Finally made first offer.... Unfortunately didn't get it.

25 Replies

Well I have been reading and learning a ton over the past few months, looking at properties in the KC market and finally found one to make an offer on. The purchase price was at $67k and after running the numbers fit my cash flow criteria. I made what I thought was an aggressive offer... $72k cash purchase, 21day close, 10% earnest money. After a day of waiting just found out didn't get it, and went to someone who bid over $80k. It was a little bit of a let down to not get it, but need to keep moving forward. I'm wondering if it would be better to try and find a wholesaler for deals instead or start a direct mail campaign, what are your guys thoughts? Want to get my first deal by the end of the year.

Don't give up - that deal wasn't yours to have apparently - and you learned a ton in the process.  I live in KC and AZ - both markets can be tough.  Being new also makes it a bit tougher -- the right one will come along.  Chalk that up to learning............  best of luck.  Go Chiefs!

@Tristan Colborg Hey man, the best advice is to continue putting out offers on properties and don’t get attached to any particular property until you close on it. This business is so competitive that you can’t just make one offer on a property, and have your eggs in that one basket that it gets accepted; you have to keep searching for more deals and continue placing offers on more properties, so if one gets rejected you still have 5+ properties that still have to get back to you if your offer is accepted. Put in offers, and just forget them until they reach out to you on the status of the offer. Also it is great to reach out to wholesalers because they may have access to deals you may not have access to.

@Debra Thomson Yeah that is what my wife tells me... LOL If it was meant to be we would have got the deal. Have you invested in the KC market? If so are you finding your deals on the MLS or elsewhere? Oh..... GO BRONCOS!!! LOL

@Davian Brown Yeah I understand what you are saying about offering on multiple properties at once. I guess what makes me nervous is if multiple ones come back and accept and then I have to figure out how to get them all to work. Feel like it would put me in a pretty stressful situation, but I may be wrong. 

I do want to try and partner with a couple wholesalers just haven't started the search yet.

Well, your lucky I am even answering after your Broncos shout out! LOL No I have not invested - bought many personal homes here over the years - currently still own a Townhome in Lees Summit. Working with a realtor that can do the MLS research for you may help you. I am not licensed in MO but I could find you one if you needed it.

@Debra Thomson Sorry I had to after your Chiefs shout out. I have an agent in KC right now, but feel like finding stuff off the MLS that meets cash flow requirements is pretty hard to do. I am starting to develop a website to possible start doing some online lead generation, but that is still a little ways out.

I just joined this for connections and to learn - looks like something you might like -connectedinvestors.com

@Tristan Colborg congratulations on making your first offer. I too would like to have my first purchase by year end and also considering going through a wholesaler to achieve my goal. Good luck!!!
@Tristan Colborg thanks for posting! I’m also looking to land my first deal before year’s end, and also in KC. Your post is helping me see that I’m gonna have to be persistent. In my case I haven’t even found an agent yet, hope to do so within next few days. I recently got pre-approved for a loan at my credit union here in LA. After hearing you say that even your cash offer wasn’t accepted I’m wondering if going the conventional loan route will make it extra hard to land a deal...
@Marvin Barrera My whole strategy is to try and go the BRRR method and purchase cash, renovate then refinance. I'm sure conventional financing will work as well just maybe a little more work. How long have you been looking into that market?

It takes guts to offer more than asking and you did that.  Its probably better you didn't get your first offer, because it shows that your valuing strategy is accurate.  That should build a lot of confidence in your numbers.   Keep it up.  I get about 25% of the offers I put out.  

It is a numbers game like an hour glass. You pour sand only one grains gets to the bottom.  

That being said, I often make one bid and get what I want. This takes years of practice and knowledge. If I see something I like I am willing to pay top price as time is of value.

@Tristan Colborg I wouldn't find a wholesaler or start a direct mail campaign. Just work with your realtor and actively make offers. Don't be aggressive. Sometimes the best deals are the one you avoided. 

Best of luck!

It happens been there ... There's been few times I didn't even get chance to make a best/final haha.

One thing that can help is a different realtors, not saying the one your using is bad but some are stronger/better networked. That helped me get one of my deals pushed through...

@Tristan Colborg I don’t believe in “meant to be”. I believe in the numbers. I was 2 for 2 on offering and buying properties at the start of the year. These last few months I am 0 for 6 on offers. And actually, I don’t mind that much. The first rejected offer I was happy about. It meant I wasn’t offering too much on what I was searching for. Let the numbers be your guide. Too many people are paying too much. I’m “hoping” to buy another multi family this year, but only the numbers will dictate if that happens. I’d rather keep my cash than buy a bad deal. I’m content with solid singles and doubles, but the bidding lately seems more like swing and a miss to me.

Keep at it and make more offers. 80k is 20% above asking on that deal. Would you still have wanted it at 81K? Doubtful is my guess. Most markets are really tough today for buyers and just because others are nuts does not mean you have to be. Set your limits and don’t deviate just to have an offer accepted, especially in a market like we are experiencing today. I’ll take no deal over a bad deal every time!

