Real Estate Investor · Bourbonnais , IL · Member since 2012 · 257 posts · 16 votes
Hello everyone, please forgive me if this question has been answered before. As I'm reading and listening to the podcast it is recommended that you look at at least 40-50 houses before you make any offers. While I understand the reasoning behind this I'm just curious as to how many houses are you going to go look at before the realtor decides not to work with you anymore? I live in a smaller area and I pretty sure I'm going to run into the same realtors after a while.
Investor · Madison, CT · Member since 2014 · 710 posts · 458 votes
9y
@Joe D. I've never heard that number before, and it seems very, very high. If you're doing some analysis up-front, only visiting properties that have a reasonable chance of working for your target ROI, you should be making an offer as soon as you see something that works.
You're right that dragging a realtor to 40 or 50 showings without buying anything is not going to make you any friends or give you a good reputation. My only guess is that 40-50 number comes from how many properties investors see, on average, before making a purchase, but that might be just looking on zillow and eliminating it because you know the numbers aren't going to work.
My number is closer to 10, and shrinking as I get more experience and know what to expect in certain neighborhoods. I've actually made an offer on four of the last five properties I've visited. That doesn't mean that I've bought all of them. I was outbid on two, about to close on one, and hoping to get the offer accepted on the most recent one.
If you've been learning and are ready to go, don't let a silly "rule" like this keep you from making an offer. Find something that is going to work for you and jump in!
Investor · Madison, CT · Member since 2014 · 710 posts · 458 votes
9y
@Joe D. I've never heard that number before, and it seems very, very high. If you're doing some analysis up-front, only visiting properties that have a reasonable chance of working for your target ROI, you should be making an offer as soon as you see something that works.
You're right that dragging a realtor to 40 or 50 showings without buying anything is not going to make you any friends or give you a good reputation. My only guess is that 40-50 number comes from how many properties investors see, on average, before making a purchase, but that might be just looking on zillow and eliminating it because you know the numbers aren't going to work.
My number is closer to 10, and shrinking as I get more experience and know what to expect in certain neighborhoods. I've actually made an offer on four of the last five properties I've visited. That doesn't mean that I've bought all of them. I was outbid on two, about to close on one, and hoping to get the offer accepted on the most recent one.
If you've been learning and are ready to go, don't let a silly "rule" like this keep you from making an offer. Find something that is going to work for you and jump in!
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
9y
They likely will show you 3-4, then adjust their list from your feedback, and show you a few more, if nothing comes of that, your dropped like a hot potato. They are here to make quick commissions and move on to the next.
I'm a little shocked they where recommending someone look at 40-50 houses. If each house took 1.5hr with drive time, your talking over 75 hours just looking at houses and driving around. If you only did that for 6 hours each weekend, your in for 13 weekends of looking at houses... yuk.
I'd spend a lot more time insuring I was buying the right house in the right area long before I engaged an agent. Time I show up, I'd be ready to put an offer in on the house if in inside looks as expected time I got done.
Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
9y
I'm with @Kevin Siedlecki on this. Your first duty, to yourself and your agent, is to know what you're after - - why visit dome dump that doesn't fit your requirements or ROI goals?
Wen you do visit, take notes and discuss in private with your agent (btw, don't allow an agent to represent both buyer and seller; get your own). Ask, What did you think? See anything I should be aware of?
By the time you see just a handfull, you will know and it will be self-evident which(if any) you want. Now if the short list is ZERO, discuss why with the agent and see what he/she can come up with.
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
9y
The number of houses you look at has nothing to do with anything. Are you saying that if 40-50 is the number, it's better to pass on maybe 10 great deals and wait until the 40th house...even if the 40the house is the worst deal of the group?
This makes no sense at all.
Who cares how many houses you look at before you make an offer. 1 or 100. If the first deal you look at is a good one, make the offer. If the first 100 you look at stink, find another market.
If it takes you 40-50 houses to find a property worth offering on, you are about 30-40 houses past the point of where you should have realized you're looking in the wrong market in the first place.
Investor · Kent, WA · Member since 2015 · 624 posts · 274 votes
9y
I've never heard of that before. @Kevin Siedlecki is more on the money with 10 properties. I put offers on 95% of the properties I see. But I've already vetted them before I decide it's worth my time to go out and actually see it in real life.
Investor · Madison, CT · Member since 2014 · 710 posts · 458 votes
9y
@Ruth Bayang- yes, even 10 might be high. I'm getting closer to offering on just about everything I actually bother visiting, because I'm doing a better job vetting before I bother looking.
Rental Property Investor · Davenport, FL · Member since 2013 · 285 posts · 220 votes
9y
I was told through some other investor website that you should look at minimum 100 properties before putting in an offer. I thought that was ridiculous but began looking at properties anyways. Made it through about 10 before I never heard from my realtor again.
Now I find a property, drive by and look around if it's vacant, calculate numbers and give my offer price for the realtor to put in. If we get accepted, then we will go inside for a showing/inspection. No need to waste anyones time, including your own
Rental Property Investor · Davenport, FL · Member since 2013 · 285 posts · 220 votes
9y
Honestly, I think the idea behind it is to build fear and unknowns with brand new investors so they come back and want to invest in whatever expensive program offered... the guy who suggested 100 properties before even considering making an offer happened to offer $10k coaching via Skype or somehing...
Investor · Seattle, WA · Member since 2016 · 73 posts · 37 votes
9y
@Joe D. I haven't heard of that number either. However, I think you should look at as many houses as it takes for you to get a feel for the market. If you can walk into a house and say how much it can sell for, how much you need to spend in repairs, how much rent you can get, how long it will take you to find the tenants, then I think you've visited enough. I personally keep visiting open houses even when I'm not looking to buy - it keeps me up to date on what's happening.
