Re: Open options. OK if I butt in with a question? - Posted by Mark-NC
Posted by Mark-NC on March 28, 2000 at 15:36:07:
Usually when I look at a home I have a good Idea of what the value is because I know the area well. So with this in mind I have a close estimate of what the property is really worth when I look at it.If I think it is priced below market value to start with it is a definate advantage.
When I talk to a seller I will ask them what their bottom dollar price would be for a cash offer. I let them tell me and usually this is what I option it for. But that doesn’t mean that’s whatI am going to pay for it even though I optioned it for that amount. What I mean by that is, say I have a buyer that comes in and the numbers look good. Now I have a deal ready to put together. I will go back to the seller and say listen I have a buyer that I can put in your home and can close in less than 3 weeks the only problem is I can’t make it work with the agreed price, would you consider an offer of xxxx? And as long as its not to far off the agreed price and not insulting they will usually take it.Many of the times this will work depending on their motivation and the fact that you really have an actual deal. If the seller says yes, we agree to tear up the option contract and write up a offer to purchase contract.
Then if the property was listed on the low side you get an appraisal for what the property is actually worth. And this is how you create your room to make money. Now, your not going to make a killing on most of your deals but it isn’t hard to make between $5000.to $10000 per deal.
As far as taking big discounts on the Notes If they are set up right you should get about 95 cents on the dollar for them on an average.
Now if you go into the property and it is overpriced to start with it is usually a waste of time, unless you want to put a sign in their yard for exposure for other deals. The thing is, you never know what will happen I have even had some people pay the discount on the Note just to get the home they want.
You just have to make things happen and work the numbers out or move to the next deal.