Hey BP !! I’ve been aggressively searching for my first deal and have made several offers on potentially good cash flowing homes (both multi family and sfr) in the Lehigh valley area of eastern PA. This market tends to be quite hot right now and I have a good agent that has been sending me some good homes. I was outbid on a few offers and recently was under contract and looked like I was about to close on my very first sfr home In Easton. We agreed on a purchase price of 72,500 and my appraisal came back near 100k so was very happy with that Instant equity. Long story short, I was on vacation and had everything set up with my financing before I left (or so I thought ) and I come to find out my broker admittedly dropped the ball on getting some documents to the underwriter so my agent reached out to the seller and anticipated we may need a few extra days to close( days not weeks). He flipped out and immediately sent out a termination contract prematurely. I later Find out that the city hit him with a couple grand of inspection for the CO that was unexpected which I believe really set him off and the delayed closing tipped him off the edge. Apparently there is a loophole in the contract that allows him to back out if I don’t have documented financing in place 7 days prior to close so being on vacation really screwed me but from a legal standpoint he still didn’t have much ground to stand on. However after discussing with my realtor I could potentially get a lawyer involved for breach of contract but I decided to sign the termination in the end because the whole situation was a huge headache and he was being completely unreasonable and I wanted to walk away with my dignity and after all this I honestly didn’t want to do business with this knucklehead. I lost 600 for the appraisal and a hard lesson. My main hurdle I’ve noticed now is that every offer I submit( many at full asking price) are still not good enough to get my first deal! What am I doing wrong? Seems that I’m being beat by either cash buyers or investors that are waiving almost all contingencies including inspections! I just made an offer for a 5br rehabbed sfr for full asking and my agent asked if I’d be willing to waive inspection and put down 10k earnest money to beat out the other 4 “very strong” offers on this house. I said no because I’m not a contractor and I don’t feel comfortable buying my first deal without an inspection. What else can I do to compete in this market? Would anyone recommend to waive these contingencies to secure the best offer ? I have about 50k in savings but I’d feel comfortable max out of pocket at 30k to allow for emergencies and to save for my next deal. BP please help !! Would love some feedback. Thanks !
1. If your current area is very hot as you mentioned, maybe look at other areas closeby or out of state where the market meets all your criteria. Since its your first deal you would want it to be perfect or atleast make you a small profit (money or experience wise). If you rush into a deal in frustration just to get a deal done you might make a big loss and stop/hurt your RE career in the very beginning.
2. On the bright side, you almost had a deal which means that for the next time you know what extra steps you need to make sure to close quickly. You just need to persevere with what you have been doing until another deal comes along that ticks all your criteria.
@Bharath Veeramachaneni . Thanks a lot for the advice and encouragement. Loosing out on these potential deals has taught me some things and reinforced the fact that I’m actually making offers on good deals bc they are so competitive so there is some positives to take out of all this. I want to be patient but also am so excited to get into the game and stop watching from the sidelines!! Thanks again. I’ll keep pushing forward !