Originally posted by @Anthony Wick :
@Tristan Colborg I don’t believe in “meant to be”. I believe in the numbers. I was 2 for 2 on offering and buying properties at the start of the year. These last few months I am 0 for 6 on offers. And actually, I don’t mind that much. The first rejected offer I was happy about. It meant I wasn’t offering too much on what I was searching for.

Let the numbers be your guide. Too many people are paying too much. I’m “hoping” to buy another multi family this year, but only the numbers will dictate if that happens. I’d rather keep my cash than buy a bad deal. I’m content with solid singles and doubles, but the bidding lately seems more like swing and a miss to me.

 there's a meant to be aspect, luck/happenstance.  I had good friends that casually went to go look at a house, they figured why not put in an offer at list etc, and they go it. What happened behind the scenes was a terrible realtor started a bidding war between a first time home buyer and investor..... and for some reason went with first time home buyer. These buyers ended up having the loan fall through, back up tossed to investor who had already moved along.  Now the sellers were screwed, they were moving and up on a deadline....

Then my friends walked in tossed a list price offer with good sized down payment and strong qualification.


I was also on the losing end of a deal where I made an offer they said no, reached out again few weeks later same answer. Fast forward about 4 months later it was pending, then closed. It closed for basically the same price I offered, so I guess it just wasn't meant to be for me.

It was something terribly wrong with that house and the Home gods didn’t want you to have it. They are planning to bless you with something else (just got off the phone wIth them) and you don’t even know it. Just sit back and wait. You’ll see. It’s going to be a multifamily duplex with an ROI of 17+%. Watch. You’ll see!!
Originally posted by @Omar Khan :

@Tristan Colborg I wouldn't find a wholesaler or start a direct mail campaign. Just work with your realtor and actively make offers. Don't be aggressive. Sometimes the best deals are the one you avoided. 

Best of luck!

 Why do you think I shouldn't do direct mail and work with a wholesaler on top of working with my agent? 

Originally posted by @Anthony Wick :
@Tristan Colborg I don’t believe in “meant to be”. I believe in the numbers. I was 2 for 2 on offering and buying properties at the start of the year. These last few months I am 0 for 6 on offers. And actually, I don’t mind that much. The first rejected offer I was happy about. It meant I wasn’t offering too much on what I was searching for.

Let the numbers be your guide. Too many people are paying too much. I’m “hoping” to buy another multi family this year, but only the numbers will dictate if that happens. I’d rather keep my cash than buy a bad deal. I’m content with solid singles and doubles, but the bidding lately seems more like swing and a miss to me.

 Yeah I think that is why I have only offered on the one so far. When I'm running the numbers I'm doing it at 100% financed and with about 7-8% for expenses except PM @10%. Once I use those numbers it's often break-even or didn't cash flow. I may be too conservative but don't want to get burned. 

@Tristan Colborg Unless you're planning on buying multiple houses actively - day in and day out - or are buying expensive properties, starting off you will be wasting precious time, effort and money on running direct marketing campaigns. 

You can go further, faster by developing a deeper relationship with an investor-friendly RE agent and going from there. 

Originally posted by @Tristan Colborg :
Well I have been reading and learning a ton over the past few months, looking at properties in the KC market and finally found one to make an offer on. The purchase price was at $67k and after running the numbers fit my cash flow criteria. I made what I thought was an aggressive offer... $72k cash purchase, 21day close, 10% earnest money. After a day of waiting just found out didn't get it, and went to someone who bid over $80k.

It was a little bit of a let down to not get it, but need to keep moving forward. I'm wondering if it would be better to try and find a wholesaler for deals instead or start a direct mail campaign, what are your guys thoughts?

Want to get my first deal by the end of the year.

 Good to meet you.

First make certain that this offer isn't your last... 

Also if you find that you are buying too many of the opportunities then you need to recalculate your business' diminishing return.

The following is a great letter to send out to gather feedback which the seller may not be willing to tell you in person... You will fin that they will send this back and say things like if you  have offered me 2000 more we will do the deal. Allow the form to help them negotiate.

FORM

Thank you for meeting with our representative, ________________, regarding selling your house. We appreciate your spending that time with us. Our job is to make Happy Sellers out of everyone and would like to ask you to fill out this questionnaire so that we can improve on our performance and then mail it back to us in the enclosed envelope.

How did you hear about our company?

___________________________________________________________________

Why did you decide to ask us out to talk to you about purchasing your house?

___________________________________________________________________

Did our Representative arrive on time?

___________________________________________________________________

Were they Polite?

___________________________________________________________________

Did they make you feel comfortable and relaxed?

___________________________________________________________________

Did they spend enough time discussing our Program?

___________________________________________________________________

What questions do you feel were left unanswered?

___________________________________________________________________

If we didn’t Purchase your house what will have to change for us to do so?

___________________________________________________________________

Do you feel that we made you an offer in a timely manner?

___________________________________________________________________

Any other comments?

___________________________________________________________________

Please return this questionnaire in the enclosed stamped envelope.

Thank you

This post has been removed.

@Tristan Colborg If all of your offers were to be accepted, you offers are probably too generous. Having offers refused is part of price discovery. Keep making offers and you will get your first property. 

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