One of my strengths is knowing my weaknesses. Sometimes I just need a little help, particularly when I’m closing deals. Usually, I defer to my CFO Mike Roth. Here are his top tips for closing deals!
Mike Roth:
1. Walk through the property and identify potential issues. You’re providing a solution to their problems: leaky roofs, old wiring, bad odors, etc. so be sure to point out EVERYTHING you see that is an issue with the house. This gives you leverage in the negotiating process, but ALSO reminds them of why they’re dumping this problem property in the first place.
2. Let them speak first and make them give you a number. That way you know what they’re thinking before you offer a price. Often we hear potential sellers saying “make me an offer” and then are disappointed or even offended by what we’re willing to pay. By asking them for their price first, you’re not only seeing if the deal will be feasible, but you’re also putting yourself in a position to counter-offer with something lower. If they refuse to give a price they’re looking for, or say they have no idea what it’s worth, start with a low offer.
3. Stay firm with your price even if that means getting hung up on it. We’re business people, and when the numbers don’t work, you need to walk away. Even if you love a house, going above the price you know you can make a profit with isn’t worth it. I often fall in love with old houses that have issues, but have to walk away because the profit margins just aren’t there. We aren’t living in these houses, we’re flipping and renting them. If your price doesn’t make sense to them, then WALK AWAY.
Those are great tips from Mike! He closes more deals on a yearly basis than anyone else in Pittsburgh, so he knows what he’s talking about. To recap – Let them know of every potential issue you find in their house, make them give you their price first, and stay firm with your offer.