Throughout my life, I've always wondered how people negotiate really cheap and free houses. What special advantage did they have that I did not? As it turns out, they were good negotiators and willing to do a lot of renovations to make the property habitable.
Not Move-In Ready
None of their houses were move-in ready. I saw the properties years later after many of them had completed extensive renovations and added new heaters, air conditioners, roofs, paint and flooring, and what they hadn't fixed was covered up by decor and well-placed furniture.
In order to duplicate what they had accomplished, I needed to ask myself what types of repairs I could accomplish on my own, and I needed to decide what absolutely had to be in the house.
- Roofing Must Be Sound
Subfloors Must Be Sound
Electrical Wiring Must Be In Good Condition
Pipes Must Be In Good Condition
Must Have Furnace Or A/C Depending On Season
Must Have At Least One Working Bathroom
Things I Can Accomplish
Needs A Professional
- Furnace, A/C And Water Heater Checks
After I created my lists, I needed to come up with a maximum and a minimum price range. I called a relative to see if I could borrow some money to buy a house. My relative agreed to loan me $3,000 for six months. I figured I could afford up to $5,000 if I could get financing.
Finding The House
With my low price range, I knew I was going to have to look at mobile homes. A traditional house in a decent neighborhood was not going to be possible with a $5,000 limit. I decided to look at the website of a large mobile home park 10 minutes from my current residence. I'd been in that park before, and I knew that it was well-maintained and contained two swimming pools.
I sorted the listed from low to high. The first mobile home was a handy-man special for $2,995. The second mobile home was $4,995. I called the office and told them I wanted to view the $2,995 single-wide mobile home.
The $2,995 mobile home was a victim of previous renter anger. Hammers had been used 90 percent of the drywall, and it needed flooring. Unfortunately, it was pending, so I agreed to look at the move-in ready $4,995 home. It was move-in ready, but I had to apply for financing.
The financing came back denied due to my income versus debt ratio. I wasn't surprised, but I was determined to get that house. It was slated for a new air conditioner so I attempted to negotiate the price down to $3,000 without the new A/C unit. There was no negotiating. The mobile home had just been discounted by more than $3,000.
However, a $1,500 double-wide had just come available. The previous owners had turned it over in lieu of lot rent. It needed flooring, appliances and a bathtub. Those were all fixable. Then, I took a look at the master bathroom. The previous owners had left a skylight to leak for months. It was now a soggy mess. I can't roof a house, so I called my brother.
At the same time, I was negotiating with the property manager. He told me the lot rent would be $424 a month since this was a cheap fixer-upper. I disagreed with the lot rent. I wanted $199 lot rent for the first year. It needed a roof. He offered to sell it to me for $500 and a free month of $424 lot rent. I countered with $500 and two months free lot rent. He countered with free and one month free lot rent. I agreed with the stipulation that my brother had to look at the roof first. If he couldn't fix it, I wasn't taking it.
My brother looked through the house and decided that it was worth buying for free and two months free lot rent. The manager countered with free, two months free lot rent and six months of lot rent up front. I agreed. I had successfully negotiated my way into a free 1,500 square foot free home.
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- Real Estate