Bid strategies?

14 Replies

Hi.  New here.

We've put two offers in.  We were outbid on the first one and I expect to be outbid on the second one too.

The problem is, Tampa's a hot market, and these REO's are being snapped up by either occupant-owners or investors who don't need to make a profit.

I'm a realtor and my husband has a construction background, so we know about how much the properties will cost to rehab, and how much they should sell for.  We put in the highest bid we can and still make a decent profit, but so far nothing.

What kind of strategies do you all use to get your offers accepted?

I have access to a pre-foreclosure list and plan to start working it next week.  Any other ideas?

Know the sellers situation! We have gotten many deals won even though we weren't the highest. Now we weren't 10% off either but having a large enerst money, quick close, etc. Has helped us win. So make your offer "extremely" solid and you would be good to go.

That being said if you are competing with "personals" you are going to have alot of trouble winning as a flipper. Remember these people don't need a profit margin. We tend to buy houses that "turn off" the first time home buyers with a nasty crack (really a benign crack) etc. So go after the ugly but nice houses. You might need to find a wholesalers, etc i fthe neighborhood too hot.

You could ask the listing broker to present your offer only to give you a little leverage, but it has its own problems, if another offer comes higher and he has to present, than you don't have the leverage you had with your commission to get your deal accepted.

All I can say is, try harder.

"Always want a deal never need one."

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no your numbers and stick with them. You win some and lose some. All the people that are paying to much will be out of business before to long. I get my number and "let it rip tater chip".  Keep pressing you will do ok.

Thanks.  

Morry - "Always want a deal never need one." I like the quote. Unfortunately these are REO's in the Tampa market. Banks often make their LA wait until a certain date to present all offers... It's basically an auction, but it's a gray area, so they get away with it, and I've seen it a lot. Also, they don't tell you what anyone else offered. All they do is inform everyone that there is a "multiple offer situation" and give you a form to fill out that they say "isn't" (it really is) a request for your best and highest offer...

BTW, I was reading another post on BP, and it looks like I won't be buying that pre-foreclosure list after all...  

@Jennifer Talcott  

Hi Jennifer. We talked about something similar to this in another thread an it actually created the impetus to create the REIA. Here's the link:

http://www.biggerpockets.com/forums/311/topics/163766-tampa-hillsborough-county-foreclosure-auction-help

I was also outbid on a REO in Tampa this weekend. The last bid i was aware of was 20k over the list price. The bank took all offers until the closing date and time.....essentially a auction. At the price that was bid, there would not be any money left in the property. at that point you could only hold it and hope for cash flow or appreciation down the road.

Yeah Aaron, the Tampa REO market is getting brutal/stupid. You really can't make money in those situations.

Did you check out the Tampa foreclosures link that @Dave Bingham posted on this thread?

We find here in Minneapolis the real estate market has really come back as well.  Getting deals has gotten really hard for us as well (we flip houses).  We have learned that you have to put in lots of solid offers that make sense. If we really like a property, we will put in offer with High earnest money, no continuances, all cash, close in 14 days.  We find that if makes our offer hard to look past, but you have to be in the ballpark with other offers to make it work.

Good Luck,

Dave

Great advice, Dave. My clients and I find the exact same results. Find a lot of properties, make a lot of offers (ideally in cash) with large earnest deposits, no contingencies (we pre-inspect on the properties that are most interesting), then make an offer that makes sense. If you find yourself in multiples (and you probably will), go to the max offer you are able to make while still maintaining the necessary profit margin.

Cheers to a Healthy, Wealthy, Happy, and Wise 2015!

Ted

@Jennifer Talcott  so having a construction background myself I look at a property, and then after I am comfortable, I get rid of all my weasel clauses, so I stated "buyer is aware this is an older home with defects, and has inspected the home, buyer waives any and all contingencies and acceopts as-is where-is contingent upon clean title. Large Ernst money and closing asap. I put closing within 30 days, however buyer is capable and willing to close with 7 days if title can be produced in time. I know the property before I do this obviously. I think alot of investors have a bad name from people using weasel clauses. 

@Jennifer Talcott  I would recommend Like @Elizabeth Colegrove said.  get yourself a few really good wholesalers in that area and they will be able to find what you are looking for.  As a wholesaler myself I actually say that I am a professional MARKETER instead of a wholesaler because we without consistent marketing I can't get any leads which in turn make deals, but I need an END CASH BUYER to flip it too and that's where you would come in.  

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Originally posted by @Jennifer Talcott :

What kind of strategies do you all use to get your offers accepted?

I have access to a pre-foreclosure list and plan to start working it next week.  Any other ideas?

Here are some strategies:

1. Make a ton of offers. If I read the original thread correctly, you've only bid on 2 properties & they are REO. If it's really that competitive you may have to make offers on properties site unseen to compete, then use the inspection period to complete your due diligence.

2.  Make your offer good til sold- Some of the deals you're loosing out on won't close & they will go to the back up offers.  If your offer is good til sold it may be chosen/accepted later.

3. Provide Proof of Funds to support your cash offer and/or finance offer.  Cash offer goes to the top of the stack for review by the seller.  

4. Fast closing goes to the top of the stack for Bank REO deals

5. Short or no  inspection period- The shorter the better.  It's high risk but an offer w/ no inspection contingency will be stacked above an offer w/ an inspection contingency.

6. Don't just stick to bank owned MLS REOs. Find some good wholesalers w/ off market deals

I'm sure there are other strategies that you can find thru the BP forums/archives.

@Crystal Smith

Thank you so much for the suggestions.  #2 - Offer good till sold is one I haven't heard of, and it's a great idea.  I also think my inspection period is probably too long (10 days).  But I don't want to cut it back to less than 5 days, so I can give myself time to research for sinkholes, liens, etc., and to inspect.

How fast is a quick close do you think?  I've put in 3 weeks just to give the title company time to do their thing.  But how long does a title company really need?