a separate post on why I reject certain houses, but I will try give a primer here. Just like a good Landlord will reject certain rental applicants, I reject houses that do not meet my minimum standards. Yes, I have min. standards when I go shopping for a house to buy. I will not buy a house just because of a cheap price which seems to be the only standard for most flippers. Price is very important to me, but again, other things are involved in my house selection decision.

As you know, I have always been a 'buy and hold' type investor,...it just my mindset (or comfort zone). Knowing that I going to hold a house for several years, I want a house that will be low maintenance, will rent quickly, and attract the type of tenants I want.

This is usually a 1,200 sq. ft house or less, is either a 3/1 or 2/1, located on the EAST SIDE of the river which is in the PATH of NEW DEVELOPMENT here (hint, hint), has a relatively flat lot (no steep lots on steep hills), and a mixed race neighborhood.

Why no below grade basements? Only a few houses here have below grade basements. The ones I have looked at all had 6-12 inches of water on the floor when the sump pump died. One phone call I do not want from a tenant is this,...'our basement is flooded and what are you going to do about it'? How do YOU answer that question?

'could you print your first contact questionnaire list please'

I can't because it is not written down,..however, one question I do ask is,...'do you owe any money (mortgage) on this house? If they do and they are upside down, there is nothing I can do for them. I rejected one of these just yesterday. However, most of the people I talk with have 'free and clear' properties which makes the negotiation process much less stressful for them. I do not want to deal with a stressed out seller.

NE,

I have always taken an ultra conservative approach to what I do here in the RE business. My reasons are more personal than anything else. One reason, among many, is that at my age I can't afford to make the stupid investing mistakes that I made 25 years ago when mutual funds/IRA's were 'hot'. Back then, time was on my side and I had time to recover from those mistakes,...now I don't. Every decision I make now has to based on what I know and what I do best which is 'buy cheap, rehab cheap and get the highest rents this town will allow'. When you have a game plan that works, you just keep doing the same thing over and over.

On the flip side (pun intended), I have seen way too many investors lose their shirts trying to flip houses in my town,...this is a town where everyone wants to pay rent and not buy. We have a graveyard here where all of the house flippers from the 2008 RE crash are buried (I'm kidding, but I know where bodies are buried).

Danno,

Come here and I will show you houses with flooded basements. How the water got there and why it won't drain out is something I don't understand and don't have the patience to even try to understand it.

Plus, even with a dry basement, tenants store all kinds of JUNK down there and when they vacate, they leave most of it. This means I would have to hire someone to move all of their worthless junk upstairs and out the door. I would rather they store their junk in a garage or backyard shed than a below grade basement.

Comfort Zone!!!

Roy has a comfort zone of buy cheap, repair it, rent it, hold it.

NE of PA and Ken of NY has a comfort zone of buy cheap, and flip it. There may be a few keepers for rentals and holds along the way. But your comfort zone is flip and move on to the next deal. Making a lot of money in the process.

2008 RE crash was a crazy market prior to the crash. In FL making $100k under 6 months was the norm and money was made.

Unfortunately many investors lost their shirts as well as homeowners too due to the subprime lending fiasco.

RISK vs REWARDS; There are some LL's on this site that have a ton of equity in their properties but do not want to take the risk to the next level stepping out of their comfort zone.

Perfection is a great quality but some want the house to be perfect and will spend the money to get a higher rent. Did they over improve the property to get the higher value, DEPENDS.

Depends on their market and what the market will bear.

CASH FOR KEYS is a great option to get problem tenants out of a property. HOWEVER there are some LL's that will NEVER pay a tenant to leave but will spend a ton of money and court costs to get a deadbeat out. it would have been cheaper and faster to pay the deadbeat to move. COMFORT ZONE!!!

Tom (FL)

I know people who keep 6 figures of cash sitting in a bank vault earning 1.5% interest, before taxes. That is their Comfort Zone.

I also know investors who have millions in leveraged RE that does not produce much income (land, vacation property, etc). They have to have a day job just to buy groceries.

Ken,

I know you and I would make a good team.

When you referred to choices at your age, it reminded me of a phrase I began to use in 2017.

Balanced Decisions.

I apply this thinking to small decision that involve not only days of my time but hours as well.

The last six months has been scrutinized by balanced decisions and it is working well.

Meanwhile, I have a bunch of shacks with no basements, flat lots, no sidewalks...kind of a cool feature, 5/12 pitch roofs. The ridge of any house is 14' or less off the ground. You can walk on all the roofs.

These are easy houses.

However you can't sink a lot of money into them because you will not sell them and recoup you invested funds. What I do is do high end improvements on a good budget and rent them for the long term.

Same amount of work applied to houses in a bigger city would yield great returns on a flip.

I wrote all that out because I talk about these experiences with sellers. It boils down to, "I would like to help, I would like to buy the house however I'm limited. I can only offer this much or the whole idea doesn't work out".

(I also try to hire on local people as helpers - spend as much money in town as compared to bringing in materials and people. I fail at buying materials in town, but win at hiring local)

Blue,

Why do you love 1 bedroom houses? Who would rent (or buy) a 1 bedroom house,..besides you?

We have houses w basements here in Colorado, but I also avoid houses in flood planes.

'and your prices are so different than here!'