Tell us about the one(s) that got away. Here are some of mine and lessons learned.
I'm fairly new to BP, but I think I'm hooked. This isn't marketing per se, but what good is marketing if you do not land the deal. Here are some that got away from me. (The ordered list formatting doesn't seem to be working for me, so I am putting in my own bullet numbers.)
1. HUD property. 2009. Needed a very minor rehab, but I was new to investing, scared, and couldn't pull the trigger. LESSON: Be ready to pull the trigger. You get ready by educating yourself and, yes, making mistakes like this.
2. Wholesaler. 2009. Could have gotten a property for $21.5K that would have been worth $60K with a $20K rehab. LESSON: Same issue! It’s okay, there will be other deals. Keep getting educated—specifically on cost of rehab.
3. HUD property. 2009. Another one! I haven't done HUD in a while; I assume it still works the same way. You submit bids nightly and it is either accepted or rejected. Just because they don't accept your bid today, doesn't mean they won't tomorrow. I submitted (through my realtor) a bid for $52K, if I recall. Rejected. Submitted a couple more times and then stopped. I noticed one day they dropped the asking price to $50K! I figured, great, I'll offer $48K. Got outbid by someone who bid $50K. They flipped it after modest rehab for $130K!!! LESSON: Don't monkey around in a competitive situation. Make your best offer.
4.Bandit sign lead. Saw house and made an offer. Seller wanted to think about it over the weekend. Then sold to someone else that weekend. LESSON: Close the deal! Try to figure out what the objection is and what will help the seller overcome that objection.
5.Online lead. Seller already contracted with someone else by the time I got hold of them. This was good deal in a B area in the suburbs. The seller was motivated from the outset and offering the house at a great price. But they were not answering their phone. I finally stopped at the house a few days later to find it was taken. LESSON: If it is a definite deal, respond to them as soon as possible. As I heard Michael Q say in a podcast, you’ve got to settle their sense of urgency right away. I should have driven to the house immediately and if they were not there left a note saying, I am ready to buy their house at their asking price. Call me.
These are fairly representative of deals that I have lost. It basically comes down to
A. Not being educated about a market and rehab enough to be comfortable taking the deal. I can solve this by getting more educated, getting mentoring for situations that are new to me, or getting the contract but having an out and a plan in place to quickly fill in the knowledge gap—like getting contractors over to give me bids.
B. Not responding quickly enough. I’m not sure how to solve this yet. I’d appreciate any help.
C. Being greedy. I need to make my best offer, especially if I know I’m in a competitive situation. But I still try to minimize risks. A deal may be worth $10K more than I am offering, but until I KNOW that, I’m not speculating. I’ll get outbid, but then watch to see what happens with the house so I’m ready next time.
D. Not closing the deal. I need to get better at discovering what the seller’s needs are and satisfying those needs so they are willing to sign.
Yes, it stings a bit to lose a deal, but I take the lesson and move on. Here’s another lesson. If you are not losing some deals you are probably not finding any deals.