Properties on MLS

6 Replies

I listened to the podcast where Shawn Horsapple was interviewed and it was really encouraging an got me motivated again. I live in the San Antonio Texas area and I've been working on deals and offering in all properties. The challenge comes when I check the houses, I can see they need A LOT of renovations, so when I make my numbers the offer turns out to be very low. Any advise or suggestions ?

When we are in a better "Sellers market"like now, the deals are a little harder to find. You might have to get off of the computer and do some driving for $$ or maybe do some marketing to people who really, really need to get out of their house. There are probably some good MLS deals, but I bet they go really quick. Or maybe check out properties that are on the MLS for 200+ days. I bet they are ready to lower the price.

@Rosa Elena Tejado

@Rick Pozos Is right about driving for dollars and the fact were are currently in a Seller's Market.  But don't be discouraged by having to make low offers.  That means your mind is in the right place, you are actually evaluating the deal, and offering in your best interest.  The old adage certainly applies, "you make your money when you buy."  

I was taught that if I don't cringe at how low my offer is, I haven't offered low enough. I certainly don't feel that way on ever offer I make these days, but it was a good starting point and it helped me build confidence in making those kinds of offers. I once purchased a property for $70K below list. It was a long shot on property that had been sitting on the MLS almost 3 years. Int he month preceding my offer, the owner's wife had fallen ill and he was looking to just get rid of the home. I had no way of knowing that, but would have never gotten the property at that price if I hadn't offered.

 It also helps if you send out more offers.  It literally can be just a "numbers game."  When I first started buying, I was sending out 20 - 25 offers per week.  That's a lot, but It was netting me 2 - 3 deals per month.  At the time I was wholesaling so that was needed to keep me afloat.  If you're looking just to find one deal, 25 offers may be too much, but ratchet it back to 10 or so per week and see what happens. 

Hope this helps and good luck!

@Rosa Elena Tejado - all good advice above and I'm glad I was able to help you get motivated.

IMHO- when it comes to REO listings, the list price has nothing to do with my offer. I do my DD and always offer my highest and best [especially now in a sellers market]. I don't care if its 10% or 80% less than the list price. The numbers have to work - don't get in a hurry and overpay on a project to "just get a deal".

"The best deal I ever done is the one I didn't do" - the one you walk away from can save you the most!

Don't forget - it can take many [100's] of offers to just close a few good deals!

I see the same issues the OP has with some of my clients up here in CT.  

People take the time to get educated on how to run the numbers and they genuinely know how to calculate every number associated with buying a property.

Then when the time comes to pull the trigger on an offer one of two things happens

  • They don't offer because they feel there offer is to low
  • They don't trust in general that their numbers are accurate, they run numbers for another 3-4 days, overthink it, and the good deal gets scooped up.

My point is, if you take ample time to run the numbers and get educated on the entire process you have to trust yourself when it comes time to take action.  This is the number one problem investors have from a realtors perspective. Just trust your numbers and offer what your numbers are telling you. I know it sounds simple, but focus on what you can control.

This past week I crunched the numbers on a 23-unit MF complex. Immediately I could see that the margins were too slim to be worth it, but I went through the entire exercise as a matter of brain-training. I even spent 45 minutes with the seller running through the numbers and discussing creative purchasing options. (I was up-front with him that the deal was not going to happen, and he was still happy to talk shop knowing that.) All this so that when the next great deal comes along, I'll be more familiar, and thus, more comfortable pulling the trigger quickly. "Know thy self."

Thank you @Rick Pozos . It is fantastic we can count on your stories, testimonials and of course advise.

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