One of the most important things that Larry has learned over the years is to look for the sweet spot in every deal. Not all properties are created equal, and in order to find the sweet spot for your deal you have to know what terms you are looking for and how much you can afford to pay every month to make the deal work.
But it’s more than just about what you want, it’s also about what the seller wants. You have to ask the seller one very important question “why would you want to sell a nice house like this?” You need to know the reason they’re selling.
Seller’s don’t want cash, they want what the cash will do for them. There are seven important questions you should ask to understand what the seller really wants and how to structure the deal in a way that makes them want to sell to you. Build the rapport with them before getting down to business. Don’t take too much time though, if you wait too long someone else is going to close the deal. Making sure that both parties walk away from the deal feeling like they’ve won is critical to putting a great deal together.
Do your research before buying a rental property in a new area. The companies that rent out properties as a profession are going to have the best idea of what the potential rents for a particular area are going to be, and that factors in to virtually every deal you may make. You also have to keep in mind what the highest and best use of a property might be as well. The Tricks of the Trade is a great course for helping you make an intelligent buying offer, whether it’s a rental property or a buy, fix, and sell retail deal. Get as much information as you can about an area before you make an offer so you will be better armed and can negotiate more effectively.
Finally, you have to ask yourself what the property is worth to you. If you don’t know what it’s worth to you, you have no business making an offer on it. If you need to borrow the money, where are you going to get it. You also have to keep in mind the schedules of the various tradespeople you may need to do some work before you can rent or sell a property. All the time it will take to get a property to the closing table will change your numbers. You need to know what that means for your cash flow because that will determine if the deal really hits the sweet spot or just misses the mark.