Securing Rental Properties the Easy Way
Depending on how many real estate investors you know, one thing you will always hear is just how difficult (even in today’s market) it is to find great investment properties. One reason that may be is that many investors are looking in the same neighborhoods, same homes and in the same price points as you are. I’ve personally lost many deals because I couldn’t find time to see a property that my real estate agent recommended. It would literally hit the MLS on Tuesday morning and by Tuesday at noon, it was under contract. I couldn’t see it until late Tuesday evening or the weekend (remember, we have a full time job) and would lose out on a spectacular deal. This became so frustrating that I had to develop a plan so that I wouldn’t be competing with the full time investors who had more time and resources I had or I had to find a way to compete with these guys without being there.
Plan A- Don’t fight with the crowds. What do I mean by that? It’s quite simple really and takes next to no time and removes the crowds when you are trying to get a good deal on a piece of property. Are the only homes for sale on the MLS (multiple listing service)? Of course not. Instead of WAITING for a home to become for sale, why not try to INITIATE a sale? How do I do this? I designed a small glossy, professional postcard that I send out to neighborhoods about once every 3 months. The postcard explains that I am looking for 3bd/1bth and larger homes and that I purchase these homes quickly from folks that may be interested in selling. Each mailing, I get at least one phone call from one of these homeowners. I’m at work so I wait to return the call when I finish for the day. When I return the call, I do not talk about anything else but setting up a time to see their home in the evening or the weekend. Once I meet them at their home, I let them give me a tour and allow them to “sell” it to me. What I mean is that they take me on a tour of the house showing me all the good things so that I will want to buy it. From there, compliment them on their home and let them know you are very interested. Make sure you ask them what price they are looking for to sell their home. If the price is under the market value, get it under contract before you leave. If it is above the fair market value, have a list of current “comp sales” to help you demonstrate that the home must appraise at or below the fair market value or you won’t be able to secure financing. This tactic typically works well. But most importantly, get a signed sales contract before you leave!
Plan B- Get it under contract before anyone else does. This is a quick way to get a home under contract. Remember, making an offer does not obligate you to buy it. It only obligates the seller to consider your offer. For example, let’s say your real estate agent calls you at noon and says he found a home that fits your investment criteria perfectly. But you’re at work right, so there is no chance you can see it until much later. I made a deal with my agents to have pre signed copies of offers. All they have to do is fill out the address and price I am willing to offer. The agent sends it in, hopefully it’s the quickest and hopefully we will lock it up today, right? This technique has worked but you have to find an agent that trusts you to do this technique. You’ll need to develop a good, working relationship with your agent before they will ever consider doing this for you. But if you’re a serious investor, they will see that they would be walking away from good commissions by not handling this for you.
Negotiating Tip 110: Standard Practice
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Negotiating Tip 109: Silence: A Success Story
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Negotiating Tip 108: The Concession Mechanism
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