Buyer STOLE $40,000 From Me! | Wholesaling Real Estate
March 25, 2022
This buyer actually stole $40,000 from us. Hey, what's up, guys? My name is Graylan Stewart. Thank you for joining me today. I am a virtual wholesaler and real estate entrepreneur, so my channel is all about wholesaling real estate. But we also do buy and holds for long term wealth and some fixing flips for the bigger paychecks. So today's video I'm about to tell you about how this buyer actually stole $40,000 from us. Okay. So this happened actually last week or so, so in the month of March 2022. So here's what happened. This was a deal that came in through a radio lead. K Radio is one of our best advertising avenues that we do on a consistent basis. Okay. So this came in as a radio lead and we do this marketing in Oklahoma City metro, which when you consider the Metro, it's really the DMA, which is all the metro and surrounding communities kind of spread out pretty far. So it's a little further out than we would like, but it's the only way you can advertise on radio and TV. So this was a radio lead that came in as a normal lead. One of my acquisition managers took the lead, you know, kind of talk to them for a little while. And this actually might have been one of the rare occasions where we got a one call closed, which is super rare in this industry, at least, because you've got to you've got to remember people are making one of the biggest decisions of their life when they sell their house or property to us, because most people only do that maybe one or two times in their lifetime as far as the people that we deal with, especially.
So this came in in a little small town in Oklahoma, K nowhere near Oklahoma City area. So it's a small town that I've never even been to, most people have never even heard of, but it was a property that was a distressed owner. Obviously they wanted to move, get out of that business and move out of state and just kind of start over with their life. Right. So this happened to be a motel. So this property, you may have seen a short video that I did, how we were going to make $80,000 on this deal. Okay. So this is this is this video, right? This is the same actual deal that I'm talking about. So this property came in. It was a smoking do you know, we basically it looks like because I read over the you know, the notes and everything from my acquisition manager, it looks like we actually paid what they were asking because it was a good deal. Now, how do you evaluate a motel? I have no idea. How did my acquisition manager do it? She had no idea either. So let's she actually did get my opinion on it. And I was like, hey, it sounds like we can't lose at the price that they're asking.
So we got the deal for 120 grand, right? So if you think about this, a motel, it has 20 units plus the owner's suite, which is like a three bed, four bath house within the hotel itself. So technically, there's 21 units, right? So if you do the math on that, 120 is like it's a no brainer. You can't lose on that deal no matter what type of condition it's in. Right. And it was actually in pretty good condition. I'm going to do the math on that just to see 120,000 divided by 21 units. That's $5,700 a unit, y'all. You can't get that kind of deal on anything. Right? So the reason I like this deal specifically, though, so out of those 21 units, obviously the one was the owners quarters. Right. Which still needed work on it, but the 20 units were all rentable units. Now they had four of those 20 units already converted to efficiency apartments to where it was just a property that somebody could live in permanently. Right. And she already had a couple of those units actually rented to where, you know, the like 600 bucks a month. It's pretty small. But when you think about that for an efficiency apartment, that's a pretty good deal. Of course, it's all bills pay because it's all on one one system or whatever, but so it didn't have separate meters or anything like that.
But anyways, I figured it was a, you know, a no lose situation. So 120 is kind of what I said. Yeah, sounds like that's a good deal. So lock it up. So that's exactly what she did. She got it for 120. So my acquisition manger got the deal and actually like a day or two later, once we had pictures and everything that we needed to start marketing the property, my dispo manager actually sent that deal out to our buyers list. Right? So we, we daily get added, we add buyers daily to our list just organically, automatically people just come to our site and sign up. Typically we get another 15 to 25 probably buyers per week just by accident, people just coming to our site and registering. Okay. So we're always, always actively trying to add to that list on our own as well. You know, whether we go to Facebook groups to copy emails from people. Saying that they've they're looking for deals or whether we're actively calling on these buyers nearby other properties. So we're adding buyers that way as well. But this was just a buyer that organically came to us out of nowhere. So the buyer actually lived in Phoenix. The property is in Oklahoma City. Well, not Oklahoma City. It's in O'Quinn, Oklahoma, which is a tiny little town about 2 to 3 hours from Oklahoma City. So it's super, super small community with like a couple of hundred people.