As for working with realtors, you absolutely don't need to drag them to every house you are visiting. Just leave their business cards whenever you visit a house which you like or what to get more info about.
I actually heard that number on episode 200 of the BP podcast. I believe that Josh was the the one who said it. I actually relistened to it and he said 50-100 properties. I honestly don't know if he meant looking at properties online or physically visiting these places. I would assume most of those would be looking at them online or whatever as opposed to physically going to 50-100 properties. I do believe that I also saw that number in The book on flipping house, but I'm not sure. It's been a while since I read it.
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
9y
If I was going to give some advise, I rather you get to know neighborhoods in your area. That way when people mention a house price point, you know what it's worth in that zone without looking at it. The goal is to know when it's a steal, deal, market, or over priced.
There are endless pockets of houses everywhere, them forgotten pockets are where deals are hiding.
I spend most my days looks for new areas digitally, comping areas I don't know, and networking with others on the topic, plus keeping up with gossip on who is selling or is having money issues and may want to sell their rentals.
Every house we look at, we make an offer on, then move on to the next.
Investor · Portland, OR · Member since 2015 · 70 posts · 56 votes
9y
The rule they are talking about is referring to deals on Zillow or other platforms. Basically it says that you should analyse 40-50 deals before making an offer. The reason for this is because it will take about that many (maybe more) for you to understand your market and know a good deal when you see one. Only after you have analysed that many deals in the market should you make an offer in that market. Once you get started you will get faster and faster and know more and more about your market. Then you will know instantly when you see something new pop up that is a good deal and you can jump on it with confidence.
Rental Property Investor · Atlanta, GA · Member since 2016 · 85 posts · 49 votes
9y
I think maybe you misinterpreted the idea of the "funnel", which basically means at every step of the process, you wind up with fewer houses after weeding out the losers. ie: it doesn't seem unreasonable that an investor looking for a deal may look at 100 houses online, drive by 30, analyze 20 in depth on paper, look at 5 with an agent, make an offer on 2, and buy 1.
Flipper/Rehabber · Quincy, MA · Member since 2016 · 53 posts · 35 votes
9y
@Joe D. You need a bird dog ... an agent who understands flipping and investing and is willing to put in the time, effort and legwork to help you achieve your goals. Bird dogs are a rare breed these days.
I was a bird dog years ago for other flippers. It was a time in my career when I was younger and hungrier and willing to do a lot of legwork for little short term payback. Long term, it worked out well for me because I closed about 10 deals with one investor over a 5 year period.
As far as the numbers go, 100 per offer is waaaaay too high. When I was bird dogging for this particular investor, I got to a point where I was able to pre-screen many properties online, preview maybe 3 to 5, and pick one to show my client. By this time, I understood his priorities well enough that he'd make offers on 3 of 4 I'd show him. The market was competitive, and we'd probably succeed in buying 1 of 10 offers.
I loved doing this as an agent. It was like a treasure hunt for me, and I learned a lot about flipping from my client at the same time.
@Joe D. Do you have a real estate license? If not, maybe you should get one and do the bird dogging for yourself.
I now have a broker's license, my own company and it's a huge advantage.
Gardiner, ME · Member since 2015 · 190 posts · 177 votes
9y
I have heard that kind of figure of 50-100. Like others have said it's largely about analyzing the deal, and visiting those that make sense on paper.
But I think some people are missing the point. As a beginner you also need to truly understand your farm area. You need to understand finishes, rents, price points, features etc. You just can't do that online. Is a wine fridge a selling point in your area? Will it sell without marble counters or is that a huge waste of money?
Real Estate Investor · Bourbonnais , IL · Member since 2012 · 257 posts · 16 votes
9y
@Account Closed- I don't have a real estate license. I was working on getting my license a few years ago, but I started working too many hours and ran out of time to do the course. Maybe someday later.
Real Estate Investor · Williamson County, TX · Member since 2011 · 1k+ posts · 961 votes
9y
I agree with the above. looking at properties educates you...go to open houses and look in windows of REOs as well as use your realtor. You make your money when you buy. All properties are different..especially when 20 years old or more...and photos don't always show the differences...you need to see some properties and then see what they sell for. So on the next property you have a feel for whether you are paying market or not. You will be more sucessful if you always wait for a below market deal....margin of safety. It is hard to pull the trigger if you don't know what kind of deal youre getting and you cannot always trust your realtor...it isn't their money AND they dont make money until you buy.
Property Manager · Virginia Beach, VA · Member since 2016 · 2k+ posts · 2k+ votes
9y
I don't know what podcast you listened to, but I am guessing you took the recommendation out of context. If you were "driving for dollars" and picking houses that look distressed, your number may make sense. Looking at houses in the MLS or sellers who replied to your marketing, it makes no sense.
Real Estate Agent · Virginia Beach, VA · Member since 2016 · 29 posts · 24 votes
9y
Those numbers are outrageous to even consider asking anyone, licensed or not to take their time and resources (essentially for free) to show you. By the time it would take to look at 50 hours just to wright one offer, you'll have already lost out on the "killer deal". Many investors get the property under contract prior to even looking at the property for this very reason. If you see a deal, make a move on it. Try not to get caught up in analysis paralysis!
Realtor · Palm Beach Gardens, FL · Member since 2014 · 99 posts · 36 votes
9y
Like others have said, do most of your analysis by researching online first, then narrow it down to your favorites and go see those. If you're thinking of viewing anywhere close to that amount of properties, i would suggest to get your real estate license and do it on your own time. That's what I did, and now I've been going around to all the new listings and determining what I think it will sell for. I do it primarily for practice, but it helps tremendously when I represent a buyer since I will have already previewed most of the properties on the market.