Most buyers would tell you that there is never a good enough reason to buy a property without ever seeing it. But that is not true. It’s never really about what the property looks like, it’s about what you paid for it in comparison to what it is really worth. In other words, if you get the property cheap enough then you can’t go wrong. Having an “inspection and approval” clause in your offer gives you a way to back out after seeing the property. And it clearly tells you who the motivated sellers are.
But you might still want to know why not just visit the property? The answer is time and numbers. First, we will look at the numbers. Not everyone or even maybe 10% of the people who you offer a really low number to are going to even respond to you. So you might be making hundreds of offers each week on properties that could be all over the state or even the country. And out of those 200 offers you might only have one or two people who are willing to take an offer of 60-70% of their asking priced. But those people clearly want or need to sell. They will be the easiest to negotiate with and buy from. Now the time part, no one can traverse the state and look at 200 homes in a week. It’s just not a good use of time and energy. But you can go see two properties that you are going to purchase for less than ¾ of the asking price.
Of course you don’t just sit down and make an offer on the first listing that you see. You need to review a few comps, research the area if you are not familiar with it and know that the asking price is not over inflated. But you can do your due diligence from your desk and only go to the property when you know that the seller is desperate. Plug your findings into your formula and you will instantly know if this is an investment that will make you a good return. You won’t catch a lot of fish with this method but the fish that you do get will be in a barrel.
This method for locating investment properties is not for everyone. It requires a professional who knows an area and has a good feel for judging the comps and evaluating a property. But it is a system that can work if you are willing to invest the time to learn the numbers and perfect your cost formula on known properties before using this method. The profit on a property bought at such a low cost can be very enticing to an investor and can turn this process into a quest that the investor looks forward to every day. To learn more about this process and how to determine your own formula for pricing strategies for an investment property visit www.azrealestatewholesale.com.