Asking sellers a few specific questions is your key to identifying potential deals quickly. Whether you are on the phone or standing at the front door, a few concise questions can get you all, or most of the information you need to make an offer. I want to know what the property is worth, the repairs, and the total debt on the property. Those 3 facts can tell me all I need to know in most cases. For example, if the sellers house is worth $200,000 but he tells you he will take $100,000, then you can be pretty sure that you can make an offer that the seller will accept. When you find a deal this obvious, you want to jump on it and make an offer immediately. On the other hand, let's say that the house is worth $200,000 and the seller is asking $190,000. On the surface there does not appear to be a potential deal. But knowing the Payoff tells you how much flexibility the seller will be likely to have (if any). When I check the mortgage records, I find that this seller actually owes $130,000 on the house. So, while he is asking a lot more than the payoff, the key now becomes how motivated the seller is or how flexible he is willing to be on terms. The point is, there are only a few critical pieces of information that you really need to be able to assess the potential of a particular lead. I use a form called a "Check List For Leads" for this exact purpose. It keeps me on track and helps me insure that I ask the right questions every time. I Start by chatting a bit with the seller, to get a little rapport going and get a feel for the sellers disposition and level of co- operation. Then I simply ask the seller the questions on my form in a normal, straight forward manner. Generally the more motivated the seller is, the more details they will readily provide. Sometimes they will tell you before you ask. If the seller is just "kicking tires" to see what someone will offer, he will usually be much less forthcoming with information. If they ask why I want to know something, I simply tell them the truth. "I have to have this information in order to find out if I can make an offer that will work for both of us". Once you have an After Repair Value, and a decent ballpark repair estimate, you can solve for my Maximum Allowable Offer. ARV X .80 - Repairs = Max Allowable Offer (for rentals) (use .65 for quick cash sales) Then make the offer and see what happens. You don't really have to know anything except the ARV, and approximate repairs in order to make an offer on any property simply by use of the formula. You will have other due diligence issues to attend to, but this is the method that many pros use to submit an offer quickly. You can always use inspection contingencies or other contract language to protect yourself. But really good deals go quickly. When you have a number of leads you are working with, such as when you are locating properties for a professional investor or an investment company, A "Check List For Leads" form will help you determine quickly whether you should eliminate a particular lead or make an offer. You collect the needed info. Then fill in the blanks provided to run your formula. You can put an offer together in minutes in many cases. To get your FREE Copy of this Form use this link: http://www.reihelp.com/checklistleads.htm Getting the correct information is the key to evaluating deals quickly and efficiently. |
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