My students have been coming to me with a lot of deals lately that are, unfortunately, not good deals. And it’s because their offers are too high. So today, I want to talk about the best ways to make cash offers.
I get it. The markets are super hot right now, and it can be intimidating to try and make a cash offer. But guess what? You have to get out there and do it. The number one rule in real estate isn’t location, location, location: it’s make offers, make offers, make offers.
95% of offers get rejected. I like to say that if you haven’t made somebody mad by noon, you’re either not marketing hard enough, or your offers are too high. We’re in this business to make money, and that means getting properties for the lowest possible offers.
So, how do you do this? There are two ways. First, you use a time-tested formula called the Maximum Allowable Offer or MAO formula. I break down exactly how it works, and show you how to use it in different areas. The second method works especially well on properties that need a lot of updating, and it involves getting the average of the lowest comps sold in that neighborhood, and working from there.
It’s also really important to make yourself a list of minimum criteria that you need for a good deal, and don’t stray from it. Trust me, bad deals are worse than no deals!
Listen and learn:
- The number one rule of real estate: make offers.
- How to use the MAO formula to calculate cash offers in different areas.
- The Average of the Lowest Sold formula.
- Make a list of rules and stick to it: bad deals are worse than no deals.
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