That 1st lowball offer...

12 Replies

Surprisingly I wasn't nervous at all. It was a lot scarier in my mind than in reality. I offered $70k for vacant rental property with two buildings (four units) within walking distance to our state university, $348k ARV.

Before I actually got in front of the seller, there were so many "what ifs" playing out in my mind. But once I started talking, confidence came out of nowhere!

Well... it kinda came from the comps I'd written down & the deal analysis report I had in front of me. Lol..

What the pros on BP say is true; as long as your offer is justified by comps, ARV, repairs, etc., it's all good. The seller said he wanted to discuss the offer with his family and would call me back when they arrived at a decision.

Just posting this hoping that it'll encourage a fellow newbie out there to go ahead and make the "lowball" offer with confidence. :)

I am immune to making lowball offers.. Always be nice, and I always tell them "Now don't be offended with my low offer, and I won't be offended if you say NO!"  

When they do say no, I always offer to let them call me and I will answer any questions they may have. I also ask if it's okay if I call them at a later date just to check in.

I'll remember to ask to keep in touch if we can't come to an agreement on price this go-round. Do you make your offers in person or over the phone? @Lee Smith

As smoothly as today went, I might start firing those bad boys (low offers) off like it's nothing lol.

I have a low ball offer to send out tommrow and i dont feel anywich way. I think my offer might be to high so i guess i would go lower than my original offer price.

The listing is wayyyy over price, and it needs major reno...

Most of my stuff is over the phone... Sometimes a seller wants it in person, but they are few and far between.

The SOP:
I get a call from a mailing, and I ask them a bunch of questions about the property(age of systems, roof, plumbing, kitchen, baths, etc). Then I run quick numbers while I am talking to them, and then I give them a verbal over the phone.... "Well, without seeing it, going by what you are telling me, and the repairs I think it will need... I am probably in the 15-20k range.. Is that something you might consider?" If they say yes, I go take a look. It's never as good as they make it out over the phone, so when I am heading over I am thinking the 15k number, and then if it's really bad I just say "Well, it's in worse shape than I thought... I don't think I am at 15k number..." If they press me for the real number I say "Well, please don't be offended when I give you this number, and I won't be offended if you say no..." we all laugh, and then I give them my real number... 

I'm not doing a bait and switch.. I have offered what I said over the phone and bought the property, but that's very rare.... 

For multifams(and for SFR's), I basically ask the same questions, but for each unit.. Then I run more of a cashflow analysis and then hit them with numbers..

Not worth wasting anyones time.. I will still call them back in a month if they tell me they aren't interested in my "over the phone" price... These deals work out over time... One of my friends talked to a woman for over 18 months and ended up buying the property at what he originally offered.. It just takes time..

Originally posted by @Nikki Robinson :

Surprisingly I wasn't nervous at all. It was a lot scarier in my mind than in reality. I offered $70k for vacant rental property with two buildings (four units) within walking distance to our state university, $348k ARV.

Before I actually got in front of the seller, there were so many "what ifs" playing out in my mind. But once I started talking, confidence came out of nowhere!

Well... it kinda came from the comps I'd written down & the deal analysis report I had in front of me. Lol..

What the pros on BP say is true; as long as your offer is justified by comps, ARV, repairs, etc., it's all good. The seller said he wanted to discuss the offer with his family and would call me back when they arrived at a decision.

Just posting this hoping that it'll encourage a fellow newbie out there to go ahead and make the "lowball" offer with confidence. :)

Hey Nikki,

Well done :)

Check out this blog I wrote for Bigger Pockets a while back about negotiating.

It relates to your post :)

http://www.biggerpockets.com/renewsblog/2014/07/05...

Thanks and I hope you find it useful.

Great job taking action @Nikki Robinson !! You will get better as you learn how to improve each time. Make sure you have the PA filled out for your state, especially if your going to meet with them.

Keep falling forward.

@Bryan K. Assuming PA means purchase agreement, I did. That said, how do you present the contract?

Do you state your offer and at the same time pull out the contract? Or do you get the verbal acceptance first and then whip it out? Lol

@Lee Smith

 Thanks for the detailed info. I do plan to start making offers over the phone for the sake of time. That's once I increase my marketing though. Just starting out, I want the full experience - every single, uncomfortable moment possible. So that I can get over any fears of the unknown. That's the only reason I chose to have the seller meet me back at the property just to make the low offer.

@Engelo Rumora

Thanks! I've actually read that blog post before. I spend a LOT of time on BP. Probably more than healthy. But just enough to be profitable soon. :)

It's safe to say that I adhered to those guidelines when I made my offer. Yay me!

If you are going to meet them have a prefilled out ccontract with you. Having a deal on your hands and no PA could be a deal killer. There are many ways to go about it.  The best is to give them something in writing to look at to show how serious you are about buying. If you do walk away with no signature have more than one way to contact them, and follow up. 

Go in with the intention of buying. If seller's on fence do verbal or email something.

Originally posted by @Nikki Robinson :

@Engelo Rumora

Thanks! I've actually read that blog post before. I spend a LOT of time on BP. Probably more than healthy. But just enough to be profitable soon. :)

It's safe to say that I adhered to those guidelines when I made my offer. Yay me!

Awesome Nikki,

Keep at it - "Nothing Exceeds Like Excess" haha

I am glad you read it.

Thanks and much success moving forward.

@Bryan K.

 Thanks for the pointers! I've been focusing on trying to sell them on my price when I should be focusing on closing the deal (getting a signature). Of course, in order to do that, the PA needs to be prominent in the negotiation. I had the agreements with me but never pulled them out to show the seller. I was thinking it was too aggressive, but it just makes sense to do that if I'm serious about buying.

I appreciate you sharing your wisdom.

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