OK, let’s get real on finding BMV deals…
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Here’s the transcript:
I’m coming to you today because I want to talk to you about something that I have been asked about So, so, so, so often… Natasha find me below market value. That’s it.
To start off with team, I’m a Chartered Surveyor. When I went through my assessment of professional competence, I was learning what valuation terms are. BMV is not there.
No one’s every said, ‘Natasha. You need to know about BMV’. It does not exist. It doesn’t exist. We’ve got market value, which is the value of the property on the date in which you buy it. That is it.
Unless you’ve got a special purchase value, in which case that’s something that’s agreed outside of the market. Probably the two people know each other or they have a deal to be done or there’s something else being thrown in with it.
So let’s concentrate on market value to start. Because we need to realize that market value, not below market value, market value deals are the deals. Market value is just the price that you pay on completion day.
So say I buy a property for £100,000 today on the 3rd of September, that’s market value regardless of whether yesterday a property that is a similar spec on the same street sold at £130,000.
Now, it may be that you have negotiated your ass off for it. And if you have, fabulous good for you, it means that there is value to be had out of that deal.
Because ultimately someone else might come along and go, well I’ll pay the £130,000. Well done you for getting it at £100,000 but it’s worth £130,000 to me. I’m going to pay that next week. Fantastic. So then the market value has changed again, right?
So now we understand the concept of market value and the, I don’t ever talk to people about below market value because here’s what it means. If you have got a value on a property, agreed that is less than the price that was paid for it yesterday, for example, you just negotiated well, right?
Or, somebody needs to sell really, really quickly, in which case the value that they need to sell up on this time is the value is the market value of that property.
Because for example, and here’s another one. Say I have a property that I need to get rid of, it’s £150,000, but I need you to buy it off of me tomorrow.
That’s it. I need you to find the money and buy it off of me. The only way that you are going to do that is you’re going to go, well, hold on a minute. And Tasha, I’m not paying, I’m not both of you for 150,000 pounds because I can’t find that money, but I will buy it off of you for £100,000 and I’ll go, okay, fine. You take it off my hands tomorrow for £100,000. There you go. That’s the price that I needed to sell it at. And you’ve got yourself a bargain.
But that was still market value.
Or, it could be a special purchase value because I’ve had to let it go reduced.
So now we’ve got, we’ve got that clear, how do you find a really good value property? That’s the question that you need to be asking, and I get it…
You’re going to be going into networking groups and you’re going to be going to property investment seminars, and everybody’s going to be talking about below market value.
Fabulous below market value or cheaper properties don’t just magic out of thin air. You don’t go to an estate agent, you’re like, Hey, I want it below market value property. They’re going to laugh you out the door.
You need to be prepared to negotiate. This is how we find below market value or cheaper properties than the current market value.
You have to know how to negotiate and the way in which you’re going to be able to negotiate is that you are going to have to come up with a solution that meets the seller’s objectives, right? If you can do that in the interim, negotiate a discount.
For example, think back to my example of I’ve got a property worth £150,000. I need it to sell tomorrow, so I’ll accept £100,000. It’s not that I didn’t want that extra £50,000. It’s the fact that my hands are tied elsewhere, so I have to take as good as I can get for it right now.
Okay, so you need to be negotiating. That is the one thing that you need to get that, but low market value or cheaper than whatever you want to pay for it, right? You need to be good at negotiating.
Negotiation starts with listening.
You need to be able to hear what the seller is telling you. What are they telling you? Why do they want to get rid of this property? Is it that they need the money elsewhere? Is it costing them too much money in tax? Doesn’t need to be a development. Maybe they’re not able to let it maybe that moving. There’s hundreds of reasons why a seller needs to sell a property and they need to sell it.
Now its your job to figure out why they need it need to sell today and actually if they are that desperate to sell, will they take £x price? So the I’m able to buy it quickly and get it off their hands and you have to be the problem solver.
No, I’m also going to tell you that not every single seller is going to accept a low offer.
They’re not. Some people aren’t desperate to sell, they don’t need to sell or they have a price in mind.
But you have to listen again because if they’ve said to you a figure they won’t accept less than, than you are wasting your time trying to go lower.
I want you to be listening to why that seller is going to sell. And then if they need to get out of a situation quickly or they need to dispose them appropriate cause it’s not working for them anymore, how can you solve that problem whilst negotiating a discount?
And that is how you are going to get those cheaper properties, which you can then add value to it. And maybe the value is simply that you buy it, you hold it, you put it back on the market. And another market player comes along and goes, yeah, I’ll buy that off of you for the increased price. Fantastic.
But again, your job is to get it cheap. Your job is to listen and your job is to negotiate and the best way of negotiating is by solving that seller’s problems that they’ve got no choice but to go, okay, you’re answering my prayers. You are the solution that I need. I need to get rid of this property. Hell yes, you take it from me, I’ll sell it to you at this price.
Okay? So that’s how you’re going to find below market value properties.
Now if you want more solutions, but how you are going to complete the end of 2019 and hit your goals, and if you haven’t done this already, please download my E-book.
download my FREE Hit Your Property Investment Goals in 2019 E-Book HERE –> https://ncrealestate.co.uk/propertyinvestmentsuccess
