Real Estate Investor Magazine South Africa February/March 2019 | Page 36

COACHING
ADVERTORIAL
How to find best-
priced Property Deals
without going to Auctions
BY CARLO MARIANI
A
cquiring properties Below Market Value (BMV) is a crit-
ical part of our methodology to ‘Fast Track Your Property
Success’. The big question is; “Where are the sweet prop-
erty deals?” This is a question that eludes many property investors.
It is important to appreciate that a ‘sweet’ property deal is not
only defined by its purchase price alone, but also by the Terms
and Conditions (T’s & C’s) of the Offer to Purchase (OTP)
agreement.
Auction route
Let me admit upfront I’m not the biggest fan of auctions.
Quite a few aspiring investors believe that auctions, whether
public or sheriff auctions, are the best place to find best-
priced ‘sweet’ property deals. The reality is that many investors
venture themselves into a bidding process at auctions generally
without achieving the best results and returns. While ‘bargains’
can sometimes be found at auctions, it is more important to
have comprehensive knowledge of the inherent risks and an
understanding the T’s & C’s of bidding at auctions.
One of the main reasons for my hesitance to buy at auctions
is that I want you to write an OTP that minimizes the risk in
the deal for you, the buyer. The seller (in conjunction with the
agent/intermediary/facilitator) tends to be protected first before
all the buyer’s needs are considered. In our exclusive Property
Mastermind sessions, we show you how to change that in your
favour.
Two major risks that stand out for me at
auctions are:
• Firstly, around rouwkoop (liquidated damages) and
• Secondly, the inability to guarantee that vacant occupation
will be granted unconditionally (unattainable in many
‘standard’ auctions).
The Rouwkoop clause comes from common law.
The word is derived from the Dutch words mean-
ing ‘regret’ and ‘purchase’. In essence, it is a clause
in an agreement that entitles a party to that
agreement to pay an agreed sum of money in
order to be allowed to withdraw (or purchase his/
her freedom) from the agreement.
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FEBRUARY/MARCH 2019 SA Real Estate Investor Magazine
Terms of bidding; the high costs of evictions and litigation,
as well as the uncertainty around lending policies in
South Africa should be duly considered before bidding at
auctions.
If you are not getting BMV deals and want to look
outside of the auction arena, I would like to give three
practical tips (success hacks) and strategies for you to
implement:
Success Hack #1 – Embrace Rejection
Unless 90% or more of your OTP’s are not accepted, you
are simply offering too much for the property. Getting
properties BMV is a combination of quality and quantity
of sourcing and marketing activity. Embrace the rejection
of getting a lot of NO’s to your cheeky offers is a sure way
to move you closer towards more great property deals.
Success Hack #2 – Use the 1% / 99% rule
If you want to achieve the results that only 1% of people
achieve, then you must simply be prepared to do the
work that 99% of the people are prepared to do. How
does this powerful principle apply to find BMV deals?
Look for some of the “less travelled” places for property
listings by owners, avoid the usual large property portals
and implement simple free direct marketing strategies to
source deals before they come to market.
Success Hack #3 – Be likeable and Trust-
worthy
Renowned writer Bob Burg once said, “All things being
equal, people do business with, and refer business to
people they know, like and trust”. So how are you making
sure that you are on the ‘Black book rolodex’ of real estate
intermediaries when they come across those sweet deals
that you want? Even if you have lots of cash and/or finance
lined up it is not a guarantee of securing the deal. Always
be one of the more likeable, approachable and trustworthy
investors and ultimately you will be amazed that you will
attract many more deals to come your way.
I leave you with one of my favourite quotes, “Fix
your course to a star and you will navigate any storm.” -
Leonardo Da Vinci.
SOURCE ThePropertyCoach.co.za