How do I know what to offer after a quick tour of a home?

Question

I'm looking to buy my first home to invest in as a rental property, how do I know what to offer after just a quick tour of the house?

John Teachout · Answer

What we do is have an idea of what the property would rent for in decent condition. When we walk the property, we do a rough calculation of what it would take to get the property into that condition and then use that to figure a number. Personally, I take pics and notes and then go home and make up a spreadsheet to get some pretty accurate numbers. So it takes a few hours between the walk through/inspection and the offer but it's always on the same day. We make all our offers as is, all cash, no inspections, no contingencies so our numbers have to be "close". And we usually only make one offer, ie, we don't negotiate back and forth. It's a take it or leave it number.

Anthony Dooley · Answer

@Ameen Nasser You should already have a proposed offer number in mind before you view the house. I wouldn't even bother driving to a property to walk it unless I already know what I am willing to offer. Set your criteria and know your numbers. A quick view of the property should give you a rough idea of repair costs and time it will take to make ready. If you don't know what to offer, you should learn more about your market before making an offer.

Lien Vuong · Answer

You can put in an offer contingent on a due diligence period and inspection of home so you can get a full grasp of it but not let the opportunity run away from you. In a competitive market however such as Boston, that is not a very compelling offer but maybe there's less competition where you are and the seller is motivated enough to have you do that.

Greg Dickerson · Answer

You need to look at recent comps for comparable properties in close proximity to get an idea of values. If the property needs work you estimate repairs and then it’s ultimately up to you what you can pay based on the rental income if your holding or ARV based on those comps.

Tim Herman · Answer

@Ameen Nasser I am buying a used car what should I offer? You can't answer the question. There is no context. ARV? What is the asking price, How long has it been on the market. What repairs are necessary? Monthly rental? Fixed expenses? Variable expenses? How much monthly cash flow you want. How much cash on cash you want.

How do I know what to offer after a quick tour of a home?

Most Popular Reply