How many Properties do you look at before Buying?

23 Replies

Hello everyone,

I am new to real estate investing, and have been reading some of Robert Kiyosaki's books on investing.

For real estate, he says he follows the 100 to 10 to 3 to 1 method. He looks at 100 properties, makes offers on 10 of them, gets 3 of them accepted, and purchases 1 property.

What do you guys think about the system he uses? How do you guys go about viewing and buying properties?

Best,

Hermilo

Try to take what RK says with a grain of salt. That goes for any of the so-called "gurus". In my market there aren't 100 properties to look at. I look at enough to give me an idea of whats out there and I have my investment criteria. When I find a deal that works I make an offer. That could mean looking at two properties and putting an offer on one. I may look at one property and make an offer. Who wants to look at 100 properties just to settle on one? I personally dont have that kind of time.

I make an offer on nearly every property I look at, and in many cases a full asking price, if not a little above to ensure we get it, especially when it's too keenly priced. Very rarely do I walk away from a house without an offer at least made on it.

Here's the thing - why am I going to waste my time vetting properties that are not my target properties, either on price or location? The cost of flooring is fixed, the cost of a new kitchen is fixed, cost of a new bathroom is fixed, windows are the same price they ever were, and so on.

Got better things to be doing than wasting time looking round houses I have no intentions of buying.

But then, I have an extremely narrow focus with my cash buy and hold strategy.

Since the start of the year I have analyzed one property per day.  

I have several properties already but it only takes a few minutes even to plugin to the BP calculator.  

It has been great practice just a little bit everyday.  So you will know at a glance if it worth investigating further

757-581-1488

@Rob Beland

Thank you very much for your response. That is exactly what I was thinking as well, some people don't have  a lot of time to first look at 100 properties. Also, do you focus on a certain area in your city, or do you just look at whatever you can find online or through driving around?

Thank you once again for your advice.

@James DeRoest Thank you very much. I totally understand. Like I asked Rob above, do you focus on looking at proeprties in a certain area, or just look at properties all over your city and make offers on the ones that might look like a good deal? I heard that people should focus on 1 or 2 particular areas where they plan to invest, and only look at properties there. What do you think of that?

Thanks!

@Sean Ploskina

Thank you for your advice. I am definitely going to start doing that in order to get bette at analyzing deals. BiggerPockets has some great blogs on the subject. Good luck with your future endeavours!

It may take days to look at 100.. in some markets the property will be snatched by the time you figure out its a good deal..

Originally posted by @Hermilo Garcia :

As a buy and hold investor, I'm not interested in just any old property anywhere in the city.

I look at key neighborhoods, and at key assets (eg distressed houses) in a certain price range. So my focus is incredibly narrow. If I'm looking at a house, I'm looking to buy. 

I will however look at houses outside my key neighborhoods if I'm asked (either by my realtor who thinks he has a good listing, or a we get a personal introduction to someone).

@James DeRoest

I see. As for distressed houses, do you mean that the houses are not in the best physical conditions, or that the owner is having trouble paying his mortgage? Do you rehab as well?

Originally posted by @Hermilo Garcia :

@James DeRoest

I see. As for distressed houses, do you mean that the houses are not in the best physical conditions, or that the owner is having trouble paying his mortgage? Do you rehab as well?

 Both. I don't discriminate.

Everybody has given you good advise.  The bottom line is just do something. You're a young man so consider buying and living in a duplex with a FHA 3 1/2% Down payment. It's a win win approach. Join a Real Estate Club, Join a Meet Up Real estate group. Talk to a realtor, Use Bigger Pockets. Look at listings. Look at Zillow

bg

As mentioned a lot will depend on your goals.  Buy and hold guys dont have to buy at the margins us rehabbers do to be profitable, so its a different animal altogether.  

