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How I Went From Milking Goats To Real Estate Riches

PART II Return to: Part I: Real Estate Riches For this book’s chapter, I’d like to discuss the 7 key components of an offer. WARNING: Making An Offer To Buy Real Estate Without The 7 Key Components Is Like Playing Russian Rolette with 5 Bullets! As a real estate investor your success is based on your ability to make offers! We could talk about a hundred other things, but it all comes down to making offers and getting them accepted. This is the most important part of being a real estate investor and it’s unfortunate because most investors can not name two of the key components, let alone all seven! Just imagine that you have found a house that’s worth $100,000 and you’re about to offer $60,000. Do you see a problem? Going from $100,000 to $60,000 is a huge leap and unless you can support your position the likelihood of getting an accepted offer is slim. But, there’s hope, what if you could gently walk the seller down to $60,000 and have your offer supported in black and white? Do you think that would help get more offers accepted? You bet it does. Let’s start with what you don’t want to do in most cases. Don’t give a seller a lowball offer (without justification) when they are expecting a much higher price. A low ball offer without justification is an insult and their natural reaction is to pull away or in this case say no to your offer. By using the seven key components you are able to justify your offer and the seller understands your offered price and why it makes sense for them to agree to your offer. We’ll briefly cover the 7 key components, but full explanations can be found in the Real Estate Profit Pro System. By providing on offer with the 7 key components we can let the offer do the work for us. I have bought properties by fax and mail using this format and you can too! Cover Letter. A simple letter that tells the seller you are making them a cash or terms offer, or both, and that you are including a repair cost estimate and an offer price breakdown.. The cover letter sets the stage for your 7 component offer and shows the seller you are a professional. Repair Cost Estimate. Unless the house is brand new there will be repairs on the house and many sellers will not think of them unless you point them out. Most houses a few years’ old need new paint and appliances to compete with other homes on the market. Just listing the repairs on paper ensures the seller is taking the expenses into consideration when they sell the property. Offer Price Breakdown. Breaking down your offer price can be critical to getting an accepted offer. Few people realize the expenses associated with a sale until they see them in black and white. Start with the lowest comparable sales and include the following expenses: real estate commission, buyer’s discount, closing costs, repair cost estimates, holding costs, profit margin, marketing, property taxes, and property insurance. These are all real costs associated with the property that need to be taken into consideration for either you as the buyer or by the owner. Purchase & Sales Agreement. You have to give the seller a written offer that is easy to accept. Make sure your offer is short and easy to understand. If it is long, hard to understand, or has a lot of legal jargon the seller will be intimidated. And, an intimidated seller says no. Comparable Sales.  Many sellers do not know current property values. By providing comparable sales, the low ones, you are helping to justify your position and providing important information to the seller. Not providing comparable sales will often cause the seller to get ask a Realtor for an opinion of value and next thing you know the Realtor has a listing and you never hear from the seller again. Seller Financing. Most of the time we want to give the seller two options, a cash price and a seller financing price. With limited space I don’t have room to explain seller financing on properties fully finance by banks, but trust me when I say it can be done without qualifying for the loan. We want to explain to the seller how we can make a seller financing offer at a higher price than our cash offer. Most sellers will choose the cash offer, but giving them a choice of accepting two offers is much better then giving them one offer where they feel like they have to take it or leave it. Purchase and Sales Agreement, Terms Offer. This offer goes with #6 above. You always want to give the seller the ability to accept your offer. An offer that is not in writing doesn’t mean a thing in the real estate world If You Are Ever Going To Make Any Real Money You Must First Put Yourself In A Position To Do So. For those skeptics who are hesitant to believe that something as simple as what we’ve discussed could be so lucrative they need to understand there is little or no risk because if you don’t write big checks, you aren’t taking a big risk. I get a rush helping people get out of a 9-5 and get to where they want to be in life. One of my favorite quotes is “You can make money or you can make excuses, but you can’t do both!” I believe it with all my heart and hope you reach the same conclusion. It’s simple and it’s true. Gerald Romine is a very successful real estate investor with an honest direct approach and an old fashioned set of values that is rarity in today’s society. Gerald is an active investor, educator, and speaker.

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