LAST HOUSE IN THE BANK
We did a lot of lease options in Houston, Texas so we had a lot of people in houses that were rented from us. They had the option to purchase it at a set price. We took extra money every month from them and put into a special account for their down payment.
I received a phone call one day from one of these optionees. Her name was Sophie. She said that Alberto, her husband, had died, and she needed to buy another house. Not the one she had the lease option with. Now, Sophie and Alberto had always made their payments on time. They were great people. So I was really paying attention to what Sophie was saying.
I said, “Sophie, I have a few other houses for sale.” And I gave her the addresses. I also told her to drive buy and call me back to tell me which one she wanted.
She called back two days later, “No, none of those” she said. But she wanted to buy the house on Bunsell. I had purchased three or four houses on Bunsell in the last five or six years, but had sold each one. Sophie was convinced that there was a house on Bunsell, that I owned and that she wanted to buy it. So now I asked, “Sophie when is your next day off.” She told me. I told her that I would pick her up at her house and we would go look at every house, that I had for sale. There where some houses where I knew the renters were not making their payments. That might be a way to break the lease and sell a house to Sophie.
The day came, so we drove around for three to four hours looking at houses. Sophie saying each time: “No, I want the house on Bunsell.” Out of frustration I drove over to Bunsell and up to the house I thought she was describing and said to Sophie: “See, there are people living there, I don’t own it any more, I can’t sell it to you. Their car is in the drive way and their children’s toys are in the back yard you can see that.” Sophie put her hands on her hips. She was sitting in the front seat of my car and says, “No, not that house, this house.” And she points to the one on her right, not the one to our left. As I looked over at that house, I realized it was in shambles; it needed a lot of work. The grass was tall. The shrubs had not been tended to in quite a while, and there was a broken window. I said, “Sophie, I don’t own that house and I don’t even know who does.” She says, “It’s O.K. You buy it, you fix it up for Sophie and then I’ll buy it from you.” I said, “O.K., I’ll see what I can do
After I dropped Sophie at her house, I went home. I got on the computer to see if I could figure out who owned the house Sophie wanted to buy. It turned out that a bank owned it. So I was on the phone asking the bank, who could sign a deed. After six referrals of “let me give you to that department” I finally was talking to a man who said, “Yes, he had the authority to sign a deed to that house.”
Now came, the negotiation. I knew the price I could pay for that house. After fix it up I could still sell it to Sophie at an appraised value and make some money.
But I also knew that I like for the seller to give me a number that they have in mind, because my offer might not even come close. There is no sense trying to negotiate at that point. The man at the other end of the phone said, “What did I want to pay for the house?” I replied. “What do you want for it?” He said, “Are you one of those real estate investors who wants to write a book about this?” I confessed, “Yes, I was a real estate investor, and it could be written about some time.” Again, he said “So what do you want to give me for that house?”
I knew the number I had in mind, but because he was making me come up with the number, I came up with one that was ridiculously low.” He said, “Well, we will have to come up with some paperwork won’t we. I knew he was taking my, low offer. I immediately asked “So where are you located?”
I grabbed my briefcase that had paperwork in it, and went to his location immediately. I sat down in his office, which was plush, and drew up a contract. I said: “I would take it to the title company and I would be willing to close between four to five days, as soon as we got the title insurance.” He said, “That would be fine with me.” I couldn’t believe the deal we had just cut, all because Sophie wanted to buy that house.
The next day he called me up and said: “I made a mistake, I can’t sell you that house at that price, I forgot about closing costs. At that price I figured that I was paying all the closing costs. I really didn’t want to say that to him. I met with him one more time, saying: “Surely you have attorneys on retainer.” He said: “Yes.” I suggested: “Why don’t you have them draw up the deed and that won’t cost you anything.” He kind of settled down and said: “Yea, you’re right.” I said: “I’ll tell you what, you get the deed prepared and I’ll pay for the title insurance.” He was much relieved and said: “Yea, we can do the deal.” I got the deed preparation out of him, That part, I wasn’t even planning on.
Before I could close on the house, I called Sophie to let her know the good news. Sophie said when she told her neighbors that she was moving to Bunzel, they threw her a party. The reason she wanted to buy the house on Bunzel was because the house she was living at, Alberto would come when she was washing the dishes … (that his spirit would show up). She thought she needed to move. When the neighbors realized she was going to move, they gave her this huge going away party … and at that point she realized she didn’t want to move. She reasoned, why leave these neighbors she had, that were wonderful to her. She said, “Alberto said it was O.K. for her to stay there and that she should buy the house she was living in.” It made me feel good that she and Alberto were at peace with his passing.
So, I went over to the house I was buying just to sell to her … and it was in such a bad shape … and I had sold houses to people on that street … I wanted them to know that this one was going to be fixed. It would not be an eye sore very much longer. So I put a sign on a tree with my phone number on Tuesday. Stating the house was being repaired and would be for sale. Low and behold, on Thursday someone called who said they wanted to buy the house on Bunzel. The husband was a painter and the wife stayed at home. I took Marta, the wife through the house, showed her what we would be doing. I said, “Marta, I’m going to put a new kitchen counter top in this house. And I can put one of these three colors in. One of the colors I that I could choose from was a Verde Pompei, it’s a very nice green marble looking counter top.” She said, “She loved that idea, because she had copper pots and pans.” I said, “I’m going to put in a carpet and it’s going to be either a light brown or a light gray. Which do you like? She said, “Oh, I love gray carpet.” Marta was getting almost a brand new house … at least it was customized.
My wanting to help Sophie solved all sorts of problems. The bank that owned the house was in receivership. It only had two real estate assets. One being this house I bought. The other being a large commercial office building down town worth millions of dollars. By getting the house off their books, that allowed them to focus on the real big asset. Sophie realized how much she was loved by her neighbors. Marta and her husband moved into a house where she picked out most of the final touches. And I made money solving all these problems.