Offer to Closing (Investor Edition)

You found a deal. The numbers work. Now don't screw it up. Making offers and closing on investment properties has different rules than buying a home — lower offers, tougher inspections, and clauses that protect your money. This is where deals are won or lost.

Making the offer: investors offer less (and that's okay)

  • Your offer is based on MATH, not emotion. If the numbers say $110k, offer $110k — even if they're asking $140k.
  • Below-ask offers are normal in investing. Sellers of distressed properties expect them. Don't feel guilty.
  • Include an inspection contingency (7-10 days) and a financing contingency. These let you walk away if the inspection is bad or the loan falls through.
  • Earnest money: 1-2% is standard for investors (vs. 3-5% for homebuyers). Less money at risk.
  • Write a clean offer: price, closing date (30-45 days), contingencies, and that's it. Don't add fluff.

The inspection: what investors prioritize

  • You're not looking for perfection. You're looking for deal-breakers vs. negotiation points.
  • Deal-breakers (walk away): Foundation cracks, major mold, aluminum wiring, polybutylene pipes, unpermitted additions, environmental issues.
  • Negotiation points (ask for credit/reduction): Old roof (but functional), outdated electrical panel, minor plumbing issues, cosmetic damage.
  • Don't nitpick: Chipped paint, worn carpet, dated fixtures — these are why you're getting a discount. Don't ask the seller to fix them.
  • Get a general inspection AND specialized ones if needed (roof, sewer scope, foundation). The $500 you spend can save you $20,000.

Renegotiating after inspection

  • If the inspection finds $15k in repairs you didn't budget for, you have 3 options: (1) Ask for a $15k price reduction, (2) Ask for a $15k credit at closing, (3) Walk away.
  • Be reasonable but firm. "The sewer line needs $8,000 in work. I'd like an $8,000 credit or I'll need to cancel." This is business, not personal.
  • If the seller refuses and the numbers no longer work, WALK AWAY. Your inspection contingency lets you. Don't fall in love with the deal.
  • Get contractor bids for major issues. Don't guess at repair costs — get real numbers.

Closing: the investor's checklist

  • Title search: Make sure there are no liens, judgments, or ownership disputes. Your title company does this.
  • Get landlord insurance (not homeowner's) before closing. Lender will require it.
  • Review the HUD-1/Closing Disclosure 3 days before closing. Verify all numbers match what you agreed to.
  • Bring cashier's check for down payment + closing costs. Personal checks don't work.
  • Do a final walkthrough the day before closing. Make sure the property is in the agreed condition and no new damage.
  • At closing: Sign, pay, get keys. You'll sign 50+ pages. Ask questions if something looks wrong.

The Bull's closing rules

  • Never waive the inspection on your first few deals. Experienced investors can, but you need the safety net.
  • If the numbers change (bad inspection, higher costs), renegotiate or walk. Don't "hope it works out."
  • Build a team: investor-friendly agent, lender, inspector, contractor, title company. Good teams close deals. Bad teams kill them.
  • Your first closing will be stressful. That's normal. The second one is easier.

Action step

  • Find an investor-friendly real estate agent in your market (ask local investors for referrals). Interview 3. Ask: "How many investment properties have you helped buyers purchase in the last year?" If the answer is zero, keep looking.