Advice?? Placing multiple offers, but no takers

New to Real Estate · Jacksonville, NC · Member since 2023 · 16 posts · 19 votes

Hello, I am just starting out and trying to get my first investment property. I am using a conventional loan for financing and putting down 25%. Surprisingly, (to me), I have put in multiple offers on different properties (at asking.. sometimes a little above) but the sellers choose to go with other offers. Additionally, when a REALLY good deal comes up, then I am competing with other investors that can come to the table with all cash. This is pretty discouraging for someone trying to get started. Any words of advice or encouragement? Thank you in advance!

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Eliott Elias

Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes

Be patient, do not let the state of your market change the way you run your numbers or make offers. I make 50 offers a week, I don't think twice about them. If they don't get accepted I try to negotiate a win/win, if I can't move on.

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
3y
Advice. Bid higher.
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Anne Grello
OP
New to Real Estate · Jacksonville, NC · Member since 2023 · 16 posts · 19 votes
3y
@Russell Brazil, thank you, I wish it was really that simple. I am restrained by the interest rates on the loans, the cash I have on hand for the 25% down payment and the average rents for this area. The higher bids take me into negative cash flow scenarios :/
3 Reply
Ika Sargeant
Real Estate Agent · Reston, VA · Member since 2017 · 295 posts · 163 votes
3y
@Anne Grello very tough market on the buy side. If you don't have more money to throw at them, try asking what could be of value to sellers. Check if the seller wants to stay in the home after they sell-rent back, or other tricks, anything. But ultimately most sellers want to walk away with a boat load of cash but occasionally you run into a seller who needs something other than cash.
6 Reply
Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
3y
Quote from @Anne Grello:

@Russell Brazil, thank you, I wish it was really that simple. I am restrained by the interest rates on the loans, the cash I have on hand for the 25% down payment and the average rents for this area. The higher bids take me into negative cash flow scenarios :/

Then taget cheaper properties and put a larger down payment.
The fact is everyone always views some constraint that theyve artificially put in front of them. Then a decade later everyone has the same regret they didnt buy more and get over their self imposed constraints
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3y
You are in a tough spot, going against cash buyers.
A few things you can do - 1) Offer to take it 'as-is', 2) No inspections (at least on paper :-), 3) Shorter Escrow period, 4) Shorter contingency period. In other words, do what makes it attractive for the seller, and do things that most buyers won't do.
Some of these will take you outside your comfort zone, and others may cause you to be upside down (temporarily). There is a lot more risk, but this game (RE) is full of risk and I've found that those who are willing to take the greater risk are the ones who usually come out with the larger rewards......This is true in life generally.
2 Reply
Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
Be patient, do not let the state of your market change the way you run your numbers or make offers. I make 50 offers a week, I don't think twice about them. If they don't get accepted I try to negotiate a win/win, if I can't move on.
9 Reply
Conrad Cortes
Real Estate Agent · Houston, TX · Member since 2020 · 56 posts · 34 votes
3y
@Anne Grello like Elliot said, keep offering according to your game plan. It’s a volume thing sometimes and eventually one will work.
You don’t want to change your numbers or plan based on not getting offers accepted because you may regret it if you end up with a higher maintenance property or in an area that isn’t as easy to deal with.
1 Reply
Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
3y
Look at less expensive homes or homes that have been on the market for a while. Don't over extend yourself.
3 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3y
Quote from @Eliott Elias:

Be patient, do not let the state of your market change the way you run your numbers or make offers. I make 50 offers a week, I don't think twice about them. If they don't get accepted I try to negotiate a win/win, if I can't move on.

This is critical if you plan to do this business. You need to learn the value of the word 'next'. It is a sales mind-set. Just take any negative or non-responses as nothing. Just say next and move on.
One of my best deals ever was a house I had not even looked inside (bank owned), I just drove by and threw a number at it. A few months later I got a call that my offer was accepted. Tripled the value in a few years.....
4 Reply
Anne Grello
OP
New to Real Estate · Jacksonville, NC · Member since 2023 · 16 posts · 19 votes
3y
Quote from @Russell Brazil:

Quote from @Anne Grello:

@Russell Brazil, thank you, I wish it was really that simple. I am restrained by the interest rates on the loans, the cash I have on hand for the 25% down payment and the average rents for this area. The higher bids take me into negative cash flow scenarios :/

Then taget cheaper properties and put a larger down payment.
The fact is everyone always views some constraint that theyve artificially put in front of them. Then a decade later everyone has the same regret they didnt buy more and get over their self imposed constraints

