The goal of real estate investing is not to see how many properties you can make offers on, but rather how many deals you can close. If you spend all of your time bouncing from deal to deal without closing one, you will end up frustrated and annoyed. At the very least, you will have nothing to show for all of your work. That said; the key to any successful business is maximizing time and efficiency. More often than not, the majority of the work should be done before an offer is even submitted. This includes research and understanding the numbers. Remember, closing deals is a numbers game. If you know what you want out of a transaction and a property, you will be ahead of the game.
The first step in closing more deals is knowing where you want to invest. There are many investors who have invested in the same area for years without having a lack of inventory. If you have an idea of what areas or towns are accessible, you can focus your attention without wasting time. Having a good grasp of an area will expedite your due diligence and allow you to quickly make offers on properties you really want. When a new listing hits the market, it is often the first offer that is accepted. If you have to waste a few hours driving to the property and figuring out whether or not it is right for you, it may be too late.
In addition to the market, you need to have an idea of exactly what you want out of a property. The style of the property, in addition to the amount of work needed, and purchase price all play a big factor in whether or not you make an offer. The more defined your property criteria is, the better chance you will act when the right property comes along. You may have to sift through many properties and let other properties pass, but if you are patient you will close more deals.
Trying to figure out whether a property holds value to you is often as easy as looking at comparable sales. It is not enough to just look at the price of properties sold or currently on the market, you need to really get inside of the listing sheets. You need to look at the condition and circumstances to see if you are really comparing apples to apples. The MLS can hold some valuable information if you know how to use it. If you are lazy with your diligence or don’t know how to decipher the information, you will end up making offers on properties that don’t have the return you are looking for. Instead of closing 10 good deals a year, you will end up closing 15 and still making less than you would on the 10 good ones. If you have down time, ask your realtor to send over some listing sheets and take a look at them. This information will go a long way in helping you determine if the property is really a good fit for you.
Throwing a number at a seller and sending over a halfhearted contract will not get your offers accepted. Even though time is often of the essence, you need to take the time to make sure that everything is included in the contract. If your offer lacks signatures, dates, proof of funds, an update prequal letter or your deposit isn’t significant, your offer will be dismissed. Instead of trying to make an offer and see what happens, make an aggressive first offer that will get the sellers attention. Gone are the days where you can offer low and hope that the seller counters. If there are numerous offers on a property, little things like presentation of the contract and the price you start out can help get your offer accepted over all the others.
The cleaner you can make your contract, the more attractive it is to a seller. If you are dealing with a bank owned property, you should know what they are looking for. They want to know that whatever offer they accept is really going to close and close as quickly as possible. They also don’t want to be botherd negotiating with a buyer that is looking to nickel and dime them on every item. If this is a property that you see value in, make your offer as easy for the bank to accept as possible.
If you know your market and can evaluate properties more quickly, you will focus on better deals and get more of them accepted. Even if you close fewer deals, the ones you close will be more profitable. The alternative is looking at dozens of properties a week that you really don’t want. Once you see properties that you know you want, you can make quick, aggressive offers that are more likely to get accepted.
Real estate is a numbers game, but it is also largely about time management. Going from property to property may make your day go by quickly, but it doesn’t do too much in the way of productivity. The goal should be to work smarter, not necessarily harder.
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