I'm trying to get my first investment going to start my real estate portfolio. The frustration is that I search through what seems like hundreds of properties that are within my buy criteria, when I find one it gets scooped up before I can make an offer. I'm open to all suggestions. Is there any "tricks to the trade" when buying your first? I've been sticking with the 70% ARV - minus repairs strategy for my offer. It just seems to price me out of competition more often then not...
Hi @Brandon Cronkhite ! If you're getting hundreds of properties that fit your criteria, then sharpen the pencil and make hundreds of offers - or refine your criteria. If you clarify exactly what you're looking for, you don't have to sift through hundreds, but if in reality you really would be happy with any of those, then make offers on all - it is free to do. Don't get loose on your numbers though - keep them tight. On a BRRRR deal, the rehab is always more than you think.
I wouldn’t say I’m finding hundreds that meet my criteria, but it seems like I’m looking through a gay stack to find the needle lol, which someone grabbed up just before me! Thank you for the Response for sure!
@Brandon Cronkhite , if you're new to the dancing, start with a slow song first!
Obvious deals get snatched fast! Sometimes they are advertised low to get attention and a quick sale. Sometimes they get multiple offers quickly and sell over asking. That may not be a comfortable scenario for a new investor to buy in.
So, maybe start with a slower paced deal. Look for properties that have been on the market a while perhaps without reducing the price. There are a lot of lazy realtors who don't work their listings very hard.
If you can find a listing that is getting ignored and sitting vacant, you might find a motivated seller who just doesn't have a great agent.
Now, the listing may not look like a deal, but at the right price it might! Make an offer that makes sense to you even if its very low. If its not accepted come back several weeks later with the same offer. Do this to several properties and eventually I think you'll make a deal.
I myself recently bought an estate where I negotiated just over 40% off the asking price.
@Brandon Cronkhite the first investment tends to be the toughest as you need experience to get more/better deals. Here are some tips in no particular order:
1. Maybe adjust your all in to 80% so you can get 1-2 projects under your belt and get some "street cred"
2. Look to solve a larger problems and/or stop competing (here is an article: https://www.biggerpockets.com/blog/real-estate-motivated-sellers-investors-solving-problems)
3. Make your offer stronger somehow (rent backs, closing timelines, more earnest money, etc). I'd keep your inspection and appraisal contingencies for now until you get more experience.
4. Add more team members (realtors, dealfinders, websites, etc) to fill the top of your funnel
5. Get really good and really quick at deal analysis. If people are scooping them up before you, it sounds like part of your issue is speed.
6. Make move offers! This ties back to #1.
Just a short list of ideas for you!
I don't know where you're located but in most major markets it will be tough to find deals at 70% ARV minus rehab.
I ran into similar issues with my first BRRRR. In competitive markets, to help with speed you have to be willing to make offers on properties that fit your numbers before you visit it...and as mentioned above be quick with analyzing it. I would also suggest to add 10% on top of your rehab budget because it will definitely go over.
Best of luck to you.
Wow! Great encouragement! Thanks everyone. I will definitely take these and tweak my approach moving forward. Thank you for taking the time to share the wisdom!