How Do I Buy Properties For Below List Price?

Pueblo, CO

Posted Nov 7 2016, 11:38

So I just started investing in real estate and I have had no luck closing on any of my deals, or even getting under contract. The real estate agent who was showing me the properties actually quit on me when I put in my last bid. She didn't even submit it and this was only the 3rd or 4th house i have made on offer on. What I learned from this little incident was to just go directly thru the listing agent, but that still doesn't solve my problem of getting the sellers to accept my bids.

The first thing I thought was maybe my offers are too low, so on my last i really dialed in and was a precise as I could be. The house is this example has a list price of 89,000 and an ARV of about 118,500. Here is an example of the numbers:

Max Purchase Price = [Sales Price]-[Fixed Costs]-[Profit]-[Rehab]
MPP = 118,500 - 15,964 - 10,000 - 25,331
MPP = $67,205

My fixed costs include 6% from the ARV in real estate agent commissions + 5500 in closing costs + 2654 in 3 months holding costs.

To me this seems like a very comfortable bid based on the ARV but all my bids have come way under the list price. In this example the difference is 21,000. The other bids I have put in have been about the same.

A few of the houses I put bids on however have sold for the list price??? How? I have went back and reanalyzed those deals and could not come up with any profit based on the list price, the comps, and the rehab. I have even gone with different contractors to get lower bids but the rehab bids have all been about the same.

Am I not doing something right? is their a secret to getting my offers accepted? The real estate agent I was working with quit on me in the example above and said that homes are selling at 98% list price. I said even one's without kitchens, doors, and walls...She said yes and hung up.