Feeling like a cat? Properties here today contingent today.

10 Replies

At first I thought I’m looking at too many properties – but – the properties I am finding are going quick. I start off with 5 and then 2 go to pending so it leaves me with 3. And in the course of a day another is lost to pending.

I keep looking and adding to my list of other potentials that all are within the criteria (ie cash flow, good neighborhood, age of home, etc. you get it, we all have criteria) but the dynamics of the market are wreaking havoc.

I cross it off (still keeping an eye out because the contract may very well just fall through) and look for other properties, otherwise I wouldn’t have anything to assess.

It doesn’t drive me too crazy but I can see it being a nightmare for a realtor (are investor-realtors more understanding and amenable to this dynamic – yes I think so)

The quick assessment now leads me to see if it will be a good investment. I'm learning to get things quicker now that I have a good spreadsheet process to input data. It's more streamlined and the check points are easier so focus is on the bottom line and not too much in the details upfront.

 I'm starting to view this as an auction of sorts in the way things are happening.

 

1-How do you keep up with this dynamic of properties to get out and see them when the cycle of on-market-2-pending can be so quick?

2-Are you looking only at a couple of properties?

3-If they all pan out with your bottom line, do you then choose one? And what if that one then becomes none, you have to back peddle to the other potentials on your list?

4-Are you driving your realtor crazy (albeit if you aren't the realtor :}) with all the switching in/out, IF you are doing this?

Personally, I don't look at the mls in my area. I see the same type of outcomes where homes that are a good deal are up and gone very quickly. Its a hot sellers market out there so its hard to find good properties via the traditional mls. 

You can only go and visit so many properties in a day and you're likely driving your Realtor crazy with all the showings and nothing to show for it. I'm sure they signed with you because you said you were an investor looking to close fast and you may be creating a rocky relationship if you're not meeting their expectations. 

My suggestion is to change how your finding them since your market is so hot. Maybe you need to focus on properties that have been listed for a long time, mail letters to landlords, get absentee listings and mail to those, etc. Sounds like its time to make a change.

If something met all of your criteria why not make a offer? If they do not meet your criteria then why would you care if they get sold?

If everything you are looking at is not meeting your criteria then you do need to change the way you source your deals.

If the property meets your criteria, why are you worried about viewing the property. Make a reasonable assumption about the rehab required, write a contract with a reasonable inspection period and make an offer. You're not living in the property, you're investing. If the bottom line meets your criteria, Maka an offer. Otherwise, you're going to have to change with the market.

I run numbers based on the listing and do a VERY quick down and dirty estimate of rehab based on pictures and listing description.  I will then put an offer in, sight unseen.  I've purchased 1 property this way and am under contract for two more which will close next week this way.  This helps get me out of the quick Pending cycle.

I don't have to love the property.  I just have to love the numbers.

@Linda Weygant

I do the same number crunching that gives me a narrowed down list. The problem is that inside of a day anything on that list goes to pending, so I do move on to other properties that I find.

As far as using the pictures and listing description, I found that can be the farthest from the truer picture of the property. Almost to the point of purposely advertising under a false assumption.

I looked at a few properties that were so far from what was described or what the pictures looked like in comparison to actually seeing the property. One was so heavily smoked up that I wouldn't even go inside and my realtor had the same reeling affect. Another was vandalized and the listing agent put the prettiest pictures out for advertising and nothing in the description about TLC. At least that would have been a clue.

If I would have put a contract on any of those I would have been sorry for doing so. I'm not in the market for properties that require a ton of work. I'll concede to some like if I need to buy appliances but my pocket isn't that deep so I can't do like what others do and spend on rehabbing.

Originally posted by @Daria B. :

At first I thought I’m looking at too many properties – but – the properties I am finding are going quick. I start off with 5 and then 2 go to pending so it leaves me with 3. And in the course of a day another is lost to pending.

I keep looking and adding to my list of other potentials that all are within the criteria (ie cash flow, good neighborhood, age of home, etc. you get it, we all have criteria) but the dynamics of the market are wreaking havoc.

