Realtor · Dallas, TX · Member since 2013 · 11 posts · 0 votes
After looking at overpriced duplexes in Dallas, I found a great property that had been on the market 3 days. I put an offer on it for full asking price which was unusual for me since I usually start lower than asking. My strategy was to use the inspection report as leverage if I needed to reduce the price. On day 4, the seller had 3 cash offers and accepted the one for full price with a 10 day close and no appraisal. My offer had traditional 30 YR financing with 25% down. We are getting pre-approved vs. pre-qualified from the bank. My next choice had 8 offers with less than 5 days on the market, CASH won the contract. Any other ideas on how to compete for properties?
Here in Dallas you have a lot of cash buyers who will pay the full asking price with no contingency with very quick closed. With bank financing, you are looking at 30 to 45 day closed and there are some that might accept bank financing with a 10% non refunding deposit in their escrow.
Here in Dallas you have a lot of cash buyers who will pay the full asking price with no contingency with very quick closed. With bank financing, you are looking at 30 to 45 day closed and there are some that might accept bank financing with a 10% non refunding deposit in their escrow.
are you targeting a specific area, are you ok with some level of repairs, are you looking only at duplexes, please share more details on your buying criteria and then we could offer suggestions...
@Sally Peltz I understand your pain. I bought a duplex in North Dallas in early 2013 off MLS, and shortly thereafter competition went through the roof. Multifamily is very difficult in the Dallas market, you are competing with all cash investors 99% of the time. As Matt suggested, if you are getting conventional financing your only option is to be the highest bidder. Can you purchase in cash and refi out later?
The MLS is very tight. I have started doing direct mail. No deals yet, but I'm getting close. There is much less competition and you can get better pricing if you are willing to put in the time/money for marketing.
Furthermore, you have people from India that have a deep pockets that is buying in the Dallas area , and it is hard to get a good deal when they buy with cash and no contingency or weasel clause.
@Joe & Matt thanks for the input. Great ideas on higher escrow and being the highest bidder. Getting pre-approved with the bank should shave 7 days off the closing timeline. I'm in process of getting that done.
@Gautaum. I'm looking at duplexes or four plexes in Knox-Henderson, Oak Lawn, M-streets, Lakewood. I'm shying away from lower-income areas and suburbs. I have cash for 25% to 40% down, and have secured bank financing for the remainder. I have a financial analyst / business development background that helps with building the business plan. It's a tough market for individual non-cash buyers like myself.
@Andrew. I would prefer to pay cash, but don't have that as an option yet. But, I do like your idea.
Sally, you are targeting extremely competitive neighborhoods in a highly sought after asset class (duplex). You might consider looking somewhere less competitive. Is your goal appreciation over yield? I'd guess so, from looking at your target.
@ John. I'm planning on buying and holding longer term for appreciation. Yield is a secondary goal. I will expand my search area and get my real estate agent to give me listings sooner.
Da nada Sally, what I remember reading was like making an offer on a 100k property example -your offer is 100k or 5k over the next highest offer not to exceed 115k. I think a lot of sellers are going to consider the highest offer when push comes to shove.