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Buying Below List Price – See The Forest And The Trees

REALTORS® like me have a love/hate relationship with investors.

Love:

A small handful good clients can transact enough properties to put you into the Medallion level for a city like Edmonton (40 ends or $6.5MM).

Hate:

Just one or two bad investors can make your life a living hell, take your time from other clients, making it particularly hard to give good service to retail clients and end up giving you a bad reputation.

One thing in particular I find difficult with many investors is their expectation that every property they buy will be at a discount.

Yes, it’s great to get a deal. No, you don’t need a deal every time.

If you’re an investor like me, you have a goal to acquire a significant portfolio (20+ properties) of positive cashflow real estate. It’s important that every door does positive cashflow. It’s important that you work to get the best deal possible. It doesn’t matter if you only get it for 2% below list price or market value if it still cashflows and fits your portfolio. When it works, plant the tree and move on to the next seed.

Your goal is to acquire a portfolio of positive cashflow properties – think planting your own wee forest. Your goal is not to have every single tree be perfect. This is sustainable forestry, not bonsai. Understand when a deal is good enough and don’t make your real estate professionals (and I include mortgage brokers, lawyers, inspectors and appraisers here) run all over the place for a deal you’re not willing to buy at close to list price.

If you think it’s a perfect property and you’ve got a set-in-stone price which is below asking, TELL ME. We’ll do something simple and sustainable for us both (while still having time to provide service for my other clients) such as making an offer every 30 days for as long as it takes. Your REALTOR should be able to pull recent solds and get a feel for if you’re looking at a 2% discount or a 10% discount. But if you’re looking for something that’s 20% below market and still shows well, you should take up scrapbooking instead. Then at least you get the 40% off coupon at Michael’s.

 

Photo Credit: Chiot’s Run

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