Today's plan: make an offer

[Matt Ransom]

Today's the day... 

While the deal may be small, this is a big day for me. I have been reading REI for years and studying the local market. After getting in a more stable financial position (and with bank pre-approval in hand), I am ready to make an offer on a zero-lot line attached.

Ask: 59,900

Assessed Value: 49,500

I am planning on offering 25,000 and see where it goes.

I have the cash to put 20% down.

Nervous- Excited.

Any advice/ encouragement is appreciated!

Thank you,

Matt

[David Oldenburg]

@Matt Ransom Never be embarrassed to offer low, and never care about hurting someone's feelings or offending someone.  I have been in the RE and mortgage industry for many years and have closed thousands of transactions.  I have seen sellers take ridiculously low offers, even saw a home sold in a garage sale one time!  

Here is how I do it. I don't just offer low. I arrive at a price based on a specific profit I want to make, usually 20% on my total money invested, which includes cost of the home + rehab.  I also add in the cost to carry my money at a decent rate of return for the time I anticipate it will take to complete and sell.   My offer might appear low, but I sound like an expert when they ask me to justify my low offer. I walk them through what I believe the property will be worth, I explain that I am an investor and need a 20% return to offset risk etc...  I talk about cost to rehab etc... They may not want to take the offer, but I come off as a highly educated and experienced rehabber, and a lot of times they call me back when the home does not sell.