If you open your wallet you can spend thousands of dollars getting an education to buy and sell houses. Spend weeks at Boot Camps that teach you everything you need to know to make money – you hope.
My experience is you may have already done this? And, you may still feel lost and not know where to start. Whether this is you or not the goal of this series is to show you in simple terms the recipes to win. Again let’s look at my buying recipe:
recipes make cooking fun!
Find Property
In my mind finding deals (properties) is the most important aspect of being a pro real estate investor. Second only to finding buyers to buy from you.
The general strategy for finding deals is having a network of people that bring them to you – whether they are Realtors, or Attorneys, or Bird-Dogs. But having a system or recipe – to follow our theme – is key to winning.
But, we will cover recipes for locating later on.
Negotiate > Write Offer > Accepted Offer
Let’s assume you have found a deal to buy. You have got to get it under-contract quick – or maybe not. Part of the negotiate recipe is understanding the market conditions. If the market is moving fast, so do the good deals. If the market is moving slow, it’s likely that you have more time to let the seller stew.
Depending on the find recipe you used, you may have a Realtor negotiating for you. If this is the case, realize not all agents are created equal. And, that sometimes you may depending on market conditions and your agent, use a slightly different recipe:
Which probably remind you to ask why on earth you’d negotiate before writing an offer? If you have any experience that’s the question I get a lot. When I negotiate a deal I want to know the deal before I write an offer. I don’t want to send 10 faxes back and forth to arrive at a price. It takes time. Each exchange can take a day or more. I’ve seen these exchanges go on average 4 to 5 days.
Granted this exchange may be part of a strategy! Don’t think about this to much – yet. But, the reason it takes so long is everyone has to keep signing documents. People have lives!
What I want is to meet the seller at the property and arrive at a real number to buy. Then fax/email my offer and have it signed and accepted inside one day. IF you have a Realtor they might be doing this already – calling the other agent and testing the water… “we’re thinking about make an offer around $50k…”
Or I even work with selling agents directly. It goes something like this:
agent: make an offer.
me: I’ve found it much faster to email or text you what we have in mind. If it works for your client, great, we’ll write the offer.”
agent: sure um okay
I recently negotiated the purchase of a three million dollar house using text message. Once the contract was signed, the selling agent smiled “I’ve never negotiated the sale of a house over text”. I smiled back.
Other times in fast moving markets you write an offer first. In an attempt to take the property off the market. Again, we will cover negotiation further later in the series. For now understand in our buy recipe negotiate and write offer can be reversed.
An accepted offer means it’s time to close! Well, almost… you have several weeks or days to do inspections and perhaps re-negotiate. Once your due diligence time has expired you will be set to close. Again we will cover accepted offers in more detail later in this series.
Close
Ahh, it could be that I’ve done this for so long that closings just seem easy. But really, the title agent/escrow agent/attorney will handle most of this process. Your job is to make sure the money is there to close and to show up to sign docs.
ReCap
– The general buy recipe is simple.
– Having a find recipe is important – but not as important as having buyers to buy from you!
– Negotiating changes when the market changes.
– As you have a core understanding of the buy recipe, we will expand on all its ingredients in detail. Then we can begin to change ingredients to make new recipes.
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