Walk the property? Or make an offer then walk it?

[Dave G.]

Hi. I am a newb trying to put together a new deal. I have found a rehab multi that I like and believe has potential. It definitely needs rehab before anyone can move in. Im confused as to what my next steps would be. If it were not needing rehab before someone could move in I would make an offer subject to an inspection and then walk it with contractor/inspector to see where we stood. 

However, since this one needs significant repairs before hand, is it unreasonable to contact the selling agent (i don't have a buying agent) to request sometime to walk through it with a couple of guys BEFORE putting an offer on it?

That is my leading option. The next one is contacting a 203k mortgage broker to find out how much I can afford in a mortgage before making an offer on the property. But I can't get fully approved for 203k without getting bids out to contractors.

Even typing this out, I think the way to go is to see if I can look at it before submitting an offer simply to see if it is even worth my time. 

[Brian Gibbons]

Here are a few things

Seller financing with multis with investors that understands seller financing is much easier then single-family houses; no Dodd Frank when investors buying from an investor

If it needs work on a multi, and you know values well and you can price it well, don't forget you can do a joint venture with the seller, by subject to and a note, fix it and resell it, but you need to get private lender funding for the rehab

Regarding single-family homes remember this

We are here to make a profit either on price or terms

Regarding price

if we don't get it at 20% discount or more I think you're being a fool

You make the money when you buy

Think of a car dealer: 

what did they say when you try to bring your car to their lot and sell it to them?

The dealers that make the offers are pros at negotiating, and they always have a reluctant buyer attitude

"oh Mr. consumer I'd love to be able to give you all cash for your car quickly and I can usually do it within 24 hours but the number you know is not going to be a great number but will be a number that we think is fair. "

The reason why it might not be a high number is we have to pay a lot of expensed, our overhead, as in the salesperson, insurance, the lease on the building and more, and we have to price it low enough so the car will sell."

"you can probably get a little bit more if you sell it for sale by owner, but you got to deal with a lot of crap to do the paperwork and all that stuff"

See that's how you have to negotiate with the home seller so that you can go to low enough cash price?

Presenting to  the sellers

What I usually do is draw three columns on the yellow pad, and I'll put at the top "options to sell your home"

The first, traditionally selling with an agent, 

the second column selling to an investor for cash, and 

the third column selling on lease to own or selling on taking over payments 

First column goes over the costs to sell with an agent, and this includes 

commissions, closing costs, sellers concessions, holding costs on a vacant house, etc. 

making two house payments for 3 to 6 months isn't fun

Selling to an investor it really depends on how you can buy, 

do you have 

private lender money, or 

can you buy a contract for deed, or subject to, or wraparound mortgage?

If it needs work, 

do you have joint venture partner money, or 

can you do a joint venture  with the seller on a minor rehab?

These are all tools you must have in the REI toolbox to do the real estate investing business,

Dont be a one trick pony, 

be a transaction engineer