In real estate, not every property is perfect. Many come with issues, problems, or a bit of "baggage." And honestly, that's often why they end up in our hands instead of being listed by the seller. But here's an important lesson I recently learned—don’t always walk away from a deal just because something about the property isn't ideal.
I recently funded a deal where we purchased a property for $18,000 and sold it for $50,000, getting the full listing price. Initially, I almost passed on the deal because the neighboring lot was littered with garbage and debris. But I didn’t, and here's what I learned from that experience:
1. Trust Your Gut
On paper, this deal didn’t seem like a winner. The nearby eyesore almost had me running the other way. But my instincts told me to give it another look. If your gut tells you something is worth pursuing, even when logic says otherwise, sometimes you just have to trust it.
2. Seller Financing Can Be a Lifesaver
Not every buyer is ready to pay cash, especially for properties with some negative traits. But seller financing is a great option in these situations, especially when you’ve secured the land at a great price. For this property, I knew the area well and was confident we could seller finance it with no issues if needed. Always have alternative selling strategies ready.
3. One Man’s Trash is Another Man’s Treasure
The property had two old, unlivable mobile homes, which initially seemed like a liability. But in reality, they ended up being an asset. Those old structures provided proof of utilities and the possibility of living on the land, making the property more desirable than it looked at first glance.
4. Don’t Be Afraid to Seek Advice
When you’re unsure, reach out to colleagues or friends in the business. A fresh set of eyes can often give you a perspective you didn’t consider. In this case, advice from a colleague helped me see the potential in this deal, despite the negatives.
The bottom line is: not every property is pristine, but that doesn’t mean it’s not profitable. Don’t kill a deal just because it has a flaw or two. With a little creativity and persistence, what seems like a problem can turn into an opportunity.
Thank you,
Dan Caradonna