If You Don’t Know These 6 Things, DON�...

offer You know what they say about assuming, right?

It makes a you-know-what out of YOU and ME.

So don’t assume – or guess – anything when it comes to making offers on properties.

Jamel Gibbs here, back to share 6 things that you need to know to determine if you should make an offer on a property – or not.

You need to consider 6 things before making an offer.

Let me get right to the point…

Without knowing the answers to these 6 key questions, you should NOT make an offer on a property. Period.

If you attempt to make offers without knowing what you’re getting into, I promise that you will waste precious time, energy and money. So stay with me here to learn what the 6 key questions are and how to apply them to each of your properties to determine if you have a deal or not.

Question #1

What is the asking price on the property and the amount owed on the mortgage?

Not knowing the answer to this question is like shooting in the dark.

I can’t tell you how many times investors, students and motivated sellers don't know the answer, and it blows my mind!

Not knowing the asking price and what is still owed on the property can result in paying way more than you should.

Ask yourself this question – would you buy a car without knowing the price first? Enough said.

Question #2

What is the After Repaired Value (ARV)?

How can you make an offer without knowing what the house is worth?

Short answer – you can’t!

If your seller is asking $120,000 for a home that’s actually worth only $100,000, do you have a deal? Of course not!

So know the ARV before you make an offer, please and thank you!

Question #3

How much work does the property need?

Knowing how much work and money you will need to invest in a given property will help you determine its true value.

And here’s my key formula to accurately determine how much to pay for a property:

ARV x 65% - Repair Cost

Question #4

What is the seller’s motivation level?

motivagtion You’ve got to create a win/win situation for both you and the motivated seller – but first you need to know just how motivated (or not motivated) your seller actually is.

I get calls all the time from so-called motivated sellers who are really just fishing for offers. They aren’t quite ready to pull the trigger, but they want to know how much they can get. These aren’t the fish you want to catch – at least not right then and there.

So, you weed out those who aren’t truly motivated, and dig deep to find sellers who not only want to sell – but NEED to sell.

Question #5

What’s the best cash price the seller will take?

Rule #1 with this question: Only ask this if there is a spread of at least $30,000.

If there is a large spread - find out if the seller is willing to go lower, and find out just how low he/she can go. This will help you make an appropriate cash offer.

Question #6

Is the seller flexible with terms?

I’ve got another disclaimer here for this one: Only ask this question if there is LESS than $30,000 in equity on the property.

If the ARV is $100,000, and the asking price and amount owed is $80,000, you’re looking at $20,000 in equity, right?

In this type of scenario, ask the seller if he/she can be flexible with their terms. Maybe they will consider a lease option or another creative form of investing that will be more beneficial to both of you in the long run.