Investor · Conroe, TX · Member since 2013 · 30 posts · 8 votes
What am I doing wrong? I've lost 6 REO properties in the last 8 months. I've worked with two separate Realtors, gotten advice from more experienced investors, etc. It just doesn't seem to work out. When placing an offer, I have had market analysis done and put forth my best foot each time with no luck.
I'm wondering if there is some type of "underground" network involved locally, where you just have to be in the inner workings in order to secure these properties? I've been told by both my realtors that the listing agent does not disclose the top bid, and I know that this is against the "rules", but I'm just wondering if certain people just happen to be more "in the know". If so, where can I find one of these people? :-)
Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
10y
Levi Thornton
Your not using the "right" agent. If you want to be successful then go directly to the listing agent. Then you will be an insider as they can now tell you the bids because, they want to double end the deal. Try that.
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
10y
Not likely, problem is your using an agent. You want to be bidding on off market properties. This means driving around and seeing deals, then finding out who owns the property and getting in touch with them.
Grant Cardone is the interviewee and he gave some great tips on how to stand out when bidding for a property. He says that the seller will not always do the deal with the highest bidder, and if you really want the property, you need to go the extra mile to stand out in the sellers mind in whatever way you can. I have not had the opportunity to bid for properties as I am just starting out, but I enjoyed this podcast and definitely recommend it! I don't remember exactly at which point in the podcast he talks about bidding for properties, but the entire thing is worth a listen anyway.
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
10y
There is a good old boy network, but it don't work like your thinking, public sales are bottom dollar deals that people mostly lose money on. Off market deals is where it's at, and if someone wants to sell they normally call a few investing buddies or their banker and tell them it's up for sale if they have someone, couple calls later it's sold to someone within your network.
Flipper · Mission Viejo, CA · Member since 2014 · 2k+ posts · 1k+ votes
10y
Levi Thornton
Your not using the "right" agent. If you want to be successful then go directly to the listing agent. Then you will be an insider as they can now tell you the bids because, they want to double end the deal. Try that.
Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
10y
@Kizzy Brooks - I'm in a similar boat...and here are some of my thoughts...for whatever they are worth.
I would say if you're only making 6 bids in 8 months that may be part of the issue. Try making bids every week. You'll get more comfortable with your area and with evaluating what rehab work will need to be done.
Eventually you could get comfortable submitting bids without even going to look at the properties, if you wanted. As I know some investors do this, rather than wasting time visiting properties and doing analysis they just put out an offer...and if accepted/countered then start their diligence work.
Other things to think about is anyone who is an investor/agent can submit a higher offer due to saving on commission...anyone making a cash offer...again saves on money. I've done the math on properties near me and if an investor/agent bids all cash for a property than they could offer about $10-20k more on a property and walk away with the same profit.
If you're in an over developed area, like I am...likely the probably isn't your offer...its just the bank and other investors.
An example of the bank being nutty in my market is this one property I submitted a bid for near buy that is completely boarded up, graffiti and excrement in the house...ARV is $200k. Probably needs $90k in repairs. the bank started out the listing $99k I offered $35k...I was told no...and they've since lowered to $85k...I'm keeping an eye on it and will make my offer again on the next price drop.
Rental Property Investor · Liberty Hill, TX · Member since 2014 · 285 posts · 166 votes
10y
Just because you were out bid, whatever the reason, doesn't mean you are doing something wrong. You know what numbers work for you. You should stick to them. Sometimes that's hard to do but trying to force a sale by overpaying is not profitable. Six offers in eight months is not that many offers though it may seem like it.
Rental Property Investor · Tucson AZ / Nice FR / Washington DC · Member since 2016 · 1k+ posts · 1k+ votes
10y
Kizzy Brooks Yup. Figure what type of property your looking for then go hunting. Some people just run mailers all day long waiting for a hit, I personally cherrypick deals as I'm into buy and hold on properties most people want to flip. I look for empty houses, uncut grass, run down rentals, etc.
Investor · Conroe, TX · Member since 2013 · 30 posts · 8 votes
10y
@James Masotti I'll try that. I've been wondering if I should get an agent license. It has really been a hassle going back and forth with agents in order to do the footwork for you. As far as the profit that could be made on each deal, allowing me to increase my offer and still be profitable, would you recommend that anyone who is serious in this line of business- seek out a license?
I agree, that I haven't been aggressive enough with bidding, one reason is because of the realtor hassle factor and another is because I'm doing cash deals of my own money and have not built a large enough portfolio. So a major loss would have a major impact on my financial well being. (I only have 3 buy and hold properties so far.)
Investor · Conroe, TX · Member since 2013 · 30 posts · 8 votes
10y
@Martin Scherer I placed a bid today that I'm feeling a little queasy about, I wish I had read your advice prior to... I bid $8k over the highest move in ready comp in the area and this property needs major work. Hopefully I don't get it so I can move forward with a different strategy...
