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.
Portsmouth, VA · Member since 2016 · 41 posts · 8 votes
10y
I had it happen to me for months. One guy actually lied to me and said he put my offer in but didn't. Luckily I'm not the kind of person to not double check. I figured out which bank owned the property and they told me everything I needed to know to get in contact with his asset manager. Long story short he's not very happy about it but he ended up having to re do the bid correctly and include my offer which ended up taking it.
You need to be very careful because there are very tight connections in the business and it doesn't seem like there is anyone keeping listing agents in check. Now this agent is doing everything he can to make it hard for me all because he didn't get to give the property to his buddy. Some will tell you straight up that thier properties are sold before they ever hit the market. It's crazy to think that on the good properties it's not your bid that counts is whether or not the listing agent feels like actually doing his job and look for the highest bid. This deal has really changed my perspective of this real estate game we are playing.
I recommend you put in your own leg work to make sure things are not being done under the table.
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? :-)
6 bids is not that many. If you had made 100 offers and hadn't won one it would be a different story. Go make a lot more offers and I bet you'll get one accepted before you get to 100.
A lot of people are overpaying for properties, which makes it hard for people who are trying to buy them at the right price.
Keep at it. Also good advice here about how to find properties that you will have less competition to buy.
Wholesaler · Mckinleyville, CA · Member since 2015 · 192 posts · 69 votes
10y
My offers tend to be accepted even if they are lower offers. When making the offer, it's always cash, as is, no contingencies, high deposit, quick closing etc. The banks seem to really like the idea of "washing they're hands" of the property.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
10y
The fact that your offers are not being accepted means your "offering right" Low enough where your leaving room on the table for a decent equity position. Don't offer more than what your comfortable with. There is little to no leverage with REO's with regard to fixing issues that come up in inspection so why over bid just to run into a headache that you will have to pay for. Keep offering along your same criteria and something will crack. Don't get discouraged.
Lender · Chicago, IL · Member since 2016 · 26 posts · 10 votes
10y
First off, it sounds like you are looking in a "hot" area because you have been up against multiple offer every time and never win the bid. Stay in those "hot" areas. That is where the money will be made but you will have to make your offer more appealing to the seller as many have stated before.I am not sure of how you are coming up with your offer price but it is extremely important to know the area, know what your rehab budget is going to be for each property and know the ARV value as well. Knowing the ARV - rehab budget - holding costs - realtor fees - your profit will give you your asking price. Also keep in mind it is good to have a cushion in the case you have to drop the price. Once you have those numbers figured out then you go to step 2. Have your realtor do a CMA with a .5 to 1 mile radius. Have your realtor look at all the recent rehabs and have him/her look to see what those investors purchased those homes for before rehab. This will tell you more about what investors are willing to pay for fix and flips in those areas. Compare your offers to those of the "before rehab sales". Compare your offer to those prior sales and assess where you stand.
Things that make your offer stand out are:
1. Cash offers 2.Higher Earnest Money offers 3. Quick closings under 30 days. These things will make you look like a serious investor and you want the seller to take your offer seriously.
If you cannot get your realtor to do that work for you then get a different realtor. I am a Realtor and they need to do the work for you. Remind your realtor that you will be a multiple buyer of properties and will keep using them to buy and then re-list. If they want that business then they will get to work for you. If not, then get a different realtor as I stated or go directly to the listing agent on these deals.
Another great point that other BP members mentioned is that you need to be making at minimum 10 offers a month if not more, once you get a property then you can slow down your offers to accommodate your means.