The biggest challenge that real estate investors face is to make offers that get accepted. The basic foundation of any real estate investing business is buying properties. You can only make money if you buy properties. This is how you can make acceptable offers to buy properties. The offer you make depends on the type of property you are buying. 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 Be sure to get the fair market value conservatively when the house is in perfect condition. You must have this information before you can make any offer. 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. The mortgage balance must be low enough to allow you to make a profit when you buy the house. Thus means that the offer you give must allow you to own the property free and clear and still make money. 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 If the owner is asking for too much money given the above 3 pieces of information, you might never make the deal happen. The market value, mortgage balance and repairs must be taken into account in a good asking price. You can then make your offer lower than the asking price. Make an offer if the mortgage balance allows you to make a profit. No offer can be too low even though you need to consider 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. Move on to the next deal. 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. In today's market, most REOs will be 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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