I do not disagree with you in the slightest. There is undoubtably a large degree of self-imposed constraints in my scenario. It takes some gusto to push past the uncertainty and hesitation when starting out something completely new when I know there is a degree of risk involved that could negatively affect my family, should I make a big mistake. Not an excuse for inaction, I realize that. Need to re-direct my mindset and focus more on the benefits I’ll be missing if I am caught up in fear about risk.
2 Reply
Anne Grello
OP
New to Real Estate · Jacksonville, NC · Member since 2023 · 16 posts · 19 votes
3y
Quote from @Ika Sargeant:

@Anne Grello very tough market on the buy side. If you don't have more money to throw at them, try asking what could be of value to sellers. Check if the seller wants to stay in the home after they sell-rent back, or other tricks, anything. But ultimately most sellers want to walk away with a boat load of cash but occasionally you run into a seller who needs something other than cash.

Thank you, Ika, that is a really good point and creative approach to consider!
0 Reply
Anne Grello
OP
New to Real Estate · Jacksonville, NC · Member since 2023 · 16 posts · 19 votes
3y
Quote from @Bruce Woodruff:

You are in a tough spot, going against cash buyers.
A few things you can do - 1) Offer to take it 'as-is', 2) No inspections (at least on paper :-), 3) Shorter Escrow period, 4) Shorter contingency period. In other words, do what makes it attractive for the seller, and do things that most buyers won't do.
Some of these will take you outside your comfort zone, and others may cause you to be upside down (temporarily). There is a lot more risk, but this game (RE) is full of risk and I've found that those who are willing to take the greater risk are the ones who usually come out with the larger rewards......This is true in life generally.

Thank you! Yes, the risk involved is what causes me pause in my offers, but you are right!
0 Reply
Anne Grello
OP
New to Real Estate · Jacksonville, NC · Member since 2023 · 16 posts · 19 votes
3y
Quote from @Eliott Elias:

Be patient, do not let the state of your market change the way you run your numbers or make offers. I make 50 offers a week, I don't think twice about them. If they don't get accepted I try to negotiate a win/win, if I can't move on.

Thank you for the advice, Eliott! That is definitely a mind-set I need to adopt and would benefit from
0 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3y
Quote from @Anne Grello:

Quote from @Bruce Woodruff:

You are in a tough spot, going against cash buyers.
A few things you can do - 1) Offer to take it 'as-is', 2) No inspections (at least on paper :-), 3) Shorter Escrow period, 4) Shorter contingency period. In other words, do what makes it attractive for the seller, and do things that most buyers won't do.
Some of these will take you outside your comfort zone, and others may cause you to be upside down (temporarily). There is a lot more risk, but this game (RE) is full of risk and I've found that those who are willing to take the greater risk are the ones who usually come out with the larger rewards......This is true in life generally.

Thank you! Yes, the risk involved is what causes me pause in my offers, but you are right!

I/we understand, but if you are to succeed (or even play at all) in this game you need to have that mindset. Just be smart. Ask a lot of questions on this forum.....
0 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Anne Grello:

Hello, I am just starting out and trying to get my first investment property. I am using a conventional loan for financing and putting down 25%. Surprisingly, (to me), I have put in multiple offers on different properties (at asking.. sometimes a little above) but the sellers choose to go with other offers. Additionally, when a REALLY good deal comes up, then I am competing with other investors that can come to the table with all cash. This is pretty discouraging for someone trying to get started. Any words of advice or encouragement? Thank you in advance!
this market is very hot. If house is solid you may want to waive all contingency.
0 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
this is deal when I accepted an offer:

- price higher than asking
- no contingency at all
- free lease rentback :-) LOL

And I'm selling way above June 2022's level.

