Are you a little worried about making an offer on a property?
I mean, does it seems kind of scary to do that step?
Well, I’d like to put those fears to rest.
Of course there’s risk involved in this business. Of course you’ll make mistakes…
But you can’t let anything hold you back from making real estate investing work for you—because it can work. I’m proof of that.
So, when you’ve got the intent and means (funding) to buy a property… my advice is:
Just make the offer!
If your offer is close—that’s good enough…
See, you don’t want to spend lots of time and resources doing a ton of due diligence before you have the property under contract because it could all be a major waste of time if you don’t end up getting the deal.
And, think of this too…
I advise my students and clients to make at least 5 offers a day. If you were to spend 1 hour calculating each offer… that’s at least 5 hours every single day—and your offer might not even be accepted.
Such a waste of time…
Done is the new perfect.
Just get ‘er done. Make the offer and go from there.
Obviously, you’ll know you’re in the ballpark on price if your offer is accepted.
But maybe your accepted offer ends up being off… don’t panic!
Remember, if you need to, you can always go back and renegotiate. (That’s why you have an inspection contingency in your contract anyway.)
After I have a deal under contract, I look at the numbers based on the 3 Rs:
- Rent (how much monthly rent it can produce)
- Repairs (how much the repairs will cost)
- Resale Value (how much it can sell for—ARV: after repair value)
So, when I do more in-depth due diligence and calculations after I have the deal under contract, and I learn that my numbers are bit off… I simply go back to the seller and explain logically why we need to reduce the purchase the price—I blame the numbers:
“Mr. Seller, well, I’ve analyzed the numbers in my spreadsheet and I need to renegotiate based on these numbers.”
And I have found that it’s easier to renegotiate the price down—when needed—after I have the deal under contract. Just blame the spreadsheet, folks. They can’t argue with numbers.
It’s important for me to say that you’re not making blind offers. It’s more of an educated guess with some basic calculations.
So, stop worrying about making mistakes… stop overanalyzing… stop overthinking—get close enough and just make the offer. Maker 5 offers a day.
Do it—starting today.