Buy and Hold Investor · Knoxville, TN · Member since 2013 · 450 posts · 270 votes
Questions for those of you actively buying small apartments:
1. If you make an offer on a property currently listed with a broker, are you making your offers directly to the broker or through your own buyer's realtor?
2. How much earnest money are you putting up, as a % of your offer? Would that differ if making offer through a realtor or directly to broker?
3. How are you wording your offers if you're requesting the seller finance some or all?
4. Is any of this different if you're dealing directly with the owner?
1. If a property is listed I will always get my broker involved. There is no cost to me and it protects my interests. The listing agent represents the seller. I have done a few deals where my broker was also the listing agent and acted in a dual-agent capacity - but I know my broker and knew what I was getting involved with.
2. Earnest $ for us is typically 1% +/- rounded up/down. But I've done deals with as little as $500 and as much as $20k earnest $. It really depends on the deal and how much you need to convince the seller your serious (I usually agree to place $ in escrow within 3 days of mutual acceptance).
3. Simply do a "financing addendum" and spell out the terms.
4. Not much difference working directly with the seller. It may need more explanation but can also work to your favor as you build rapport showing them how it will work.
Buy and Hold Investor · Knoxville, TN · Member since 2013 · 450 posts · 270 votes
10y
@Curtis Bidwell Thank you for your response. Are you submitting offers on purchase & sale agreements/contracts, or are you submitting on letters of intent?
Real Estate Investor · Rancho Santa Fe , CA · Member since 2016 · 323 posts · 107 votes
10y
I do all my deals mostly with my own licensed and yes i would encourage to get your agent involved for all paperwork etc 2nd i always put a good amount of earnest if is a competitive market and property, I like working threw brokers cause it makes life easier incase questions come up or problems happen.
Rental Property Investor · Olympia, WA · Member since 2014 · 781 posts · 744 votes
10y
@Chris Eaker On the size deals I'm doing a Purchase and Sale Agreement is the easiest, most direct route that doesn't get a seller confused. Get it tied up under contract then you can negotiate after inspections.
Investor · Knoxville, TN · Member since 2011 · 205 posts · 91 votes
10y
@Chris Eaker for 95% of what you will encounter in Knoxville @Curtis Bidwell has given you perfect advice. The issue for this market is simply competition - it is not like @Account Closed has in CA but there are usually multiple offers on every multi-family property under 20 units. As a small example, at every KnoxREIA meeting there are more than 10 people who are buyers of such properties. You must have detailed market knowledge and you must clearly understand your own risk tolerance. This is the reason any 2 people can look at the same property and have widely different values.
Buy and Hold Investor · Knoxville, TN · Member since 2013 · 450 posts · 270 votes
10y
Thank you for the advice, Victor Jernigan. Would you say Knoxville is more competitive than other markets? I think there's always room for one more, wouldn't you agree?