Wholesale Pricing
I am looking at a few properties (four-plex's) that are close to right. I'm shooting for about $800 / mnth profit with one of them, but I'm coming up a little short. I want to be safe and have figured in my expenses at around 35% mnth.
My question: are there any reliable methods to submit offers for lower prices that the owner will bite? Or do I just submit the offer and wait? Am I on the right path here?
My goal is to buy the property for less that the asking price.
Also, I know that many owner's will carry 100% of the loan if you meet certain criteria, but is it unusual to ask an Owner to carry 30-50% if you don't?
Thanks!
Ok, the first thing you don't want to do, is try to sympathize. I had one guy tell me one time, after I walked him through the property, and disrupted the tennants twice, that "well id have to come up with 15% down, and 15% of 400k is $60,000....." and he drew me out a mathmatical chart, showing me the different down payments and such. (like im some kind of moron) Obviously, the guy didn't get the property (he ended up asking 305k) Then an REAL investor came along doing a tax exchange and i got the 400k for it
To make this story shorter, basically what you need to do, is show interest, but not desperation. Look for little flaws that could get the owner in the mind frame of im asking too much, or i'll sell if this guy offers me a decent price. Its kinda odd, but people will try and sell for 100k, and damn well know they will take 90k , they just wanted to ask higher so they get the price they REALLy want.
Birddog:
Great advise! That'll be part of the strategy I'll use. Another question would be, since the goal is to buy at a wholesale price, how much is too much to try and knock down the price. I mean, I'm not going to present a stupid offer, but if a seller is asking 350,000 or so, and I use the technique and can work it to my advantage, what's reasonable 30-50,000 less possibly?
My goals is to also work with the motivated seller...any thoughts about it?