Do you make your offer right away?

[Marilyn A.]

I was wondering how you go about making your offers. What I mean is, when you first go out to see a home, do you make an offer on the spot? Or do you go home and think about it and call them back with an offer?
Do you ever make offers on the phone or strictly in person?
Do you mention on the phone or by email when you're setting up your appointment that you're an investor and your offer may be low?
Would love to hear any words of wisdom on this as I'm considering making several offers this weekend. Well, I mean I have several homes I'm considering making offers on. If one is accepted, I will probably finish that deal before making more offers, since I have a very small amount of cash.

[Mike C]

Marilyn,

A couple of suggestions. First full disclosure: I don’t and have not ever bought a mobile home but to me RE is RE. I always make an offer on every property I look at or talk to on the phone. They may not like the offer but I always make them. Remember, your job is not to judge or decide what they are willing to take. You job is to find the facts of the deal and make an offer that makes sense to you as an investor and meets their needs. Give them options. Find out what they NEED not what they WANT. You don’t buy if you can’t find a way to make money. Period. You can’t and won’t make their problem your problem. Be honest and fair and you will have little problem. The most important criteria is their motivation level. If they are not motivated, you are 99.9% wasting your time. Why? If they are not motivated for some reason, then why would they sell it for less than it is worth or on good terms or both? Answer: They won’t. Remember that.

Don’t make it more complicated than it is. After motivation, all you need to find out is what they owe, what it is worth, the repairs and what they will take. That is it. Your fear of making offers will go away as you make more of them so don’t worry about it. If they are motivated, they will be looking for reasons to do a deal and not the other way around. It seems counterintuitive but you will see this in time. Negotiating is the best part because you never know what will happen or what they may take. If it looks like a deal, put it under contract because I guarantee that if I find a deal, I will immediately so if you wait you could lose a good one. A simple one-page contract that allows you to gracefully bow out if it doesn’t meet your needs is all you need. After it is under contract, verify all the facts of the deal. This should take no more than a day or two. DO NOT put it under contract and sit on it for weeks. If it takes you more than a few days to week at most to do your due diligence, you shouldn’t be buying anything yet. As you gain experience you will rarely not take a deal because of your mistake. It will more than likely be due to something they did: i.e. additional liens, value not there (again I know squat about mobile homes), too many repairs, or other things they didn’t tell you like not owning it, etc. As long as your contract has an inspection clause or approval of a partner you can get out of any mistakes you made in your initial assumptions if the deal doesn’t make sense for some reason. Learn from it and move on.

When asked about your experience, you have two choices. Option one; say you belong to a real estate investment group that buys up to a home a week (true if you belong to the local real estate association). Option two is come clean and admit that you are just getting started and have just finished some rather intensive training from a mentor or whatever. Which is better depends on the person. Some would rather be dealing with someone with more experience and some like a newbie because they feel they are less likely to get ripped off. Truthfully, it doesn’t matter. If they are motivated, they won’t care if you don’t get every detail correct.

Don’t let the fear of the unknown stop you. Make offers and it gets easier. Find a local mentor if you can to bounce ideas off of or review your paperwork (along with your attorney). I also recommend writing a script for you to follow in the beginning, even if in outline form. You will develop your own style as you gain experience but if you have something to follow you won’t forget something you need and you will be less nervous. If you ever get flustered because you can’t answer a question, put them on hold after saying you have another call and think about it. If you don’t know the answer tell hem you don’t know but will find out. If you totally panic and freeze, just tell them you will find out the answers to their questions, run the deal by your “partners†and call them back. No big deal.

You can also make what if offers as well. Like instead of saying I will give you X for the home you say something like "What if my partners and I were able to offer this amount and these terms, is that something you would consider or not?" Keep probing and soon they will tell you exactly what they need to make the deal. You are not making "real firm offers" just asking what if type probing questions. It may make you more comfortable in the beginning.

Best of luck to you. Make offers and you will be ok. Sooner or later someone will say yes.

Mike C