Many real No Money Down Real Estate Programs taught by well known instructors will teach you to go out and make 100 low ball offers to find a good priced rental property. The authors create this sensation that makes you feel like the only way you’re a successful real estate investor is if you are practically stealing real estate you’re getting them so cheap.
Many of the techniques they teach are very effective – if you have time to make 100 offers in search of a cheap piece of real estate. But, while you’re obsessing about finding that wickedly low priced piece of real estate, you are missing out on really good deals that could be putting cash in your pocket right now!
Let me give you an example of this. Together with my investment partner (who happens to be my husband), we purchased a duplex. This duplex instantly added $20,000 to our net worth and put $500/month positive cash flow in our pockets. And we didn’t do it with 100 offers.
Notice I didn’t say anything about making low ball offers, hard nose negotiation tactics or crazy clauses to squeeze every ounce of blood from the seller? All we did was look for a problem to solve.
The property was bank owned. We learned the outstanding balance on the mortgage by digging through some public records. We pulled a bunch of comparable properties and analyzed that the property was worth about $20,000 more than the outstanding balance on the mortgage.
Instead of throwing a hundred darts at a board in search of a low priced steal of a deal like most of the other bidders on this property did, we got to the heart of the banks two biggest problems. They needed to sell the duplex quickly, and they had to sell it at a price that would allow them to recover the outstanding mortgage amount. Most other bidders went in with low-ball offers and lost out on this high-quality income-generating property. We offered a quick close and a price equal to the amount of the outstanding mortgage and we had the winning bid.
This property puts $500 of positive cash flow in our pockets every month and added to our net worth the day we bought it.
As a real estate investor buying a piece of real estate, turn your attention to finding the vendor’s biggest issue and figuring out how you can solve it. When you take a problem-solving approach to real estate investing, you are more likely to create an even better deal for yourself than if you had focused only on the purchase price. And, no matter what, you’ll be saving yourself the headache and pain of making 100 different offers!
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