My first offer!

Wednesday (10/7) I'm going to make my first offer on property I found. An elderly man lives there and has been there 51 years. He's the original owner. I went through the house to estimate repairs. I really hope I'm estimating right. It's a 1300 sqft 3/2/2 house. Needs carpet, new windows, paint, and totally gutted kitchen and bathrooms plus a few other cosmetic things. I came up with $20K in repairs. The ARV is about $100K.

So I figure my offer should be $45,000. Does this sound ok? Should I get an attorney to help sign the contract? How long should I give myself to find an investment buyer? How does an investor see the house without bothering this owner too much as he still lives in it?

I'm trying to get past my fears, but I guess all first time investors get it. I'll never learn if I don't actually do it though.

Thanks!

Edited: 06/26/2010 at 09:56AM

Shanti S.

· Western, Massachusetts

208 posts
2097 Influence
3 Awards

Icon_minipost Oct 05 '09, 01:21 AM

D'oh neglected to pay attention to what sub forum I was in :-) What a nice group, nobody made fun of me!

Edited: 06/26/2010 at 09:56AM

Dustin Phillips

Real Estate Investor · Indianapolis, Indiana

169 posts
1258 Influence
3 Awards

Icon_minipost Oct 05 '09, 01:51 AM

Well good job on taking steps forward... Here are some observations from my point of view... Do you know what is going on in your area. Meaning are properties being renovated and retailed (Sold to home owners) or are a bulk of the buyers landlords in your area. If they are landlords then you will need to know what they are looking for I.E. cash on cash, per door $$'s or what... The numbers look okay, but it is all relative to what investors in your area are paying... Good luck ...

Edited: 06/26/2010 at 09:56AM

Christopher Um

Real Estate Investor · Los Angeles, California

32 posts
216 Influence
2 Awards

Icon_minipost Oct 05 '09, 02:33 PM

Try going through your neighborhood and start looking for rent sign, on going rehabs.

Call them and see if they are looking to buy more properties in this area, and ask their criteria(price, bed/bath mix, cash buyer or financing, wholesaler rehabber or landlord, etc..) get their contact information. Once you find that out, present your offers to them.

Also just because he doesn't accept your offer that day won't mean he won't accept it another day. I offered 95,000 on a property. He wanted 150,000. He didn't accept. I waited 3 weeks sent him the same offer, he dropped his counter down to 110. I am still working on this deal as we speak, I will probably contact him again 2 weeks later and ask him if he still sold the property, and tell him my offer is still good.

But in the meantime, Build up your buyers list, that is the key to being a successful wholesaler. It'll help you understand what type of deals people are looking for in that area. The type of financing(cash, convention, pm, hm, etc..), the price, the exit strategy. Because you already know what they want, and have them in mind. It is so much easier mentally to make offers, because you don't have to worry about finding a buyer. And you have a much better idea of what to offer, meaning you'll have a ton more confidence.

Edited: 06/26/2010 at 09:57AM

Joseph Ziolkowski

Inspector · Alsip, Illinois

364 posts
2488 Influence
5 Awards

Icon_minipost Oct 11 '09, 04:53 AM

Hey Chris! Congrats on your first offer, as I'm sure you've made it by now :) I totally agree with everything Christopher Um said. Also, as far as the attorney goes, it wouldn't hurt to have him/her draw you up a purchase contract and assignment contract that works in your state. Just make sure that they understand exactly what you are trying to do, and that the contracts can be copied and used over and over again. As far as having one help you sign it, that shouldn't be necessary. Contract should speak for itself, and if it was drawn up by a competent attorney, it should be golden. Good luck, and keep us posted!

Edited: 06/26/2010 at 10:01AM