How to Low Ball Offers

[Jacob Eddy]

Is there a rule of thumb for what a low ball offer should look like?  I keep hearing that if you're not embarrassed by your offer, it's not low enough.  Thoughts? 

[Andrew Johnson]

Jacob Eddy Use a T12 to create a pro-forma and then use your desired cap-rate to back into an offer price. If it's low, it's low. If it's not, then it's priced right. Don't even look at the listing price. Analyze the property and come up with a price that's a "win" for you. Offer under that price and hope to meet in the middle. This might be a simplistic or backwards way to look at things but half the time I have no idea how people price their properties to begin with.