Perhaps the most overworked excuse for not investing in real estate today is I’m waiting until I get enough money together to start! Money is not what you need more of – CREATIVE THINKING IS.

One of my favorite buying techniques over the years has been LEMONADE OFFERS. The name comes from lemonade ingredients -lemons and sugar. Lemons, of course, are anything besides cash! Some of the best deals I’ve made were done with nearly all lemons.

Matching Your Offer with the Property

Keep things in a proper relationship! What I mean is – don’t try this technique to purchase a premium “Grade A” apartment building. Owners of premium apartment buildings don’t need to accept your lemons! Don’t waste your time courting them!

Weak sellers, meaning their property is less marketable for many different reasons, will accept weak offers. Sometimes a property looks so disgusting and the tenants are so ugly that not one single buyer makes an offer to purchase.
When this happens, a seller becomes very discouraged, the ideal situation where lemonade offers work best! The seller Is In a serious bind and really needs to sell, anything you offer, within reason of course, will stand an excellent chance of being accepted.

Lemonade offers won’t work unless they are perceived by sellers to be a fair exchange for what they’re selling. Remember, value is in the eye of the seller too! You must always be careful to avoid insulting owners with ridiculous proposals; otherwise you won’t be taken seriously!

A Lemonade Plan that Worked

One property I acquired consisted of a rundown four-unit apartment and two junky houses, all situated on one large city lot. A local property manager was overseeing the units for an out-of-town owner. At the time I purchased the property, vacancies were quite high in my town. Only three of the units were rented. One reason was because the manager had allowed old junk cars and trash to accumulate creating a very unsightly mess. Because of the looks – it was difficult to attract decent tenants. When the owner finally showed up to see what was wrong, he fired the manager and immediately listed the property for sale. The asking price was $120,000 with $20,000 cash down payment.
Here’s the’ offer I presented, which was slightly modified before being accepted!

TOTAL PURCHASE PRICE $105,000
DOWN PAYMEHT TO BE $20,000 CONSISTING OF THE FOLLOWING COMBINATION OF CASH ANO PERSONAL PROPERTY!
$4,500 Cash
4,000 1968 Barracuda 318 engine
1,500 1981 Suzuki SS1100 low mileage
7500 Self-contained ’71 Winnebago, 60K mi.
1550 E250O Honda generator, used 15 hours
950 Cherrywood hutch, beautiful condition
$20,000 total down payment

The real key to making this deal work was – HIGH SELLER MOTIVATIONI To my knowledge there were no other offers on the property. I also learned the seller was seriously strapped for cash. With just three units rented, he was barely collecting enough rents to pay the mortgage payments. Management fees and maintenance expenses were costing him out-of pocket cash every month! Living out of town with a regular job to attend made it impossible for the owner to help himself. Selling the property was the only logical choice!