No it would not be rude. If you are not embarrassed by your offer, then you paid to much.

The numbers are the numbers. Make your offer based on the profit and return you need, and don't worry about what the bank thinks about the number. I just picked up a shortsale home a few months ago that was listed at 29K for 19K. The previous buyer had backed out and my offer was presented to the bank at the same time as he told them the other buyer had walked. So make your offer and see what they say.

It is never rude, it is business. I would question your motivation of going after a property that appears to be priced at or above retail value. If the ask price is $90k and it needs at least $10k in work to bring it to the $100k ARV, then the bank is asking over retail value after taking into consideration the cost of time and opportunity in doing the work. With that said, that does not mean you should not take a stab at this, perhaps this has been on the market for 90+ days, or perhaps it just went from pending back to active. If the seller is motivated enough, they will consider a lower offer. No motivation can equate an ignored offer or a no answer. Also, I have found that in our competitive market, the deals that just need lipstick are typically priced close or at retail and difficult to get a large enough spread to make them worth doing. You may want to target an opportunity with a heavier rehab need.

I guess you would consider me "rude" on a regular basis. I have had sellers ask me to leave right after presenting an offer. I have had them storm out of the room and slam the door. I have been called a few not-so-nice things too. That doesn't stop me. I try to deliver my offer with tact (when it is going to a person) and explain the basis for my number. If it is an REO property, I simply put the number on the paper and don't think twice. This is a NUMBERS business, plain and simple. Your number may be difference from somebody elses, but know your numbers and stick to them. You are not trying to make friends, you are trying to make money.

An example would be a market where anything 150k and under is flying off the shelves and newbies are pushing prices to 90% ltv but they are thinking it is 75% ltv. They do the rehab and make nothing or a few k and experienced rehabbers won't buy at those margins. Instead the experienced flippers focus on the 230k to 280k purchase in that market and sell for 330k to 400k getting away from the new "funny money" investors who do not know what they are doing. You get better leverage with banks when they know they only have serious buyers who will not overpay by mistake.

The bank is a professional seller disposing of hundreds to thousands of properties a year depending on their size and default levels. You will not hurt their feelings at all. Getting an offer accepted at a price that makes your flip worth while might be a different discussion all together. Many flippers I know have moved up into mid range flips because all the newbies are not overpaying for properties making the margins too slim. The mid level properties there are good buyers for you just have to put in nicer finishes and spreads are better but it takes more money to play.

Don't worry about being rude. The offer is dictated by the market. Making a market offer is not rude. I submitted an on Friday for a client that didn't get a response, no counter offer. I suppose the seller thought it was rude but, the offer was fair considering the market. The market dictates the selling price, always.

I have had a few sellers say I should be wearing a mask and holding a gun. I have said that's funny I was just thinking the same thing when you gave me your price. Other times I just say if I paid the prices everyone was hoping to get I wouldn't be able to stay in business, I would go broke but the people who put me there would just be patting themselves on the back on the great deal they made. How long would Macy's stay in business if they bought and sold at the same price. Actually M/M Seller your putting your house up for auction when you try to sell it, your asking for bids and if you don't like my bid you can just outbid me and win the auction, and that is what is going on right now, I bid what I think I can afford to pay and and hope to get by spending money and time on it. To hopefully make a reason-able profit. You can decided to outbid me and keep the property which is a good idea if you are prepared to do what I am going to do and make that profit for yourselves. Congratulations you have just bought your house back again for $________ and seem prepared to spend the time and money in hopes of getting a higher price and you have just joined me as a fellow real estate investor. You can't really lose because if you do nothing you will still have a house you own already that is worth some amount to you more than I can safely pay and maybe, just maybe, there is someone out there willing to risk more and pay more then me, I hope you can find them, good luck. If for some reason you decide you want to go ahead with our deal and I'm not tied up with some other project, I would be glad to be able to do something together with you.

I would not call it "rude." I call it "brutal" as business always is.

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Updated over 11 years ago on 09/24/2013. Most recent reply

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Jennifer HamricPoster

Taylors, SC

Starting Out

Rude?

Jennifer HamricPoster

Taylors, SC

Posted September 10, 2013 13:30

This is probably dumb, but.... If a foreclosed house is listed for $89900, would it be rude to come in at an offer of $60000 (the house needs $10k-$15k worth of work & comps put it selling at $100k after rehab)? Thoughts? Thanks!

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