The scenario is familiar to every commercial real estate investor who has been around for any length of time. The perfect property is up for sale, and you have plans to restore, renovate, or repurpose it to generate revenue. You make an offer to the broker or property owner, and get ready to sign the closing papers. Suddenly, the phone rings and you are told that another property investor made a slightly higher offer. Suddenly, you are in the middle of a bidding war, and the ball is in your court. What should you do?

1. Stay within your budget

Set a maximum budget when bidding on properties, and do not exceed that amount. It is very easy to to think the other person’s offer is not that high, but if a bidding war goes back and forth, that “little bit more” can easily break your budget.

2. Have a backup plan

Scope out the neighborhood and check the listings before making an offer. Property investors do not like bidding wars, but having other properties in mind can make it easier to walk away, not to mention less expensive.

3. No property is perfect

If it helps, remind yourself of the renovations you have to do to make that property “perfect.” Remember that each time a new amount is offered, that amount eats into your rehab budget. No property is perfect, and there is no shortage of opportunities in the market.

4. There is only one winner

Bidding on properties only benefits the seller. If the seller can get two or more investors competing for the same property, they may end up selling for more than the property is worth.

5. Cash is king

If you want to make a strong first impression when bidding on properties, make an offer in cash. Other people may want to make higher offers, but they will have to scramble to come up with the funds. Cash is the easiest way to secure the property you want, without any competition.

To get the financing you need so you can get the property you want, contact the team at Golden Century Lending.