Posted by Jim Kennedy on May 18, 1999 at 16:13:00:
I would not recommend sending a prospective buyer to do a “drive-by” until I had the property under contract. This even applies to other investors with whom I have a long-standing working relationship. The last thing I would want to do is tempt a good investor to go around me. Why test their ethics?
As for knowing what a prospective cash buyer would be willing to pay so that you know what to offer, do your homework. I don?t mean to sound harsh, but if you do a little research, you should have a pretty good idea of what a cash buyer would be willing to pay for a particular property. If you plan on flipping the property, more than likely it is going to be either to a rehabber, a landlord, or an owner occupant. They will each have different criteria with which you should become familiar.
Also, once you learn how to get comps in one area, the PROCESS is very much the same for any other area. You should be able to go into an unfamiliar area and determine the value of a property rather quickly. Your next challenge will be to determine the cost of any repairs needed. While these costs vary slightly by area, once again, with a proven PROCESS, you should be able to determine local variables rather quickly.
With this information in hand, it is relatively simple to determine what YOU can safely offer for a subject property.
When I first started out, I got the properties under contract before I divulged them to my prospective buyers. I never had the unfortunate experience of having someone try to go around me, but I have heard some unpleasant stories from others. Now that I have been in the business a while, I have learned that it would not be in my best interest to try to go around someone bringing me a potential deal. If I did, would they ever bring me another good deal? I doubt it! But do you think every investor operates that way? Why chance being cut out of a deal when it is really quite simple to learn the basics and do the deal right?
This is just my opinion but I hope it helps.
Best of Success!!