What should an offer be before it’s insulting

[Cole Black]

Ok so I listened to Brandon’s podcast on buying multi family houses. I was using the rental calculator having properties amortized over 30 years. My main goal is cash flow however most properties using the 50% were generating a negative cash flow of sometimes 100s of dollars. I see two options for increasing that “forgive me I am new” I can either send in a lower offer. The best deal I could find was $189,000 to generate a positive cash flow of say $150 I would have to offer around $150,000 or raise the rent that my tenants pay. What is the better option? Would I insult the seller offering $39,000 lower? Would I irritate my tenants raising the rent after they have been there a while. I am sure that I will have to spend many more nights looking for a deal that will be worth it I am just curious on what you guys and girls have to say!

[Kris L.]

It always depends.  Some sellers might be insulted at 150 offered on 189.  Oh well, then you don’t buy from them right now.  Perhaps if it sits at 189 for a few weeks, 150 will look better then.  Or maybe they will sell it to someone else for 175 or 180 before that happens, but it’s not something you can control.  Long story short, don’t pay more than the numbers that work for you.