How to Make Offers That (Nearly) Guarantee You Can’t Lose

How to Make Offers That (Nearly) Guarantee You Can’t Lose

3 min read
Sterling White

Sterling White is a multifamily investor, specializing in value-add apartments in Indianapolis and other Midwestern markets. With just under a decade of experience in the real estate industry, Sterling was involved with the management of over $10MM in capital, which is deployed across a $18.9MM real estate portfolio made up of multifamily apartments. Through the company he founded, Sonder Investment Group, he owns just under 400 units.

Sterling is a seasoned real estate investor, philanthropist, speaker, host, mentor, and former world record attemptee, who was born and raised in Indianapolis. He is the author of the renowned book From Zero to 400 Units and the host of a phenomenal podcast, which hit the No. 1 spot on The Real Estate Experience Podcast‘s list of best shows in the investing category.

Living and breathing real estate since 2009, Sterling currently owns multiple businesses related to real estate, including Sterling White Enterprises, Sonder Investment Group, and other investment partnerships. Throughout the span of a decade, he has contributed to helping others become successful in the real estate industry. In addition, he has been directly involved with both buying and selling over 100 single family homes.

Sterling’s primary specialities include sales, marketing, crowdfunding, buy and hold investing, investment properties, and many more.

He was featured on the BiggerPockets Podcast episode #308 and has been contributing content to BiggerPockets since 2014, with over 200 posts on topics ranging from single family investing and apartment investing to mindset and scaling a business online. He has been featured on multiple other podcasts, too.

When he isn’t immersed in the real world, Sterling likes reading motivational books, including Maverick Mindset by Doug Hall, As a Man Thinketh by James Allen, and Sell or Be Sold by Grant Cardone.

As a thrill-seeker with an evident fear of heights, he somehow managed to jump off of a 65-foot cliff into deep water without flinching. (Okay, maybe a little bit…) Sterling is also an avid kale-eating traveller, but nothing is more important to him than family. His unusual habit is bird-watching, which he discovered he truly enjoyed during an Ornithology class from his college days.

Sterling attended the University of Indianapolis.

Instagram @sterlingwhiteofficial

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Wish you could make real estate offers that guaranteed you couldn’t lose?

One of the big challenges for real estate investors today is making good offers. There are lots of potential opportunities out there, but you don’t want to be making offers you’ll regret. You don’t want to miss good deals. You don’t want to overpay and lose money either. So how do you make winning offers?

I recently published a case study on my first experience buying investment property sight-unseen. It worked out for my partner and me. It wasn’t our plan, but it worked out because we made the right type of offer.

Know Your Market

The most important factor in making great offers is really knowing your market. That means knowing property values, knowing the rents, and knowing the costs to rehab a property in that specific area. This can help ensure you don’t offer too much. It can also make sure you don’t miss a good deal by offering too little. If you know the area better than the competition, you can sometimes offer more and land the winning bid. This may be because you know how much you can really rent it for, you may recognize if local trends are lifting up the neighborhood, and you might have a strong local contractor team that can get the job done for less than another investor.


Related: How (and Why) I Offer on Properties BEFORE I Ever Step Foot in the House

One mistake that many new investors make is just firing off a lot of low-ball offers. They often do this just based on the asking price — or sometimes based on really unreliable online comp tools. That’s crazy. If a property is overpriced by $150,000 and you offer $100,000 less than asking price, you still aren’t getting a good deal. If your comp tools are poor, then you might also be losing out on a great deal that was already underpriced. Many also overlook the fact that they are burning a lot of connections by sending offers that just insult agents and sellers. You tie up their time and are not taken seriously. Then when there is a deal you really want, they might not even look at it.

Low But Educated Offers

We always make educated offers based on the numbers. That still often looks like a low-ball offer on paper, but it is an educated offer. We can back up our offers with the math. We can even accompany our offers with reasonable justification for why it is the best deal for the seller and their agent. This is completely different than just blanketing the market with blind low-ball offers.

Related: 8 Tips to Put Your Real Estate Offer in the Best Light — And Get it Accepted

Generally, we’ll come up with our number based on the worst case scenario. That “guarantees” we can’t lose. If we don’t encounter the worst case, then we make even more money than planned. That’s usually what happens. For example, if we are buying an auction property and can’t get it inspected, then we’ll assume it is a complete gut rehab job. We’ll price that into our offer. If we can get in, we’ll run the numbers thoroughly and do a detailed scope of work. Sometimes there will be things you can’t inspect for some reason. You may see signs of a leak but can’t rip open the drywall to check out if it is old or fresh, or you may be unable to access one unit in a triplex. Or there could be a situation with an existing occupant or tenant who is being evicted. Always price for the worst case scenario.


Protect Your Interests

Contract contingencies are another way to protect yourself, too. Depending on how the property is being sold and what market you are in, you might not be able to get in all of the contingencies you want, but they can still be great negotiating points. This may include the number of days you have to inspect, title reports, appraisal reports, and even financing contingencies. Find out what is typical in your area and draft your offer in way that makes it likely to be accepted, but still protects your interests.

Investors: How do you make solid offers that still guarantee you a good deal?

Let me know your methods with a comment!

You can't win 100 percent of the offers you make -- but you CAN set yourself up for success the vast majority of the time. Here's how.