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Its Not Just About Price When You Are Buying Real Estate
Many real Real Estate Investing Courses taught by well known gurus will teach you to go out and make 100 low ball offers to find a good priced piece of real estate. 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 rental property you're getting them so cheap.
If you have time to make 100 offers in search of a cheap rental property then their techniques are probably going to work well for you. But, most of us have very little time ... and while you're wasting yours running around placing dozens of offers of dozens of houses you're 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.
The seller had two problems. They had to get rid of the debt, and they had to sell the duplex at a price that would allow them to recover the outstanding mortgage amount. Most other bidders were seeking that super low price property and went in low offers. as a result they lost out on this high-quality income-generating property. But we offered a quick close and a price equal to the amount of the outstanding mortgage and we had the winning bid.
This property makes us $500 every month and added to our net worth the day we bought it.
As a real estate investor buying a rent house, turn your attention to finding the vendor's biggest challenge 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!
About the Author Learn how to buy financial freedom, cash making investments and wealth creation with tips with your free Real Estate Investing Starter Tips Guide. Get real estate invest tips like: How to find rental property, resources and steps for renting out your property, and making cash with real estate from Julie's weekly real estate investing newsletter.
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