BY CARLO MARIANI, THEPROPERTYCOACH.CO.ZA
Most Property Investors understand that a signed Offer to Purchase (OTP) means serious business and one should never present an OTP without the understanding that this is a legally binding document that gives the Purchaser very specific rights and obligations.
But the real issue is another one in my experience; the real issue is that most investors are so scared about signing an OTP that they make one fundamental mistake that is guaranteed to put their Property Success in the slow lane: the mistake is not presenting a large enough quantity of signed Offers to Purchase.
But why are Investors making such mistake? There are two factors that in most cases contribute to this slow lane mistake:
- Struggling to define for themselves what a really good deal is, due to their inability to determine what the property’s fair market value
- Fear that one or more OTPs might get accepted leaving the investor unable able to raise the money and/or the debt finance required to take the deal to completion
Do you want to Fast Track Your Property Success? Master the Art of Writing a Profitable OTP and then be prolific at submitting signed written OTPs. Having grown up in Italy, I love comparing writing an OTP to the famous Mona Lisa painting. Leonardo da Vinci was a very prolific artist and while the Mona Lisa might look like a simple, small painting of a woman’s face to the less educated, it is indeed one of the most admired and complex paintings in art history.
So how do you go about writing your own Mona Lisa masterpiece OTP? And what rules should you follow?
Here are four practical strategies to GET MORE DEALS AND MORE PROFITABLE DEALS:
Strategy # 1 – Have your clear personal definition of a Great Deal
A great deal for me might not be a great deal for you and vice versa. There is no such thing as the perfect deal, as this depends entirely on your objectives and circumstances; having said so it is critical that you have a written, explicit and easily measurable definition of what a Great Deal looks like for you. We like to call this your Minimum Deal Standard. Not having a Personal Minimum Deal Standard is likely to result in slow lane property investing behaviours. The first one is that you will never close on a deal because you always thing you might do better, the other one is that you will close too many deals that are sub-optimal.
Strategy #2 – Use your own Offer to Purchase
I have spent many years developing my very personal Offer to Purchase that protects my rights (and the ones of my students and co-investors) first and foremost whilst being ethical towards all parties involved. I like to think about it as my Property Profit Insurance Policy…You should have this in your Success Tool-Kit especially as I share with our students and mentees not only the power of control and risk management but also the opportunities that are available when you source property deals directly from Sellers.
Strategy #3 – Stop Negotiating with Yourself or the Agent
Simple truth is that you will never buy Properties below Market Value if you do not write Offers to Purchase; a simple action that you can start taking today is to write more OTPs. Do you want to buy 1 Property? Make 9 Offers! It is indeed a ‘numbers game’. But do not write just any offer; write and present more offers based not on the asking price but on the price (and conditions) that will allow you to meet your Minimum Deal Standard.
Strategy #4 – The Money is in the Follow-Ups
In my experience very few profitable deals happen upon presentation of the first OTP or even soon thereafter; time, especially in this buyer’s market, tends to soften the expectations of Sellers; motivated sellers also have a natural tendency to believe that their problems will go away while in actual fact this is rarely the case. The more you follow up at regular and sometimes even distant timeframes from your original OTP, the more likely you are to score the deals you really want.
‘Learning never exhaust the mind’— Leonardo da Vinci.
The best time to Fast Track Your Property Success and use Property to achieve Financial Peace of Mind is not now and it is not just now, it is NOW NOW. I look forward to seeing you at one of our Property Education Events.