What Do We Look For in a Seller?

In 2006, Ryan and I, owned a condo in Beverly Hills Adjacent. It's a neighborhood in L.A. that didn't have enough personality on its own, so it just basked in the reflective glory of the neighborhood right next to it. 

At the time we both had jobs that would not afford us the ability to buy a cup of coffee in the neighboring neighborhood and yet...somehow we had no problem getting a $400,000 mortgage.  We knew others like us who had bought places they couldn't afford on adjustable rate mortgages and that this trend couldn't sustain itself.  I'm not saying we knew enough to short the market, but by spring we did know we wanted out ASAP. 

After meeting a few agents who couldn't find their butt if it was stapled to their hand, we met with someone who would serve as a mentor to us both, Paul.  Paul told us that based off the neighborhood's proximity to Beverly Hills and it's large Jewish population, our ideal buyer would either be someone in 90210 going through a divorce and needed a place right away or someone who had to be able to walk to the nearby synagogue on Saturdays.  Within a week Paul hit the daily double and found a rabbi who was splitting up with his wife.  

What we learned from that is whether buying or selling, it's to your advantage to find people who are either going through life events or constrained by existing factors.  It's guided us in our approach to finding our properties.  We look almost exclusively for off-market properties or sellers who are highly motivated.  Give me a Danny Glover landlord who is too old for this stuff, but too lazy to list any day of the week vs. the hot property with multiple bidders.

Not surprisingly this has become more difficult in this currently overheated market, but as Wayne Gretzky famously once said, "I never made a field goal, without getting the bat off my shoulder."

We have found that by spending the time to write more offers and dig deeper to find sellers who need to move their place we are still able to find value for our investors.  If Paul taught us anything, it is even in a tough market you can still find a rabbi divorcee.