Attack Mode

I got LEAD #4 on my mind...
AND I WANT IT!

Why?
It's a duplex listed at $165,000 and should rent for about $850 per unit (so $1,700 total). Each unit is a 2 bedroom/1 bathroom, each unit is right around 1,000 square feet, and each unit has an attached garage space. It's in a good neighborhood with great schools and little crime.

Obviously, STEP 1 is to run the numbers and dive deep into the ANALYSIS.

And the numbers check out! I test different acquisition prices, see what type of return I want, understand what my MAX price would be, and email my agent immediately:

"Please submit an offer for $155,000."

Thank you,
Tyler

Within a couple hours, I got the disclosures. And...a little red flag popped up:

I'm not down with HAZARDOUS CONDITIONS, but the explanation was sufficient for me and it's something I can check on during the inspection window if I get the property under contract. So, I officially sign the Docusign documents to submit an offer. WOW! Now....it's the waiting game...

Ahhhh, the anticipation can be crippling. What will their response be? Accept, counter, reject? I keep trying to train myself to take emotion out of investing, but it's difficult. I think the only thing that will help is repetition.

Side Note: at this point, I send my lender a quick note and let them know that I offered on a property. Over communication is just a good general life tip.

Within 24 hours a counter offer comes back:

OK. OK.

We're getting somewhere. A counter at $161,000 isn't bad. I knocked the list price down by $4,000 within a day.

But, running my numbers again, I know $161,000 is still a little too much. I'm not comfortable with the ROI at that acquisition price.

*In the meantime* I alerted my insurance agent that I had a property on the hook and that I needed a real quote as soon as possible. He's amazing, and drove out to the property right away to survey it and send me photos. Seriously, if you need an insurance agent, email me and I'll introduce you to him.

So, back to the negotiation...I counter back at $158,000. At this point I know we must be VERY CLOSE to getting this deal locked up. I needed to keep the acquisition price under $160,000 and I felt this was a very strong offer.

Anddddddd......


The seller accepted!


WOop WOOp! WOOP!

Another property under contract! OK, no time to really celebrate. It's time to get to work on due diligence. Remember, always have an inspection contingency in your contracts and take full advantage of it.

​Takeaways

• ​You have to master the art of analyzing investment properties on paper. Quick analysis is key when looking for a great investment. Download my free rental property calculator and read this post.to get started!
• Having STRONG and trusting relationships on the ground is so crucial. Take the time and effort and invest in your relationships. They'll pay off in the long-run. The fact that I could email my agent on a random weekend afternoon and submit an offer within a couple hours may have been the reason I got this property. My agent could have waited a day or two to respond...and by that time...the property may have already been under contract. Who knows?
• Touching on relationships again...the strong relationship with my insurance agent was proven when he drove out to the property within hours to survey everything. It was amazing! He was the first person on my team to see the place...even before my agent!
• Just because you have a property doesn't mean your work is done. It's just begun! Due diligence is it's own animal!

-Tyler

NEXT POST: Due Diligence