I also got outbid because although I offer the highest but I clicked that loan contingency mark so seller doesn't choose me lol
0 Reply
Tyler LingleBusiness Member
Real Estate Consultant · Indianapolis, IN · Member since 2021 · 440 posts · 292 votes
3y
Here in Indianapolis I have to gather a lot of information from the listing agent. I ask tons of questions, analyze showing data, and tell my investors where they need to be to win. We usually go in above asking (if multiple offers) but also use an Escalation Clause. I also have them limit the inspection or do As Is if they really want it. Rarely do we waive the inspection though.
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2 Reply
Account Closed
Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
3y
Maybe your agent sucks. Some agents around town are disliked for one reason or another.
0 Reply
Marian Huish
Real Estate Broker · DC MD, VA & NV · Member since 2014 · 512 posts · 292 votes
3y
Are you using an agent @Anne Grello? If so, lean on the agent for advice... or get an (or better) agent to help you! If you're trying to compete by submitting offers unrepresented, that may be part of your problem in a competitive market. ...and as advised earlier, look at lower priced homes or in different markets that you can be competitive with. Best of luck!
0 Reply
Bill B.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
3y
If you are SURE you want the deal. Offer a large non-refundable EMD. A non-refundable EMD is worth more than cash because the seller gets paid when you back out. Depending on the property price "large" can be as little as $5-$10k.
Almost everyone that gets mad at sellers for taking cash offers would do the same thing if they were the seller. And even more would once a buyer falls out because they were only “kinda prequalified” or they were really a wholesaler.
The good news is it appears the housing boom is still alive and well in your market.
Ps. As far as your concern about positive cashflow. Anything less than $200/mo is basically zero. If this is a buy and hold, ignore the first 3 years of cashflow. Let’s say it was negative $100/mo. Would you have bought the property for $3600 more? I’m guessing so. You should be raising rents at least $50-100/mo every year and in many places, depending on rents/values $150-$200 might be the norm. 10 years from now you won’t remember what the nets or the cashflow were for the first 3 years. But you will remember if you could have bought it at that price compared to what it is then.
5 Reply
Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y
I've been investing a long time and have the same issue. There are still a large number of buyers with cash on hand that don't use calculators or care so much about their return. They will pay above asking and outbid you over and over again. That's just the state of the market today.
If you're serious about investing, find property in an area with less competition, find properties not listed on the market, or use other creative ideas to gain an advantage.

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Anne Grello
OP
New to Real Estate · Jacksonville, NC · Member since 2023 · 16 posts · 19 votes
3y
Quote from @Marian Huish:

Are you using an agent @Anne Grello? If so, lean on the agent for advice... or get an (or better) agent to help you! If you're trying to compete by submitting offers unrepresented, that may be part of your problem in a competitive market. ...and as advised earlier, look at lower priced homes or in different markets that you can be competitive with. Best of luck!

Thank you Marian! Yes, I am using an agent and working on networking with other investors in the area to learn more about the specific market and their successes and setbacks. Some have even been looking out for me and letting me know when a good deal hits the market!
1 Reply
Anne Grello
OP
New to Real Estate · Jacksonville, NC · Member since 2023 · 16 posts · 19 votes
3y
Quote from @Bill B.:

If you are SURE you want the deal. Offer a large non-refundable EMD. A non-refundable EMD is worth more than cash because the seller gets paid when you back out. Depending on the property price "large" can be as little as $5-$10k.
Almost everyone that gets mad at sellers for taking cash offers would do the same thing if they were the seller. And even more would once a buyer falls out because they were only “kinda prequalified” or they were really a wholesaler.
The good news is it appears the housing boom is still alive and well in your market.
Ps. As far as your concern about positive cashflow. Anything less than $200/mo is basically zero. If this is a buy and hold, ignore the first 3 years of cashflow. Let’s say it was negative $100/mo. Would you have bought the property for $3600 more? I’m guessing so. You should be raising rents at least $50-100/mo every year and in many places, depending on rents/values $150-$200 might be the norm. 10 years from now you won’t remember what the nets or the cashflow were for the first 3 years. But you will remember if you could have bought it at that price compared to what it is then.

Thank you so much for your advice, Bill! That is a really good point about the EMD and perspective about cash flow and looking at the investment for the long term. I am not angry that sellers prefer the cash offers, just wondering about how to creatively compete until I can get to that level! Thanks again for the great advice!
3 Reply
Jay ThomasPro Member
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
3y
It's important to remain patient and remain true to your numbers when investing in real estate. I personally make 50 offers per week, no matter the state of the market. I don't let outside factors influence my decisions and just trust my process. If those offers are rejected, I try my best to come up with a win-win situation for both parties, but if that doesn't work out then it's time to move on. Real estate investing takes patience and resilience, so stay focused on your goals and trust your process!
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1 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
3y
Quote from @Bill B.:

Let’s say it was negative $100/mo. Would you have bought the property for $3600 more? I’m guessing so. 10 years from now you won’t remember what the nets or the cashflow were for the first 3 years. But you will remember if you could have bought it at that price compared to what it is then.
This ^^^
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