Investor · Conroe, TX · Member since 2013 · 30 posts · 8 votes
10y
@Joe Homs that does make sense Joe. I've kept from switching agents just to have some "loyalty" to the two that I've worked with, but if that will help me to move forward with acquiring additional properties, then I'll try that on the next one. Thank you
Rental Property Investor · Washington Township, NJ · Member since 2015 · 1k+ posts · 976 votes
10y
@Kizzy Brooks - To license or not is your own call. Every investor will tell you something different. What I'd say is if you're only planning to go after on market properties than I think it's worth getting. However if you're planning to go after off market properties, than it potentially becomes a hurdle to overcome as you'll have to disclose that you're an agent any time you buy or sell...
Then again you could convert a non-wholesale lead into a retail prospect using your realtor license as well...
So it's all a matter of what you want to be able to do.
Residential Real Estate Broker · Indianapolis, IN · Member since 2009 · 477 posts · 304 votes
10y
I would assume You can find out highest bids after they close... IF they close..
Also, depending on your market, you could be bidding against idiot wholesalers, or international clueless investors! I like making generalizations! haha I had a flip I bid on 3 different times once.. One of the times, after I lost the bid, a wholesaler called me and wanted to sell me the deal for a lot more than I bid originally... haha
All sorts of thoughts go through our minds when we lose a bid.. It's possible it's an inside deal with the listing agents best buddy, but it's also possible we are not alone in this universe!
HERE IS MY BIGGEST ADVICE!!!! Don't kill yourself to get a deal... They either work, or they do not!
Developer · Philadelphia, PA · Member since 2015 · 2k+ posts · 904 votes
10y
Kizzy Brooks are there any contingencies in your offer? If so, that could also be the issue. For REO properties, cash offers with no contingencies and a 21 day close works best.
Flipper/Rehabber · Crown Point, IN · Member since 2009 · 482 posts · 216 votes
10y
Kizzy,
There's weeks that I put in 10-15 offers and may only have 1 or 2 offers accepted. Volume is the key. No doubt about it! Don't get discouraged.
I disagree a little bit with some of these posts. People are telling you to go after "pocket" listings or private listings. Over 65% of my purchases are done through the MLS. There are bargains everywhere. I would agree that off market listings are good, but I find that many of the off market properties were given to wholesalers who just jack up the price and haven't a clue what they're doing. Just a side note.....I'm NOT knocking all wholesalers. However, they'll also put contracts on listed properties and try to sell them as well. It works both ways. Have your realtor run a "report" that'll give you a daily breakdown of what properties become available on the MLS. It's driven by your criteria. Example: You might tell her you want all of the single family homes in 6 towns that you're interested in purchasing properties. Maybe 3 bed - 1 1/2 baths minimum. A garage and whatever your criteria is. Then give her a price range for the properties. Say $0k- $90k Everyday, you'll receive the newest listings and you can review them as you see fit. Contact a realtor, they can explain it in more detail. I hope this helps you and I wish you the best of luck.
Investor · Conroe, TX · Member since 2013 · 30 posts · 8 votes
10y
@Levi T. I'm calling my realtor now to retract. I thought that once it was submitted for review, that was it.... You just saved me a ton of money!! THANK YOU
Residential Real Estate Broker · Indianapolis, IN · Member since 2009 · 477 posts · 304 votes
10y
Yes, get it in writing though that you retract your offer... You may need to sign a form, or your agent may be able to get away with just sending them an email or fax...
Investor · Virginia Beach, VA · Member since 2013 · 84 posts · 26 votes
10y
Lee Smith is right - you can find out what the property sold for after they close. Your realtor should be able to pull this for you - have hem pull the close price for all propertirs you've lost in the last 12 months, and compare that to your bid.
You may see a pattern. If you are just barely losing each deal, then you may need to sharpen your pencil. If you are losing by 10k every time, then you might be more inclined to try a different acquisition strategy - direct mail, etc
Investor · Houston, TX · Member since 2015 · 12 posts · 17 votes
10y
@Kizzy Brooks There is a degree of insider networking that often takes place, but there are still deals to be had from the MLS. I've found that time is of the essence; those that can present (and close) a worthwhile offer often come out on top - I've known contracts to be accepted on properties in hours. Likewise, much of it is also a numbers game - the more deals one offers on, the better probability of success. I've offered on countless properties and come up empty - I've also been successful on a few; all it takes is one, metaphorically speaking. Definitely seek to become apprised of deals off-market (develop contacts within the bank) and continually evaluate your offer numbers, but essentially, just keep at it!
Investor · Conroe, TX · Member since 2013 · 30 posts · 8 votes
10y
@Thomas Fortune Thank you. I'm really surprised that my realtor has not offered up that information (sell price) before. That would be really helpful to me and I definitely would be interested to see what the difference was so that I can be more knowledgeable when submitting offers going forward.
@Anthony Washington I'm sure hoping I get that one soon... The MLS has not been nice to me.. My properties have been acquired through other areas, but MLS doesn't seem like it should be as difficult as it has been over the last few months.