Simple things like staying organized and on task can make the difference between deal or no deal. Here’s what you need to know about buying property that’s on the market.
It doesn’t matter if you’ve been buying property to flip profitably for decades or you’re just starting out, it’s always helpful to review some of the essential elements of how you conduct yourself and your business. This is especially important if you’re running your investment business in a small or medium-sized market. Why? Because your reputation will always proceed you. You might think you’re doing just fine, but if other real estate professionals in your market have a different opinion of you and your operation, you may very well be losing business – and money. Following are some key points to keep in mind as you conduct your business.
Keep your emotions out of the equation.
When buying property, the first thing to remember is separating the emotional, personal side from the business side. You might love the property and be excited about putting the deal together, but it might not make sense to buy it from a business standpoint. Maybe the numbers just don’t make sense and you should take a pass on it and keep looking. It can sometimes be difficult for people to separate what they are excited about and what they want from what fits into their business model.
Remember to stay positive.
Obviously it’s a good thing to be excited and have passion for what you are doing. This is especially important when you run into the everyday difficulties of trying to put a deal together and things don’t fall into place the way you would like. That’s when it’s very important to stay upbeat and positive.
Recognize that real estate is a numbers game.
This business all comes down to numbers. You will need to look at a ton of properties and make a ton of offers. You might be looking at as many as a hundred or more properties at any given time that you might make offers on. And then, after researching the homes and looking at pictures, you might pare that original hundred down to about 25 that you are seriously interested in, and you might make offers on only 10 of them. You will need your enthusiasm to sustain you through that process.
You should stay realistic and realize that it’s only about one house in ten that turns into a purchase. All you can do is make offers that you know will work for you from a numbers standpoint and then let the chips fall as they may. You can’t get attached to any one property because you will not know which one you will actually end up getting.
Be available 24/7/365 to look at properties.
You will need to be flexible and willing to look at homes when they are available to be viewed, even if it’s not convenient for you. You will need to be ready to look at houses on Sunday mornings or Tuesday nights, or whenever the property is available to view.
Understand that you never know in advance which house you’ll get.
A lot of times when you put offers on houses, you just don’t know which ones you will get. You can end up getting the house that you thought was least likely to go your way. You just never know. If it’s a bank-owned house you won’t know the situation at the bank and what their needs are. It’s the same thing with an estate sale. The biggest thing is not worrying about what the list price is, and not worrying about whether the offer will be accepted.
Your business model determines your offer, not the list price.
Feel free to go ahead and put in your offer and don’t worry about the list price, because that list price really has nothing to do with what your business model is. If your business model is to put offers in at a certain percentage of what you think the after-repaired value is, you should put your offer in regardless of the list price. You never know what the seller is going to accept, because you don’t know what the bank has into it. The bank might have bought the note back for pennies on the dollar and now just wants to get out what they have into the house. So don’t be afraid to put a lot of offers in on homes.
Some of these points are very basic but still essential to understand and follow. It never hurts to be reminded of a few nuts and bolts of the real estate business:
- Stay upbeat but never get emotional about a property.
- It’s a numbers game and the more offers you put in, the better your chances.
- You are never on vacation. Be available anytime to look at properties.
- You can’t predict which house will come through for you and which won’t.
- Don’t concern yourself with the list price. Make an offer that follows your plan.
You just never know when a deal will go through, but if you follow these simple rules you’ll be in great shape if and when your offer is accepted.