It's got a stoplight and a couple of stores and a school. You know, it's one of those kind of places, real small place. But it had this motel, which was a good deal. We thought, man, at $5,500 a unit, you know, you can't lose on this deal. So we sent it out at 200 thinking that's even a smoking deal at 200. Because if you do that math, I'm curious, 200,000 divided by 2021 units, that's even $9,500 a deal, which is crazy, right? Most of us, if they can get, you know, a property at 30 grand a deal, you're getting a smoking deal. So we sent this out at less than $10,000 deal. So we had a buyer immediately that said, yeah, I'll take it at full price, you know, earnest money, everything. Right, let's get it done. So there is lessons in this. So we always typically do, you know, for brand new buyers that we've never met, we want at least 5% down as a as an earnest money. So 200,000 times five. That's 200,000 times five is 10,000 earnest money. Okay. So that's kind of my rule of thumb. If it's brand new that we've never met or dealt with this buyer ever before, part of the vetting process is obviously we want to get proof of funds, which you gave us. We want to know that they're serious. It's as is type of deal. There's no contingencies, no nothing. Once you sign the contract, you're locked in basically.
Right. So my, my, my disposition manager did the due diligence, did everything correctly, and the only thing she didn't do was the 10,000 down. So a lot of times we'll do for people that we know, you know, it's kind of a $4,500 minimum. But on these bigger price points, we want 2500 to 5 grand typically. So, you know, I did tell her I mentioned that like, hey, let's let's be sure, since this is a new buyer, that we get like a $10,000 earnest money, but worst case scenario, get five. So long story short, I don't know what happened or why it happened, but she only got $2,500 down, which is not a huge deal because she did vet the buyer. The buyer and his partner actually flew down to Oklahoma City, rented a Tahoe, drove to OKC 3 hours away and met my disposition manager there to actually over just kind of look the property over and they even met the seller's everything, right? Of course they weren't instructed to talk to sellers, you know, because the buyer handled all this right. Or my dispo manager, because you never really want your buyer and seller talking. It's all via the dispatch manager or your boots on the ground. So everything was going good, you know, they agreed to the 200,000. They put their earnest money before they left town. They took it to the title company, which was only 2500.
But long story short, I was on spring break. We were actually snowboarding on the mountain, and I got a call from the title company that, hey, you can't get a hold of the buyer. So the buyer in the ghosting is our entire company and our title company for about two weeks. So my, my transaction coordinator and my display manager and the title company had tried to call email, text any way they could communicate with the buyer to kind of see, hey, we need, we need the funds wired and, and we're closing on this date, etc., right? So no one could ever get them. So what I did was I went ahead and bought a Phoenix phone number so that we had a local number. I'm thinking, well, you're probably answer a local number. So that's what I did. I actually bought the number and I ended up calling the guy from the Phoenix number. He answered first try. So once I got him on the phone, I did record the video or the audio as well, just so I would have it to kind of give to my team so they can learn from it. But I called the guy, he answered, and I'm like, Hey, this is Gralen. You know, you're buying a property from us in Oklahoma. He's like, Yeah, yeah. You know, I'm like, Well, we're closing on that Monday and no one has been able to get a hold of you.
My entire team has called, texted and emailed. We even got our acquisition manager that got the deal involved to see if she could reach, you know, the guy just so everybody kind of touched them. But my acquisition manager, display manager, transaction coordinator and title company, nobody could get a hold of the guy for two weeks. He answered my call for a strike. So I'm like, Hey, what's up? You know, why aren't you spotting? Did they call the right number? I'm like, Yeah. They call it the same number I'm calling you on right now. So everybody has the correct phone number and email. You know, you just haven't responded. So I'm like, Well, what's going on? He's like, Oh, nothing. You know, I'm actually getting on a plane right now. Tell them to reach out to me on Monday morning. I have all the money required and we're going to go for closing Monday. I'm like, okay, are you sure? He said, Yeah, everything's good to go. But he did kind of sound something in his voice. Told me that something just wasn't right. For one, we already know it wasn't right because he's ghosting us for two weeks, right? But for two, just the tone in his voice and the way he was trying to get me off the phone really quick. Yeah, the the flight kind of made sense, but still, I could feel that something was wrong. Right. So anyways, Monday comes around, same thing.
