The Two Biggest Factors in Negotiating an Unbelievable Purchase Price
Success in real estate investment begins with buying undervalued property. You can’t win in REI if you over pay for investments.
Finding great deals on purchase price is really not that difficult if you know where to look and what to look for once you get there.
Imagine you go to a yard sale where the price of the items is set by how much credit card debt is associated with each item. A broom purchased a few years ago could be $52.00. A lawn mower $150.00. You get the idea and you wouldd never go to a sale like that. You would laugh all the way back to the car.
You go to a yard sale to hunt for bargains and not just for good deals, but pennies on the dollar.
Usually, the yard sale holder is moving or they are cleaning out the house to make room for something else. Whatever the reason, they are willing to almost give the stuff away. This is the same concept I have used for years when buying unwanted rural vacant land.
Here’s two tips on negotiating a great deal for yourself
- The first criteria is that the property must be debt free. Execute a well-organized direct mail campaign contacting property owners that fit your criteria.
Daily, sellers contact us to purchase their property. Several times a week, property owners contact us with property that has associated mortgage or seller financing debt. There is simply nothing we can do about purchasing that property.
- The seller really wants or needs to sell the property.
Like in the yard sale example, they need to have a great desire to sell. Accumulated back taxes can be an advertisement to the world that the owner is no longer interested in owning the property.
These are some of the ways we find cheap property and negotiate an unbelievable purchase price.
Why is there nothing that can be done to purchase property that has financing? Sure, if their equity value is less than 30% or so, than you wouldn\’t be able to purchase at a worthwhile discount to cover the loan amount.
However, say they had 50% equity and you were able to purchase at a 30% discount. That covers the loan amount and gives the seller additional consideration beyond what they owe. I could see that being a viable buying opportunity, particularly in pre-foreclosure cases (maybe this example is only applicable to residential, not land though).