Being a relative newcomer to the investment property world, i’d be interested in knowing just what is everyones average % that they get knocked off the price when buying an IP?
I’m not a good bargain driver, so i’ve been having someone else do my hard negotiating for me. Anyone got any tips on how to get a substantial saving off the listed price?
I’m at a stage where any reduction i can get is vital to minimise up-front costs and so on.
So go on everyone, make me jealous and tell me about the times you got 20% off an already cheap property, and better still, maybe even share with me how you went about it!
Sarah
yesterday I actually did the opposite.
I offered higher then the asking price because my offer included a vendor finance arrangement in there as well.
The property had massive potential to add value to it so I wanted to hold onto my capital to do renos etc. and do a no money down deal and extract the equity out later.I offered higher so that it would be win/win situation for both vendor an myself.
It hasn’t been accepted yet but hope to hear back later today or tomorrow.
Lets see how it pans out,
Joshua
Investor Finance
[email protected]Sarah,
We’ve had some success with securing discounted properties. It’s not as easy as people claim our success rate is 1 in 100!!! Try doing worse than that [biggrin]As Josh stated above, the trick is to find a win/win situation, in the case of obtaining wholesale properties, you need to find someonen who wants out quickly then offer a quick settlement (7 to 10 days) in exchange for 20% off the “median” market price.
We’ve found that about 1 in 100 vendors have this type of motivation, hence our poor results.
Investment Property Management
http://www.adprop.com.auHi Sarah,
I’ll tell you about my deal, and Joshua knows about this one as he did the finance for it!!
I had rung an agent to speak to him about one property which i saw had been on the market a while, and i offered a low price for it. Agent said the vendor wasnt prepared to negotiate on that one, but he did have a block of land he was prepared to negotiate on, but only if he could have a fast settlement – divorce. He had only just listed the land, it was listed for 90,000, but the agent said the vendor would take under 85k. I know the area well, and it was located on one of the best streets in town, so i knew straight up that unless there was soil problems, this was undervalued. Then the agent even came out and told me that the council valuation (which is always low) was valued at 113k!!! The agent had a written offer 20 mins later on his fax machine, and the contract signed the next day. This was key. After that, the agent received so many calls because it was so cheap! I was able to secure it at a good price because i was able to act fast, and i could meet the settlement the vendor was after. I still was able to have all my conditions too, as the vendor was happy at getting out so fast.
I see alot of undervalued properties, and if i had buyers for all of them, i would be making offers on all of the properties i find! I was fortunate enough to know someone who wanted to get into property no money down. Seeing as there was 29k equity, no money was needed to finance this deal, it covered the deposit to the bank and all closing costs, and there was equity still left over.
The only time the owner reached into their pocket was for the $1000 deposit to the agent. That was it. And it was Investor Finance that sorted out the deal, they were very good in making sure it went through.$1000 to make $29,000?
Possible to do if you are ready to take action, be brave enough to be honest with the agent, and not be worried about them not liking you ( i guarantee if you make low offers they probably wont be friendly) but this is business so dont stress about it. You also need to be able to understand the sort of clauses you can put in your contracts/offers so that if the deal turns out to be dud, you can always pull out of the deal. I had three exit options on my contract for this one, so that if the valuation didnt come back at 113k, i was able to cancel the contract. This allows you also to make low offers on properties, to see if they get accepted. What hapens if you got three accepted, but only had the finance for one? You need exit strategies. Read up on clauses you can put in contracts, safe in the knowledge you wont get yourself into trouble by defaulting on contracts. Or hire a buyers agent to do all the work for you if this seems too daunting. I know a good one if you decide to go down that path.
Read read read all you can, learn how agents work, then put them to your advantage. As Steve said once, he rings up agents and asks them if they have problem properties. He then goes about trying to find a solution for them, and makes money on the side to create that win/win scenario. Find your motivated sellers, and find out why they are selling, see if you can help them in any way. I heard of one guy who was willing to sell wholesale price but he wanted his credit cards paid out, which werent much, still resulting in profit for the buyers. Anything can be written into a contract!
Anything is possible if you believe it is.
Get out there and make some enemies with agents!!![biggrin]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