When I was working newspaper ads and bandit signs, I'd talk to 100 people to look at 10 houses to buy 1.  That's the right expectation for buying rehabs from individuals.  Here lately I've been mostly buying from banks, though.  It does depend on the market, sometimes deals are easy to come by, sometimes they are downright hard to find.  I'm with Rob, though, if I take the time to analyze a deal, I make an offer at my numbers even if its half what they say they want.  I got laughed at a lot in 2013 because the hedge funds were buying everything in site and I still made my offers at 70% less repairs.  I easily made over 100 offers with none accepted over a few months that year.

If you count glancing at all the wholesale deals that come my way and cruising MLS I probably look at more than 100 for each buy these days, but mostly from my laptop. I dont have my marketing cranked up so dont talk directly with sellers that much anymore, but my website does kick off some leads here and there. I generally forward those to a wholesaler I know unless they are in my area or clearly a great deal. As a general rule, I dont drive out to look at a house unless I'm pretty sure I'm going to buy it, but do still look at several before I get one.

@Barbara G.

Thank you for your response and great advice. I will definitely focus on an area and look at deals with the intention of making offers to those that look like good deals.

Good luck in your future real estate goals!

-Hermilo

Looking at 100 properties can mean many things.  I look at well over a hundred for the "10 offers" I make, but I'm looking at them online.  Great real estate investors need to know about, or have someone who knows about, every opportunity in town.  Most of those opportunities are for owner-occupants; most of the opportunities will yield negative equity and/or cash flow.  You will likely have to look at more than 100 to make 10 offers, way more, at least at asking price because most properties are not listed with a profit.  

As far as visiting properties, this should be done to finalize your offer decision, not for shopping purposes.  By the time you show up at the property (within half a day of it going on market), you should know the internet version is a good deal, and it's just about nailing down the details.  

You probably won't get the deal due to competition, and 10 offers to 3 accepteds is probably a low ratio for an individual investor needing a larger margin to learn in.  Be ready to make 20, 30, 40+ offers before getting something, but also don't be surprised if you get the first offer because 1/x still means you're likely to get 1.  

One caveat: if you're using a skilled real estate broker or wholesaler, and you're in buying mode, you should be making offers on almost everything they send within your criteria.  

Originally posted by @Hermilo Garcia :

Hello everyone,

I am new to real estate investing, and have been reading some of Robert Kiyosaki's books on investing.

For real estate, he says he follows the 100 to 10 to 3 to 1 method. He looks at 100 properties, makes offers on 10 of them, gets 3 of them accepted, and purchases 1 property.

What do you guys think about the system he uses? How do you guys go about viewing and buying properties?

Best,

Hermilo

I'm not a big fan of Kiyosaki. Quite frankly, I don't know why you'd plan on only closing 1/3 of the deals you got under contract. Yes, sometimes you retrade and sometimes you find something and need to back out, but if you're working with realtors and only close 1/3 of the deals you get accepted, well, you are not going to be high on their list.

When we're out making offers on REO's, we get about 10% of our offers accepted and we close on probably 90% (that doesn't include one's we immediately drop, say if we get two accepted on the same day but only have the appetite to buy one). We make offers on probably 2/3's of the properties we view.

With direct to homeowner marketing, it's usually a bit higher, but that also doesn't include the fact that many of them I don't even go view because I can tell the seller isn't motivated.

OK Hermilio

Today is Monday.  What are you going to do today  Everyday you haaave to take a step forward.

Call up a Real Estate club and ask if you can be a guest at their next meeting while you deciede if you want to join.

Think about getting a room msste for yourself in your firt house hcking purchase

Look at Zillow.

Call up an agent snd see if they have something for you after you have tried to locate something for yourself on the internet.  Start anyalizing a propery to buy.  Count your money, and look at your credit cards and apply for a better credit card.

Keep us informed about your daily progress forward

BG

Originally posted by @Hermilo Garcia : How do you guys go about viewing and buying properties?

