If you followed my advice in Chapters 10 and 11 and thoroughly researched the property and its owner when performing due diligence and if you had the property thoroughly inspected, you should have a pretty good idea as to what information you can use to help negotiate favorable terms. Here are five negotiating tools that savvy real estate option investors can use to their advantage to negotiate low-cost real estate options and below-market purchase prices on buyer-friendly terms:
Negotiating Tool 1: The obsolescent flaws and physical condition of the property, based on property inspection reports, to include repair and cleanup cost estimates.
Negotiating Tool 2: The location of the property, to include the type and condition of adjacent properties.
Negotiating Tool 3: The financial condition of the individual or business entity that owns the property.
Negotiating Tool 4: Any stigmas attached to the property that affect the public's overall perception of the property.
Negotiating Tool 5: Any condemnation orders or accumulated fines for non-compliance with building, fire, safety, and health enforcement citations that affect the property's marketability.
Over the years, I have employed Negotiating Tool 5 to buy low-cost options on properties in Tampa that had been repeatedly cited for various code violations by the City of Tampa and were on the verge of being condemned for demolition. I focus on wooden, single-family houses that can be easily and inexpensively demolished, which are located on building lots with water and sewer hookups in place. But before I buy an option, I call the City of Tampa Code Enforcement Department and speak with the code inspector who is responsible for the area where the property is located to get the lowdown on the property. And if everything checks out okay, I go ahead and use the code enforcement action to negotiate a low-cost, 60-day option and below-market purchase price with the property owner. Once the property is under option, I market the property to all of the homebuilders in Tampa who specialize in building low-cost houses.
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This book makes it easy to not only buy a home, but figure out everything that you need to do, even get a loan. In simple and easy to understand language, it talks about where you should buy a home, what to look for in a home, how to find a home, how to get an agent, how to get a mortgage and more. This is a step by step process that you, a new home buyer, can use to purchase a home.