What To Base Offer On
I'm meeting with several properties owners this week and as you all know I'm a beginner. I want to do my due diligence when buying property; however, I also know that I have to act fast. Also, I know that I can put contingency clauses in the contract.
What I don't know is what I use to base my initial offer to the seller on? I was instructed that I should make the offer first and then do the research (comps, market appraisal, etc.) can someone please advise me, I meet with a seller first thing in the morning.
Give me the details on the subject property and how you plan on aqcuiring/purchasing property...along with the base info you recieved from seller on initial contact
I plan on holding the property under contract by offering earnest money and "subject to my partners approval.." to give myself 30 days to find a buyer. I have a lender that will finance my buyer if need be. Also, I have been pre-approved for a loan in case I have to close on the property myself. However, this will be a last resort because I want to flip my first few deals.
On Monday, I'm meeting with a broker this propertyis REO owned. It has been on the market since May and the asking price is $68,000. I really don't have any more details.
On REO's I have the best luck by finding comps to determine appraised value roughly...
examine house...add up necessary repairs needed at full retail value...
Take asking price less 15-20%...less repairs ....on a all cash offer and they will listen... if this figure is more than 60-65% of ARV .....I offer 60% of ARV...If you got the cash it will work most of the time...
sight unseen thats the best I can explain to you....
Subject to partners approval has been rejected everytime I used it in the past .... never worked once for me- maybe you will have more success...
what has worked is an all cash offer with a check attached to offer and 48 hours to decide or offer is void... that works for me, but I have managed the money right and lined up private investors who will fund on a phone call.