Investors – Become An Expert At Negotiating Wholesale And Retail Properties


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Investing in wholesale properties and retail properties has become a lot trickier than it used to be. Every wholesale and retail investor is both a buyer and a seller and the selling side of things has gotten a little tougher in recent times. In order to make any reasonable profits in this business, the need for investors to keep their offers at a minimum has become absolutely paramount. A threshold maximum has to be established by an investor who is considering making an offer on a property. What goes into determining this maximum value?

The most important factor that investors of wholesale properties and retail properties use to determine their offer is the expected selling price. For retail investors, this value is heavily influenced by the after repair value (ARV) and the repair costs. Wholesale investors who would normally sell to retail investors may have to also factor in an assignment fee that enables them to transfer rights and responsibilities to another investor. To get an ideal estimate for an offer, an investor should deduct these expected costs from a fraction of the expected selling price or ARV, in the case of a rehab property. The fraction should be small enough to allow a comfortable cushion for absorbing any loses. Experts generally recommend about 65% of the asking price.

Even after determining a good offer price that accounts for all costs and profits doesn’t mean that this offer will be accepted. Before making an offer, an investor should seek a seller’s motive for selling to determine their level of motivation. By having a sense of how motivated a seller is an investor can safely gauge how low of an offer they can give. It is generally never a good idea for an investor to present their maximum offer as their starting offer. Normally, most sellers reply with a counter offer, so an investor’s initial offer has to be low enough to allow for some negotiating room.

Determining a good maximum offer for investors of wholesale properties and retail properties is an important first step in negotiating a deal. Starting bids should always fall below this pre determined maximum bid but shouldn’t be so low that a seller loses their motivation to sell or becomes disgruntled and discontinues negotiations. Finding out a seller’s motive to sell can be a guide to setting a reasonable minimum starting bid. Don’t get caught in the heat of negotiating, stay under the maximum price set and don’t get emotionally attached to a property.

Asking questions with these tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

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