I finally pulled the trigger and put in my first few offers but haven't had any luck yet. I'm feeling a little discouraged (don't worry, I'm no where near giving up!) and was just wondering 1) how many house did YOU look at before you put in your first offer? 2) how many offers did you put in before you secured your first house?
@Okeoma M. The very first one. But that's because I found a motivated seller and solved his problem.
It's hard to find a deal by looking at the house first. You should focus on finding a motivated seller first. Let me illustrate:
Your current approach:
Step 1: Look at 100 houses
Step 2: Make offers on 10
Step 3: Maybe get a counter offer from 1 motivated seller
Compared to the approach of virtually all successful investors which looks like this:
Step 1: Find 100 motivated sellers
Step 2: Create solutions for their specific problems
Step 3: Qualify the properties and probably buy at least 50% of them
Not enough. I too got discouraged from the rejections and uped my offers. In hindsight I paid too much.
Don’t get discourage, it truly is a numbers game. Also you are just starting out so there is a lot of excitement on your part, however no one else seems to share the same sentiment as you do. For myself things changed when I started to understand the mindset of motivates a seller. My suggestion is to find listings about to expire (6 months, the seller is tired and more motivated than first listed). The listing agent is also very motivated based on the amount of time spent working this property knowing that their hard work may not pay off literally. If you are pre-qualified, and have your team in place you will find a higher success rate.
Presenting offers is like sales 101. People will say “No”, just don’t take it personally, they are saying No to what you are offering and not you personally For every No you receive, gets you closer to a Yes. I know it’s easy to say but after presenting hundreds of offers and have gotten my share of No’s or in many cases no response at all you learn it is all part of the process.
It took me only 10 yellow letters hand written and 3 call backs, then one offer to get a deal. @Doug Pretorius has some really great advice here. The house is not really what matters by any means. It could be a house that is completely fine and needs no repairs, or it could be a 2 bedroom shotgun house that needs $50k in repairs. The focus as a real estate investor should be on the numbers and the seller's motivation. The house could be horrible, and you could have tremendous upside if you go in and renovate, or wholesale to a flipper, but if the seller doesn't care about moving or doesnt have a "problem" that needs solving, it is unlikely you will get an accepted offer. OR - You need to do some more digging with seller's pain points and like Doug said, come up with solutions.
My first four offers were accepted. I was too concerned about the perception I was making with my offer and I did not go low enough. Do not be afraid to hurt someone's feelings!
We offered about 6 times before we bought our first one. Like some others on here we also overpaid for it. HOWEVER, I am glad we did finally pull the trigger and do a deal or I may never have started.
Thanks for all the great advice. So far I've been diligent about sticking to my numbers, but keep getting beat by cash offers. Since I'm investing from out of state, I'd prefer to start with homes that are move-in ready. My strategy has been to look for (1) flips that have been on the market for awhile and (2) otherwise decent homes that have had frequent price reductions. My biggest fear is that I will get swept up in the process and overpay so it's nice to hear that others have overpaid and stayed in the game!