Can you negotiate with wholesalers? The quick answer, of course, is that you can negotiate with anyone.
An investor asked this question because they said that a wholesaler had overcharged them for a property and they, therefore, had paid too much for it. That statement can absolutely not be true. Do you know why?
Because – your numbers are up to you. No one else can make you overpay.
A few important activities so that you don’t pay too much for a property are:
1. Comparables – You must be able to comp real numbers to know the after repaired value. Zillow is not a reliable comping source, by the way.
2. Access – You must be able to get into the property in order to determine what repairs are needed.
3. Repair Costs – You must be able to price those repairs accurately. Just because you read online that “it costs $200 to replace a window” — does it???
4. MAO (maximum allowable offer) – Determine the most you can pay for the property in order to still be able to make your own profit. Start your negotiations below that number.
Determining and knowing your numbers is up to you. No one else can take advantage of you once you know what you’re doing. Determine your true numbers and then calculate your offer.
Know what your ceiling is and never go above that. There are plenty of deals out there for you to buy so there is no need for you to overpay. If the seller insists on a price that is higher than your MAO, move on to another property.
Yes, you can negotiate with a wholesaler, I do it all the time. I’m a wholesaler and people negotiate with me, as well. As I’ve said in the past, never think for the seller. What matters is your own numbers, so know them and stick to them.
Are you comfortable negotiating?
Read more at KarensPerspective.com