Every investor has done it. And it’s the worst nightmare and biggest fear – jumping in and paying too much for a property. After which you feel lucky if you get out on a “break-even level.”
What is too much and what is just right when it comes to purchasing that just-right property to wholesale? The just right price is when you have a buyer willing to pay more. It’s as simple as that.
This does not mean you should be ignorant of the property values in the vicinity of the property you are looking to acquire. This is an area in which many newbies are sorely lacking. It will be important that you know and understand how to assess prices.
One of the quickest and easiest methods is using the comparison sales method. The estimated value of a property will be based on the sales prices of recent sales in the area. The houses must be of comparable size, amenities and features.
When making these calculations be on the watch for properties that have been sold at lower prices not representative of the locale. Adjust your figures for such occurrences.
You are sizing up a property – will you or won’t you grab it?
The answer lies in your buyer list. You open your list and begin your search. When you find the willing buyer who is prepared up to pay more for this property than you will be paying, you immediately have a workable deal.
As long as you are fully aware of the property values that exist in the neighborhood in which the property is located; and as long as you have a full and active buyers list, you can be assured you will never overpay for a property ever again.
It’s not rocket science! It’s buy low and find the buyer who will pay a little more. Now you have your profit margin and you can do this every week of the year. All dependent upon your growing buyer list.