How should i present offer on my first investment?

Question

So i am really really really new to investing in real estate. There is property right down street from me that has been sitting vacant for decades. I was able to get a hold of the owners son, who lives in another state. We have been texting every so often and got to the point in conversation where he asked me to come up with a scenario for renting to own or buying. I asked his permission to go on the property and got a contractor i know to do an estimate as to the cost of the rehab. My question now is how should i present my offer to him? Should i make it look as professional as possible? Should i have a real estate agent before i discuss an offer with him? Should i just text him what i would offer? Any idea would be helpful. Thanks!

Corey Hawkinson · Answer

@Aaron Fletcher I believe I remember your previous post, or I’m crazy. The property is somewhat neglected and the owner previously used it almost as a cabin? But they haven’t been up to the property in a few years? If that’s correct, I’m happy to see that you’re taking further action.

I would keep all interaction professional but friendly. If they have not been to the place in years and the son is primarily in charge they likely do not have an emotional attachment to the property. It is possible that they just want to get rid of it without much hassle. Offer a fair deal, but something that will obviously leave you plenty of room for profit.

Mitch Smith · Answer

Hey @Aaron fletcher

What is your exit strategy with this property? Are you looking to flip, buy and hold or use as a primary residence.

Your question regarding an agent is an interesting one. I am not advocating doing this on your own but let me just say that I bought my first investment property 2000 miles away with no agent. Did you know that your local office supply store sells a package of 25 Real Estate Purchase Agreements? 🤔 I am not advocating using these basic agreements but simply making a point.

Most people are so stuck on having an agent because they think it is required. A title company or an attorney can do the closing for you. And, most sellers are not looking to pay an agent for both sides of the transaction if the property has been sitting for awhile. It may give you a better shot at acquiring the property. Don’t get me wrong, I use agents every day in my business but they are definitely not required. That being said, an agent can definitely guide you and help to make sure you are protected if you are not comfortable with contracts and doing it on your own.  Besides, the agent is a free service to the buyer.

In the end it comes down to YOUR comfort level. Just know you have options.

Good Luck. Feel free to reach out with questions.

Mitch

Aaron Fletcher · Answer

@Mitch Smith

Hey Mitch my first priority is to purchase it and fix it up for my father in law to live there. Pretty much rehabbing it enough to where it's comfortable and safe for him. Then if something happens where he doesn't end up living there. Possibly renting it out to someone else. Or if renting is not going as planned. Flipping and selling would be my last option. I had a contractor friend walk through the other day and he's amazed that no one has found this place. I feel like there is a lot of opportunity for it to be something great for someone.

Aaron Fletcher · Answer

@Mitch Smith

Thanks Mitch! Would you recommend using an agent on something like this?

Aaron Fletcher · Answer

@Corey Hawkinson

Hey Corey, Yeah lol ive probably posted a lot since I found this site. Trying to not get too attached to this property. But also trying to have fun with it and see where it goes. Either way it's pretty exciting.

Mitch Smith · Answer

@Aaron Fletcher

Hey Aaron. Congrats on making progress on a potential offer. One of the things that was challenging for me to learn as I first got started was that an offer is simply you, reaching out your hand and saying "OK this is what I'm willing to pay, let's open negotiations." I think often times new investors get caught up thinking that they make an offer and now they're stuck buying a house that they potentially don't want. If you plan on using an agent for this transaction, please make sure that your agent builds in all the proper contingencies and due diligence periods that allows you to exit the transaction in the event that something would come up in title or the inspections. And please, always, get a good solid inspection with every Property that you are serious about purchasing. Good luck, and please feel free to reach out if you have any questions.

Mitch

Aaron Fletcher · Answer

@Guifre Mora I'm not sure if legally he can make a decision on it.

Guifre Mora · Answer

Aaron,

Get an agent so you are represented have him send an official offer- with a strict timeline - Remove the relationship from the transaction. Strict business. If he is the son of the owner is he in a position to make a legal decision on the property?

How should i present offer on my first investment?

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