An excerpt from The Doctors Guide to Real Estate Investing for Busy Professionals.
Only make offers on property you think would be good for you to own for 40-plus years. Don’t mistake this statement to mean if you are 70 years old then you shouldn’t buy real estate. Positive and growing cash flow is money in your pocket at any age. The appreciation you will get over 40 years is a nice bonus, but it is not what you are after.
Only make win-win offers. Don’t try to lowball sellers. You don’t have the time to waste on declined offers—and neither do the sellers.
Following this principle, I was able to purchase about 50% of the properties on which I made offers. That is a much better use of my time then making 20 offers to get one deal. Use a good screening process and teach your realtor well, and you will not waste a lot of time making offers that get turned down.
The other issue you must contend with in making offers is your reputation. As a busy professional in your community, you want a good reputation. You don’t want to be known as a cheapskate, a slumlord, or a wheeler-dealer. Make offers you can back up with figures and be proud of.
I have seen many pieces of real estate that were priced so high it was not worth making an offer. I often talked with the seller and told them why I couldn’t make a deal at that price. Then I said if they ever wanted to consider something near what I was figuring, they could give me a call. I never got any of those calls.
I was once in on a business deal put together by one person involving a lot of partners. There was one guy in town I thought really needed to be in on the deal. I asked him why he was not interested. His answer gave me pause. He said, “I’ve seen the kind of deals he makes and I’ll have no part of them.”
The person in question had made some deals in the past that were giving him a bad reputation. You cannot afford to tarnish your professional reputation with real estate deals that might leave a bad taste in someone’s mouth. Word gets out and bad press gets around a lot faster than good press. So keep your nose clean.
Cory Fawcett is a general surgeon and can be reached at his self-titled site, Dr. Cory S. Fawcett. He is the author of The Doctors Guide to Real Estate Investing for Busy Professionals, The Doctors Guide to Starting Your Practice Right, The Doctors Guide to Eliminating Debt, and The Doctors Guide to Smart Career Alternatives and Retirement.
Image credit: Shutterstock.com