During the last 10 minutes of my radio show last night I got started on a rant on the subject of knowing your offer price and STICKING WITH IT!
You can listen to that show here... http://tinyurl.com/yzfjxng.
The reason for the rant was a discussion I had with another investor who I have been helping on and off who lamented that the price she offered on a property was probably too high.
She indicated that she felt that when she made the offer it was too high, but the real estate agent suggested that if the offer wasn't at a certain number, the bank would not accept the deal. And of course the lender did accept the deal.
I have to admit that this is a very common mistake for a relatively new investor. They don't quite have the confidence they need to stick to their guns and too easily allow others, in many cases, real estate agents to talk them up from their original offer price.
The challenge now for this investor is to figure out how to get this deal assigned when the market has told her it is overpriced.
I wrote a blog post some time ago titled... "You Profit When You Buy." You can read that post here on Bigger Pockets... http://tinyurl.com/yzx3zvl.
Now with all of this information as background... here is the real message of this blog... listen closely as this is going to save you a lot of grief.
Do not under any circumstances allow others to tell you what to bid on your deals! You are the only one who can control the profit results of your deals, and if you let others participate in those decisions you are going to end up with deals that you would have been better off not even bidding on.
Here are a few tips to make sure you stay on your "game"...
1. If you have not developed purchase criteria for any deal you would make a bid on... stop what you are doing right now and develop those criteria.
2. You need to have a systematic way to determine your offer price. I talk to this in the radio show. Go listen to it and then make sure you develop the formula that works best for you.
3. Never, ever, ever, never... allow anyone... not even your rich uncle (well, OK if he is rich he may know more then you do) to talk you up from the offer price you determined is the right price for you based on the formula you developed in item 2 above.
4. Tatoo this one to your forhead... You do not have to have a deal! The more you thinnk you need a deal the higher your risk posture. Slow down, execute steps 1 and 2 and remember... some of the best deals you will ever do, will be the ones you didn't do!
And, I will leave you with this thought...
Our market today is still frought with many uncertainties. If you think for a minute that you can beat this market, get ahead of it, trick it or think for a minute it doesn't see what foolish action you are about to take... you are kidding yourself... and you will regret it.
Hey... now that I'm done with that rant... have fun taking down your next deal.
To Your Success...
Pete
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