 I don't have a quota for viewing houses in person, physically on the site.  If I'm ready to buy and the first house I visit is a great deal, I buy it.  If the fourth house is a great deal, I buy it.  No need to waste my time looking at twenty houses if I can afford only one.

That said, I "look" at houses every day.  I'm always checking online sites to see what the market is doing in my area.  And you never know what you'll find that might catch your eye.  And if nothing new shows up one day, I look at the same thirty houses I looked at the day before.  I can't help myself.  It's an addiction.

@James DeRoest

 @Randy E.

I'm also new and going to look at several houses this week (which is why I searched this topic) You guys almost make it sound like you dont need to go into the house to assess repairs that will be needed. Is there something I am missing? I'm not being smart either it just seems like on both of your posts your not that interested in walking through the property until you want to make an offer. Experience aside, I can only afford one investment at the moment and I want to make sure I start with the best possible property. Please teach me your ways :) 

and good luck @Hermilo Garcia !!

@Josh Tonecha , I definitely like to walk a house before I put an offer in.  What I meant to say was, when I'm ready to buy, I don't have a quota of houses I MUST visit before putting in an offer.  If the first house I visit fits my criteria, I'm all in.

However, you were right in that I don't go into deep analysis any more.  I have a little internal logarithm that I can instinctively run within a minute or two of visiting a house.  In my current phase which is buying inexpensive houses, I plan on replacing/updating certain parts of a house before I begin my search.  At this point, the only things that put up a red flag for me are serious foundation issues and serious roof structure (trusses, etc) problems.  I want to get more comfortable with those two areas, because I would hate to bypass a good deal due to an irrational fear on my part.  When I find a house in my price range, I can buy it, replace a lot of the cap ex features, and know I have a rental that won't require expensive repairs for a decade or two.

But that's my plan. Many other investors have other plans that work excellently for them. I don't believe for one second that anyone else should follow my lead. I'm just a little fish in this big REI world, and I'm certain that other investors have more proven methods of investing.

Good luck!

Originally posted by :

I'm also new and going to look at several houses this week (which is why I searched this topic) You guys almost make it sound like you dont need to go into the house to assess repairs that will be needed. Is there something I am missing? I'm not being smart either it just seems like on both of your posts your not that interested in walking through the property until you want to make an offer. Experience aside, I can only afford one investment at the moment and I want to make sure I start with the best possible property. Please teach me your ways :) 

We have a very narrow definition of what we're looking for, and which subdivisions they'll be in. Sometimes the lead will come through MLS (but be prepared to get the contract in first thing the following morning), sometimes it comes through another lead, who knows?

But once you have a narrow definition of what you want, you can rule out all the other dross. I'm not going to spend all day looking for stuff that I'm not interested in.

Doesn't mean I won't bite on a great deal outside that definition, but I'm not out there searching for them.

We will still do the walkthrough, but only on the houses that we're interested in. If we like it, we make an offer on the spot (or at least within an hour).

Originally posted by @Hermilo Garcia :

Hello everyone,

I am new to real estate investing, and have been reading some of Robert Kiyosaki's books on investing.

For real estate, he says he follows the 100 to 10 to 3 to 1 method. He looks at 100 properties, makes offers on 10 of them, gets 3 of them accepted, and purchases 1 property.

What do you guys think about the system he uses? How do you guys go about viewing and buying properties?

Best,

Hermilo

 Wow that sounds like a ton of time and effort!

All of our deals come to us, people call from our mailers or fill out the form on our website.  I always make sure we are at or close to the price point before I go look at a property.

We probably buy 60% of the properties we go look at!  This would be higher but if I get a lead within 10 minutes of where I live I go look at it just because it's convenient!

@Randy E.

 I can totally relate to what your saying about having an "addiction" with real estate. I try to look at properties online all the time. May I know how you go about finding the numbers to analyze a property you might be interested in?

@Josh Tonecha

 Thanks! Good luck to you too.

No number. I know what im looking for and when i find it i jump, otherwise i dont

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