How To Negotiate For A Low Price When Buying Houses For Real Estate Investing

How To Negotiate For A Low Price When Buying Houses For Real Estate Investing

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Buy low, sell high is one of the most common expressions in real estate investing. Whereas this may sound too simple and common sense, determining the right price for your real estate investment can be tricky.

Whether you plan to sell your houses immediately or keep them for cash flow, your buying price must be low enough to make you profits.

So how do you determine the best price for your property?

Until recently, you could buy houses at 80 cents on the dollar and make a profit because the market supported it. After all house prices always went up even within a few months.

In today's market, you must expect the price to go down after you buy a property. Almost everyone who owns a house for a year or more has lost equity in it within that time.

When buying a house, you must consider this fact. Wholesale properties currently go for 60 to 65 cents on the dollar minus repairs.

Also, tenants have become more choosy since there are more houses to chose from, and are likely to go for a house with a pristine rehab job.

This has made rental prices more competitive.

When you are buying houses, it is necessary to make sure you let the seller know these facts.

so when talking to a seller, I let them understand that I have to spend money fixing it up, holding it probably for months, then sell it at a deep discount.

And chances are that I might be unable to sell it at all in the current market.

I let them know I stand to lose most of my profits when I hold it. When most sellers understand these facts, most of them relax.

Before I make any offer, I like to make this clear. Motivated sellers do not like to feel taken advantage of even though they really need to sell.

My offer then easily gets accepted even though it is low.

Why do you need to explain all this?

Currently, you must buy houses cheaper than we used to a few years ago since you have to sell them lower.

This applies also to properties that you buy on terms such as lease options. Even though you can buy higher when you buy on terms, the price must be low enough to cater for the facts above.

This way, in a year or two when you try to sell it, the price at that price will support the sale.

About the Author:
When buying houses, it is necessary to to pre-educate motivated sellers so they understand how you buy houses. It is also important to generate leads and follow up with them automatically to convert them to motivated sellers automatically. Find out how an automated real estate investing website can attract, pre-educate and deliver motivated sellers fully pre-screened and pre-negotiated so you close more deals using less time, money and e



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