New to Real Estate · Member since 2020 · 38 posts · 13 votes
I'm currently in the process of finding deals and making offers. However I'd like to be making multiple offers. I'm wondering how more experienced investors go about it. I'm investing in Alberta, Canada. Here's a list of my questions.
-As a new investor with little capital, how much earnest money should I be putting down? Does the bare minimum make me look bad to the seller? If I'm putting $5,000 earnest down every deal, I won't be able to tie up many properties.
- What options do I have to get out of a contract if multiple offers are accepted? I can currently only afford one on my own. Rich dad poor dad mentions his cat being his "business partner" and getting out of contracts that way. How do you get out contracts that you no longer have an interest in? If I can't figured out to make a deal work, what can I do to safely back out?
@Elijah Williamson Kiyosaki has lots of great nuggets of advice, but having a cat as a business partner isn't one of them. In Canada, it's called earnest money for a reason (you are being earnest in your intent to secure the property provided your terms are accepted). Your realtor will be able to provide advice on what % is the norm where you are investing. In this market, having many subjects in your offer makes your offer less attractive to the seller, and it is these subjects that gives you the opportunity to walk away from a deal. I prefer to be strategic on which properties I make offers on, instead of floating many offers simultaneously.
@Elijah Williamson Kiyosaki has lots of great nuggets of advice, but having a cat as a business partner isn't one of them. In Canada, it's called earnest money for a reason (you are being earnest in your intent to secure the property provided your terms are accepted). Your realtor will be able to provide advice on what % is the norm where you are investing. In this market, having many subjects in your offer makes your offer less attractive to the seller, and it is these subjects that gives you the opportunity to walk away from a deal. I prefer to be strategic on which properties I make offers on, instead of floating many offers simultaneously.
I would just do one at a time as well. Pick the best property and put in an offer. In residential, the condition removal period (ie. time for you to get your inspection and financing approved) is about 7-10 days. During this time you either remove conditions and buy it or you move on. That's not a long time to have something tied up. Do you really need to make multiple offers in the same week?
Be more specific of the investment deals you are looking for so you don't waste your time. If you put even $5K of earnest money in, that could get tied up for a couple of weeks, as the seller could instruct their lawyer or broker not to release the funds. I have done deals with $0 earnest down, so it depends on the conversations you are having with the seller. Good luck
You can’t technically be pre-qualified for an investment property. Principle residence? Yes. Revenue property? No.
Ok maybe that’s not the right word, but a mortgage broker can look at your financials and tell you how much you can afford / max loan you can expect to get.
Why do you need to make multiple offers? Deposits are put down when the offer is accepted. It shouldn't take that long between making an offer and having it accepted or rejected. Do one offer at a time. I bought a place not that long ago in Alberta and while it was busy, there was no need to do multiple offers simultaneously.
You can get pre positioned. That’s it. They’ll look and in 5 min or less evaluate your likelihood of funding/ their desire to handle the file. And when you get to 4 properties, you’ll need an extremely talented and experienced broker. Likely less than 1% across Canada can fund 5+ in a personal name currently.