I cross it off (still keeping an eye out because the contract may very well just fall through) and look for other properties, otherwise I wouldn’t have anything to assess.

It doesn’t drive me too crazy but I can see it being a nightmare for a realtor (are investor-realtors more understanding and amenable to this dynamic – yes I think so)

The quick assessment now leads me to see if it will be a good investment. I'm learning to get things quicker now that I have a good spreadsheet process to input data. It's more streamlined and the check points are easier so focus is on the bottom line and not too much in the details upfront.

 I'm starting to view this as an auction of sorts in the way things are happening.

 

1-How do you keep up with this dynamic of properties to get out and see them when the cycle of on-market-2-pending can be so quick?

2-Are you looking only at a couple of properties?

3-If they all pan out with your bottom line, do you then choose one? And what if that one then becomes none, you have to back peddle to the other potentials on your list?

4-Are you driving your realtor crazy (albeit if you aren't the realtor :}) with all the switching in/out, IF you are doing this?

What I am learning (still a newbie) as I read REI books etc is that there is one striking difference between REI and other forms of investments. While buying stocks, my sole focus of analysis is to predict how much upward potential the stock has. But in real estates, we don't speculate on appreciation of property but focus on either building capital or cash flow through by value addition.

The reason I mention this is, in stock market during prolonged bull runs (like the current one), I will stay away from buying stocks, sit on cash and wait for drops in market. (Buy when others are selling, sell when others are buying). If you were buying property only to sell when they appreciate, you should stay away from buying right now, sit on cash and wait for drop in prices.

But as I mentioned above, real estate investors usually add some form of value to the end user (renters or buyers) after they buy property. So all you need to assess is if you will get sufficient returns on investment and value added services that you are providing to your customers. This can be % rent of price you pay or monthly cash flow or equity growth etc. 

If the properties meet all your criteria, just put in an offer. If you find out later that the actual condition is far different from what was described/depicted in the photos, then that's what inspection contingencies are for. You lose nothing and potentially could get some properties under contract before someone else does. 

@Kyle J.

Doesn't inspection contingent mean paying for an inspection? I've never done it any other way - if there is something different please let me know I'm all for learning from others more experienced in these areas.

If it is paying for an inspection that can be quite costly and ineffective.

Those that I purchased locally were put under contract immediately after I saw them because then I felt confident in paying for an inspection. For me, I guess I don't have that "show me a picture and I will say yes or no" ideology.

Originally posted by @Daria B. :

@Kyle J.

Doesn't inspection contingent mean paying for an inspection? I've never done it any other way - if there is something different please let me know I'm all for learning from others more experienced in these areas.

If it is paying for an inspection that can be quite costly and ineffective.

Those that I purchased locally were put under contract immediately after I saw them because then I felt confident in paying for an inspection. For me, I guess I don't have that "show me a picture and I will say yes or no" ideology.

An inspection contingency doesn't mean you HAVE to pay for an inspection.  A buyer's inspection could be nothing more than you (the buyer) walking the property and inspecting (viewing) it.  Most purchase contracts (and I'm assuming you're using your standard state contract since you're dealing with listed properties) give you the opportunity to conduct a wide variety of inspections, tests, etc. 

Of course, if you're going to hire a professional to inspect the property, then yes - you'd have to pay for that.  But it shouldn't cost you anything to walk the property and do a preliminary inspection of your own after the seller accepts your offer.  Then you can decide whether to proceed or not with any professional inspections that you want to do.

Well thanks for that @Kyle J. I've just never thought of it that way and no one has said that I could do that as an option - and I have worked with at least 2 realtors (1 seasoned in the business for a few years and the other new-er) that never mentioned anything like this as an option.

Armed with the right tools one can achieve much. :)

I've always looked at this beginning process as having to follow a certain standard. If the sellers are acceptable then I can see this going much quicker for me. It's then possible to do what others above suggested - doing the contract site unseen with major "look-see" contingencies that allow me to walk away.

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