Hey gang, welcome back Kris Krohn here on Limitless TV. Today we are talking about
the questions that I keep getting from so many of you like, "dude, why would someone
sell you a house for a $110,000 that you claim is worth
a $150 grand? Why is there that huge disparagement?" I'm going to answer that
today.
Alright, so today's question comes from John. He says, "this is a new question. I've
seen the point of buying a house that you'll instantly have equity in several
times in your videos. If the house is worth 150 grand,
why would someone sell it for a $110,00?"
John, this is such a good question. And by the way, the fact that you have this
question is part of the reason why this market exists. We're talking about
information that is not common place. I'm telling you that right now in your
market, in your backyard. I'm talking to you. Right now in your market, in your
backyard, there is someone that is going to sell a house for a lot less than it's
actually worth. And then John has this great question why? Why would anybody do
that? Well, let me give you a couple of reasons. But first let me tell you the
story of my first house because John is referencing how I bought my first house
for a $110,000 that was worth a $150,000. First
of all, that couple that lived in that house, they were on unemployment. It
looked like from what I could gather for a number of years.
Right now the husband used to work at the steel mill. The steel mill actually a
Geneva steel got shut down. He lost his job and I don't really know more of the
history than that. I knock on the door. What I know, is that they want a $110,000
for it. I want to buy it for a $110,000
and the deal goes down. I will tell you that I knocked on the door and
I actually asked the lady if she'd sell it for a 110. It was my first
house. I had no flippin idea how to actually negotiate or do any of that
stuff and when I offered a $100,000 for it, she
immediately bit back. No! It's a $110,000. I'm like okay.
Well later that day, I left and talked to my mentor and had him run numbers and
that's where he said dude this thing is worth 150 grand. And so I went back to
the lady, I got it under contract and I went forward to buy it. Do I know why
this lady sold it for a $110,000? I don't. But I can give
you a couple of guesses. Number 1 - she may not have actually known that it was
worth a $150,000.
Number 2 - maybe she needed to flee the state, leave the state, move on. Maybe she
owed 50,000 and to her selling it quickly for a $110,000,
was $60,000 of profit and that was sufficient for her. Or the house
needed some repairs. It needed some fix up. So she might have looked at the fact
that they had smoked in the house and that it stunk and that the carpet you
were placing and it need painting and maybe in her mind it's like, "oh, we need to sell
this at a discount because it's a crappy home and I'm not going to put a dollar into
it. So we'll sell it under value. Bottom line is this lady is not a sophisticated
investor. So maybe in her mind, she was a pessimist and a skeptic. Listen up right
now. A pessimist and a skeptic and says, "this thing is probably only worth a
120,000 anyway. Someone's going to have to put in $10,000
worth of work. I'll sell for a 110 that's the deal.
Guys, real estate is all about perception and it's about a collective perception.
But individually on a bell curve, you're going to have most people thinking
accurately and then you're going to have people and the outliers that think differently.
Those people exist. Now what are some of the other reasons why someone might sell
an undervalued home? Here's a common one. Every day people die. So someone dies and
they leave their house to their kids and there's four kids and they're fighting
over the house. All they want to do is sell the house and split the proceeds.
Well, who's going to put in the money to fix it up? Not one of them wants to do it.
They're in this deal because someone died. They're not investors. So
all of a sudden, it's like, "well, dude how do we get a quick sale out of the scene?
listen it's worth 200, let's sell it for 150 and get this thing done! With mom and
dad owe nothing on it. We'll each get $40,000 and 35 grand is our cut, good to
go, right? That happens all day long. Maybe someone's getting a divorce, maybe the
market is slow and they figure they need to list it lower to move it faster. But
they underestimate it. The bottom line is, that there's 10% of your homes
that are in your market, where people are not getting advice from a realtor.
They're not educating themselves on what something is worth. They're going to rely on
what they think it's worth. And some people by the way on the opposite end of
the spectrum, like my neighbor right next door. Dude that house is worth 800 grand. He
had a list for 1.3 million dollars right? It's not going to go down. But dude, it's
a free country. He can sell for whatever he wants. So when I tell you, you watch
this video, "Oh Kris bought this for 110,000 worth 150" Dude, I get comments.
Read up. "Dude, that's such a scam. He's a liar. Dude,
there's only one of those deals that will ever exist."
That's skepticism. I see in those comments is exactly why this exists. You
don't have to believe it. There's enough of you that don't, that it creates an
opportunity for the rest of us. My advice get smart, get educated, believe me this
stuff exists. You just got to know how to find it. Thank you so much for watching
this video. I hope that was useful for you. In fact will you do me a favor? If
you know of anybody or you yourself ever got your hands on a real estate deal
that you got undervalue or even a car undervalue, freak anything you've ever
gotten undervalue, will you post that in the comments below so we can light it up
and see how big a list we can make showing that people get undervalued crap
all day long and if it ends up with crap it's going to happen in real estate too. And
listen, if you really want the inside scoop on how to find the very best deals
out there, that don't even require your money or credit, I can show you exactly
how to do that. All you got to do is hike on over to my website, go ahead and click
the link or in the description below and check out a webinar where I've got all
the information listed on how I can help you do the exact same thing.