Explanation Offer Letter

[Andrew Whicker]

Hi,

First off, I tried searching but all that I came up with was 'yellow letter' type questions.

My question is this:

My offers tend to be low enough on properties that I would like to attach an explanation on how I came up with the offer. If I just throw them a number, they think I'm crazy. If I can give them an explanation, hopefully they'll feel better. It also reduces the chances of something getting mis-communicated between both agents.

So the question is, do the people that write these include details like 'I need $100 / door and 15% COC' and my mortgage payment is X and therefore...

I don't care about giving them numbers that estimate their costs, but I'm not sure if I should be so straightforward with my expected income and my expected mortgage payment, lest I lose some of my negotiation power down the road.

If it were up to me, I'd sit down with them and show them my excel sheets, but I'm an engineer so what do I know?

[Michael Brown]

Hi @Andrew Whicker:

I know this is an old thread, but I stumbled across it in my search for a template so I thought I'd add my two cents.

I very respectfully disagree with @Dion DePaoli and @Wayne Brooks. I think that a well done letter or better yet video is an excellent way to increase your odds of getting properties under contract because:

1. It is an instant credibility builder, you get seen as someone who knows your numbers and is confident in what you do.

2. It sets you apart and makes you unique from probably all other offers.

3. Proves that you are not just low balling the seller, but rather that you are a savvy investor looking only for good deals that meet your criteria.

4. Your going to do the math and due diligence anyways so put it to work for you.

5. Because other people are doing it succesfully (see article here from @Michael  http://www.biggerpockets.com/renewsblog/2015/06/29/deals-contract-negotiation-tip/?utm_campaign=June%2030th%202015&utm_content=control&utm_medium=email&utm_source=vero&utm_term=Newsletter&vero_conv=800542900&vero_id=274281