A company reaches out, transaction coordinator reaches out, he's not responding. So what's the deal? You know? So then I tell my dispo manager like, hey, log in the call reel because that's where I bought the phone number. Like call the guy from our Phoenix phone number that I purchased the other day. So she called him from that and guess what? He answered first try again. So my dispo manager spoke to him and he's like, Yeah, I just can't do the deal. So I'm backing out. So basically he was canceling the day of closing. Now in my book, that makes you super shady, super unreliable. And you're you're the kind of person I would never, ever, ever do business with. Right. So I told her, like, hey, I told this woman to this, you know, we're going to block this guy, tell everybody we know about the situation and what happened and how he canceled on us last minute. Obviously, he knew that he was backing out of this deal probably for two weeks. That's why he was ghosting us trying to avoid this situation. And we think he probably would have never replied to us at all if we didn't buy that Phoenix phone number. But long story short, my dispo manager said, you know, what would it take for you to actually buy the property? You know, everybody's counting on you. We've got about ten people in this. Obviously, we've got the sellers, you know, everybody on our team, you know, the title company is involved.
Like there's a lot of people counting on you to close this transaction today. So what will it take? And the guy was like, whoa, you know, my partner backed out and blah, blah, blah. So, you know, I can probably go ahead and buy it for 150. So keep in mind, we've got it for 120 and that made me super mad. So it's like it was his plan all along just to come back on us last minute to get a reduction in which after I found out everything, I don't think that was his plan, but that's how it felt. So I was furious, right? I'm like, No, we're not selling the guy. I'll buy it myself if I need to and we'll fix it up and sell it or I'll keep it myself. Because I actually thought about keeping this because it'd be a great property, you know, at 550 $700 per unit, you know, remodel it and all that, you're still in at a super low price. But anyways, I was like, No, we'll never do that. So I'm like, Get him up, you know, closer to the 208 he already agreed to. Obviously, he already knew he was losing the 2500 if he backed out. But he was ready to just walk away from the deal because his partner bailed on them, evidently. But anyways, we weren't taking 150 at any means. So long story short, my decision manager did agree to 160.
I just like I left it in her court. She wanted to get paid on it. Everybody wanted to get paid and I wanted to stay out of it because it was just making me mad. Right. You know. So basically everybody agreed with my company and with him and the target company like, hey, we're going to do it for 160. So my transaction coordinator, Cynthia, did them over with a new price of 160. So it sucked really bad. Everybody was counting on this 80,000 payday and we ended up making 40,000 on the deal. And in my eyes, he literally stole 40,000 from us. You know, that's exactly what it did because he agreed to 200 last minute. You know, typically on a house I would have never gone for this deal out of took it down myself or we would have just found another buyer. We would have did something different. Right, because I never want a buyer to dictate what we do. This was a super rare scenario. It's a motel in a super small town that no one wanted to go to. He was literally the only buyer even interested at all. Like nobody was interested in this deal at all except for this one buyer. So it kind of had a stuck in a hard place. And, you know, if it wasn't for the sellers, you know, they were already kind of leery about us for whatever reason.
Usually radio confirms that you're a legit business, but radio for them, they told us that. Yeah, we don't know. We thought it might be a scam since we heard you on the radio, which is really strange. We usually get the opposite reaction. People kind of look like look at us like local celebrities because you're on the radio, we know your religion, right? But anyways, the seller had other friends in the city and different places that wanted to sell their house for cash as well. So they had a lot of referrals lined up for us as long as this transaction went smoothly. So not. Only did we not want to delay the closing on this Monday because it would look bad to the seller. We wanted to make sure we performed on it that day. So that's exactly why we ended up taking a $40,000 loss, because we're really we were kind of forced into it. He was the only buyer available, and we wanted to do right by the sellers and not even extend the day. We probably could have sold it if we got on the phone and really call it. A bunch of people might have taken us an extra week to close, but we probably could have did it or I wouldn't have mind. Like I said, keeping it myself. But long story short, we really did it to make sure we keep that relationship strong with the seller so that we can actually get all those referrals that they were telling us about, that they had friends and family that were ready to sell for cash just to make it an easy process.
So at the end of the day, I still look at it today and I always will look at it like this, that the buyer literally stole $40,000 from us because they agreed to 200. I ended up paying 160. So everybody on my team took a hit. Our company took a hit, so we all took a hit, $40,000 hit. But at the end of the day, we still made the deal happen. We did make $40,000, which I'm super thankful. It's not 80, but 40 is better than nothing. So we just did the deal and moved on so we can all just focus on other properties that we're trying to do. So anyways, hopefully, hopefully you got some value out of this video. Let me know your thoughts. What would you have done? Would you have just bailed on it? Would you have taken the 150 initially that the guy said he would do? Would you have done what we did or what would you do differently? Let me know. Drop me some comments. I'd love to kind of hear your thoughts and your mindset on what you would have done differently. But anyways, if you've made it this far, definitely like this content, if you don't mind, like share, subscribe and I'll see you guys in the next video. Thanks a lot.