There is a difference between making an offer on a house that you are looking to flip and a house that you would buy for your own home. As you progress on your journey buying investment properties you will may also discover that the use of the property will also influence the price. For example, if you are buying a fix and flip versus a fix and rent. This is why it is key to know when you are making your initial offer what your goal is with the house. In a few rare instances you may also be able to get a house that would work in either scenario simply because the numbers are just that good, but that’s not always the case.
The strategies that I use to make offers on homes today are based upon my extensive knowledge and experience. You will need to assess your comfort level and know the potential downside for your own offers.
1. Have your agent call the listing agent
It is so rare to have someone make an actual phone call that it leaves an impression. I have also found that when you are talking to an agent it is easier to gain additional insight into any feedback they are getting on the home, whether or not there are other offers or how motivated the seller may be.
2. Waive inspection contingencies
When I submit offers we do not require a home inspection. I walk through all the properties and check the key areas before we submit the offer. This can be beneficial to a seller when there are multiple offers. It also means that once the seller agrees to the other terms of the offer they do not have to worry about the buyer coming back and asking for additional repairs or a price reduction.
3. Have your lending in place
I have approval and funds letters ready at all times. Any time there is a property that comes up that I am interested in purchasing I will submit an offer. My lending now also does not require any approval or underwriting so it can be done in a couple of weeks if necessary.
4. Timing your offer
When a house comes onto the market in a neighborhood and price point where I am interested I try to go look at the property immediately. There are agents who will intentionally price houses low to try and create interest and multiple offers. In that case, I will call the agent and ask “if I submit a strong, above list offer will you present it to your client immediately?.” If they say “yes,” then I write and submit the offer. If they say “no”, then I know that they are going to wait a few days so I will wait and then check in before the deadline to see how many offers have been submitted.
5. Know your numbers
It is so darn tempting to want to win every offer but you make your profit when you buy. Stick with the numbers and the comparable sales and don’t let yourself get caught up in the process. Also, do not rely on an increasing resale price in order to make your numbers work. Use the data from the sales today and if the market supports a higher price point when you list then you will know from the level of buyer interest.
When you are buying a house to flip there are variances in the construction and the resale side that you cannot anticipate. This is why its so important to make sure that the purchase price gives you some breathing room…just in case.
So you’ve purchased a house to flip. Now what?
Check out my tips on how to get started when flipping a house.
Want to buy a property and renovate it?
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