I am strongly considering beginning to take a stab at direct mail marketing in hopes of better returns compared to whats on the MLS .
My big question is this: When you find a deal (take direct mail for instance), how do you know how to make a fair offer when a prospective seller is interested assuming you've never seen the inside of the house?
Do you guys plan a visit to see the house in person and do your rough estimate on your rehab costs and then offer at that point, or do you make a "ballpark" offer on your first point of contact and then modify this at a after you've seen the house or something else?
Very curious to hear everyone's strategy on this. I feel like I understand enough to get these off market deals, I'm just not sure how to proceed on making a smart offer when I get someone who is highly interested.
Welcome to BiggerPockets! After making contact with the sellers you should set up a meeting with them to take a look inside and best determine a good offer for the house. A rule of thumb is to offer around 60%-70% of the ARV first and work your way from up there. Before your meeting with the sellers do your own comps to find out how much other similarly specced houses are going for. Make an estimate on possible repairs and come up with your ARV. Don't be aggressive with your negotiations and try to help the sellers understand why you are making the offer you are making.
Just to clarify I understood correctly -- when you say offer 60-70% ARV first, you mean that you make this offer during your first point of contact before you meet with the owner to see inside of the house, correct?