It is not easy to make an offer. Yes, investing in real estate with cash is the smartest way to buy but the process is not that easy at all. If you want to know How To Formulate An Offer For A House When Buying Cash read through this blog post. We’ll let you know how we do it and throw in some tips too…
You’ve Got A Property In Mind… Now What?
You’ll love these 3 strategies that many investors use daily to acquire deals if you are looking for a real estate deal to get for cash and want to know how to formulate an offer. This takes practice and of course, they won’t work for every seller so you have to test the water and practice to learn how to use them. Once you perfect them, you can use this every time to easily make offers.
How To Formulate An Offer For A House When Buying Cash – 3 Strategies To Formulate Offers
#1. Market Price Less A Percentage
The first thing you need to know when buying with cash is the market price for the property. And the first step to formulate an offer is subtracting a percentage to properties market price. You can get the market price by “pulling comps” or finding out the price of the houses that were recently sold around the area. You can partner with a real estate agent and they can do it for you or you can also do it for you. Once you pulled out the “comps” you can then subtract a percentage to formulate your offer.
For example, you can offer a market price less 20%. So a $100,000 comp would mean that you’d offer $80,000 for the property.
#2. Profit Plus
The second way to formulate an offer for a house when paying cash is the other way around. You can factor in what you can sell the property for. You have to initially figure out how much you want to make and then add your costs. This is so you can build in profit into the deal. But, this way can be a bit challenging if you don’t have an idea how to calculate your costs, so the best way to go around it is to build a relationship with a contractor who can answer your questions.
For example, if you want to make $15,000 on the property and you are certain that the property will cost $25,000 to repair then you might offer $30,000 to the seller but plan to sell it for $45,000. Using this strategy helps you think ahead to consider what you can get for the property and whether you’ll be able to make a profit.
#3. Seller Financing
No discussion about how to formulate an offer for a house when buying cash would be perfect without talking about seller financing. The first two strategies have highlighted a single sum that you would pay the seller but when you factor in seller financing into the mix, it changes everything: with seller financing, you might pay some cash and then have the seller carry the note for the remainder. This can adjust your profit point and how much you can pay for each deal.
Alternatively, you can bypass all the work and effort of formulating offers and making deals with sellers and instead to buy a property from us. We sell attractively-priced investments and have done all the hard work for you!