Hey there, Cam Dunlap here with some practical wisdom to share!
One of my students — let’s call him Charles — recently came to me with a deal that hit a roadblock…
He asked:
“I’m looking at a property in Riverside, California with an ARV of $795,000 needing only $10,000 in repairs. It has a tenant paying $3,600/month through July. The seller has a $550,000 mortgage at 4%, paying $3,900 monthly including impounds. I offered $625,000 cash or $650,000 with seller financing, plus $10K more if delivered vacant. The seller rejected both offers. Do you see any way I could still make this deal profitable?”
Great question!
This scenario happens all the time in our business. You spot a good deal, make what you think is a solid offer, and… crickets. Or worse — a flat-out rejection.
But here’s the thing — a “no” today doesn’t mean “no” forever.
It just means “not yet” or “not on those terms.”
Negotiating real estate deals is like fishing — sometimes you need to change your bait when the fish aren’t biting. (And trust me, I’ve spent enough time on boats to know how stubborn some fish can be!)
If you can relate to Charles here, let me offer you 3 proven strategies you could use to potentially revive this stalled deal.
Strategy #1: Pivot Away from Cash to Short-Term Seller Financing
Cash isn’t always king, despite what conventional wisdom suggests.
Sometimes, structure beats cash — especially when the seller has competing priorities.
Let me explain…
In Charles’ case, I actually recommended pivoting completely away from the cash offer and focusing solely on seller financing with these adjustments:
- Increase the offer to around $675,000 with seller financing.
- Make it short-term (6-12 months max).
- Emphasize that this approach eliminates borrowing costs.
This works because it allows you to control the property without immediately needing to find all the money.
The seller makes their mortgage payment while you’re making a payment directly to them.
It’s a win-win bridge that gives you time to implement your exit strategy.
So, here’s how this conversation might go:
“Mr. Seller, I’ve been thinking about our previous discussion, and I want to present a different approach. Instead of my cash offer, I’d like to propose $675,000 with short-term seller financing — just 6 months. This’ll give you a higher price while also allowing me to avoid expensive borrowing costs. You’ll continue making your mortgage payment temporarily while I pay you directly, and I’ll refinance or sell within 6 months.”
You should resist the temptation to use a lot of industry jargon or make it sound more complicated or complex than this. Motivated sellers want fast, easy, simple solutions, so be sure you frame it that way, just like my snapshot example there.
Strategy #2: Pay More If the ARV Is Solid (But Structure It Smartly)
If you’re 100% confident in that $795,000 ARV — and I mean rock-solid confident, not “my buddy who’s a part-time agent said so” confident — then it seems to me that based on the numbers Charles shared, he could actually go higher on your offer price.
Numbers and circumstances vary on a per-deal basis of course.
But it’s worth pointing out that, with only $10,000 in repairs needed (which is remarkably low for a property of this value), you might consider offering up to $700,000.
Even after repairs and closing costs, you’d still potentially walk away with $40K-$50K in profit.
But here’s the non-negotiable part: You need that tenant OUT if you’re planning to resell.
Saying an additional $10K for a vacant property is smart, but you might need to guide the seller through this process. The tenant might need to be “bought out” — meaning the seller may need to financially incentivize them to leave early.
Why is this so important?
Because trying to sell a tenant-occupied property is like trying to show a house while someone’s taking a shower.
Awkward for everyone and not conducive to getting top dollar!
Strategy #3: Implement a Strategic Follow-Up Sequence
This might be the most powerful strategy of all, but it requires patience.
The seller is currently in a cash-flow negative position, right?
They’re paying $3,900 monthly while collecting only $3,600 in rent. And that’s assuming the tenant always pays on time and nothing breaks!
This negative cash flow creates mounting pressure over time. Your job is to be there when that pressure reaches a tipping point.
Here’s what to do:
- Send one more improved offer as suggested above.
- If rejected again, put the seller on a systematic follow-up sequence.
- Check in monthly with friendly, value-added communication.
- Be ready to pounce when circumstances change.
Remember, the tenant’s lease (in this specific situation) ends in July.
And the seller’s motivation might increase dramatically if:
- The tenant decides to leave.
- Market rents decline further.
- Any major repair issues emerge.
- Their personal financial situation changes.
This is why I tell my students: PERSISTENCE BEATS RESISTANCE.
Every. Single. Time.
A real dialogue that worked for one of my students:
“Hi Bob, this is Charles checking in as promised. Just wanted to see how things are going with the property. Has your tenant mentioned their plans after July? I’m still very interested in working something out that makes sense for both of us, so I’m keeping some funds set aside for when the timing might be better for you.”
The Math Still Needs to Make Sense
Looking back at Charles’s specific deal, let’s break down the numbers:
- ARV: $795,000
- Current mortgage: $550,000
- Estimated repairs: $10,000
- Existing tenant paying: $3,600/month (through July)
- Current mortgage payment: $3,900/month (including impounds)
That negative $300/month cash flow is actually working in your favor as an investor.
It creates a problem for the seller that you’re offering to solve.
When you use seller financing instead of cash, you’re essentially saying: “I’ll take over your problem without you having to come out of pocket at closing.”
That’s powerful positioning!
Final Thoughts: Be Ready to Walk
Starry eyes aside, sometimes the best deals are the ones you walk away from.
Not every stalled negotiation can or should be revived.
But before you completely give up on a deal like this Riverside property, make sure you’ve tried all three strategies:
- pivoting to seller financing
- strategically increasing your offer if the numbers work
- implementing a follow-up sequence
Remember that successful real estate investing isn’t just about finding deals — it’s about creatively structuring them in ways that solve problems for sellers.
So get out there and make more offers! The more offers you make, the more money you make.
That’s not just a catchy saying — it’s the fundamental truth of our business.