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How To Make Offers That Get Accepted In Real Estate Investing
By: Simon Macharia |
| word count: 472 comments(0) views: 73 |
| One of the biggest challenges for real estate investors is to make offers that get accepted. |
One of the biggest challenges for real estate investors is to make offers that get accepted. Buying properties is the basic foundation of real estate investing.
You cannot make any money unless you buy properties.
Here are a few tips on how to make sure your offers get accepted.
The type of property you are buying determines the offer you make.
1) Buying from motivated sellers
If you buy houses from motivated sellers, it is necessary to have the following pieces of information:
a) Market Value
Do your due diligence to find out conservatively how much the house would be worth in a perfect condition. You cannot make any offer until you have this information.
b) Mortgage balance
You must know the mortgage balance before you can make an offer. If a seller is not willing to provide this information, they are not motivated enough. Move on to a motivated seller.
When buying a property, the mortgage balance must be low enough to allow you to make a profit. It must allow you to make a profit and own it free and clear.
c) Repairs needed
You can estimate repair costs with just the information provided by the seller.
It is necessary to do your own repair estimate before you can make an offer. Of course I prefer to see the house myself.
d) Asking price
Given the above 3 pieces of information, if the seller is asking for too much, the deal might not be worth it.
A good asking price must take into account the market value, mortgage balance and repairs. You can then make an offer based on the asking price. If the mortgage balance is low enough to allow you make a profit, by all means make an offer.
No offer can be too low, but you also have to take into consideration the seller's needs. If they face foreclosure, their asking price might be to just walk away from the property, or they might need some moving cash.
It makes no sense making an offer when mortgage balance is so high you cannot make a profit. Drop it and move on to the next one.
When all is said and done, the only bad offer is the one you have not made. Make as many offers as you can. You'll be surprised how many get accepted.
2) Buying foreclosed properties
The asking price and repairs are the only important considerations to make in this case. Banks selling these properties are willing to negotiate.
Most REOs are listed below market value. Depending on your exit strategy, if the numbers are close to making sense, by all means make an offer.
Remember the banks are willing to negotiate, so always make an offer lower than the asking price. |
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