risk

[Joseph44 0]

Hi Everyone,

I have a prospect for a l/o. He just e-mailed me and asked what am I willing to risk for the performance of this contract? I'm assuming he is referring to how much money I'm putting in. Did anyone ever have this question asked of them? If anyone has how did you respond to your client? Thanks all in advance, and have a great day!!

[Doug Pretorius (ON) 9]

I've never heard the question phrased like that before, but I have had one or two people ask if I'll be putting any money down, if that is in fact what he's asking. You'll have to ask him to clarify what he's referring to, it's dangerous to assume anything.

 

It's been awhile since I was asked about putting money down and I'm trying to think how I responded... probably something like: "What did you have in mind?"

 

In general I'm willing to make concessions in exchange for other concessions from the seller. NEVER give them something for the sake of the deal alone, there are far too many deals to start caving into sellers demands without getting something in return.

 

For example, I made an offer yesterday and the seller asked if I would consider sharing 50% of the appreciation. I said I would, in exchange for lowering the rent. So I increase my cash flow and they share in the appreciation, seems fair to me.

[MichaelC 160]

Joseph, it sure sounds like he wants to know how much option money you're putting down. Of course, you should ask to be certain.

And sure, we've all been asked how much money we are putting down. And when I am asked that, I know immediately I am not dealing with a motivated seller, and I may very well be speaking to another investor. If so, I figure too many cooks will spoil the broth and there isn't any room for me in the deal. Like Doug said, no need to cave in to demanding sellers, especially in light of a changing real estate market.