Property Manager · Prineville, OR · Member since 2016 · 261 posts · 166 votes
5y
@Caleb Haynes
Hey man, I was in the same boat! Most of the people that won the bids offered a larger earnest money deposit that was non refundable.
How I finally landed a 4 plex was grind hard to find a off market deal. The one before I closed we got our bid by 130k over asking..... cash buyer in Portland or lol
Rental Property Investor · Morgantown, WV · Member since 2016 · 235 posts · 135 votes
5y
@Caleb Haynes
A little trick I learned to make your offer competitive against all cash buyers is by submitting an off with no contingency’s. Sellers want either a cash buyer or a clean swift close. With no contingencies you will absolutely heighten your chances to get an accepted offer. But you are also adding some risk. If you plan on doing this I would walk the property throughly with a handyman when you see the property.
Ann Arbor, MI · Member since 2014 · 1k+ posts · 997 votes
5y
Stop overpaying! I've been doing this long enough to know when I see a crazy market and this is an insane market. It's too difficult to predict how long it will last but it cannot last forever.
Someone here said something about Indianapolis and that's a pretty good alternative, in my humble opinion but of course this is going to depend on your long-term goals and whatnot.
Yes, you could always wait but you could end up waiting significantly longer and miss out on even more. Considering how crazy things are I would still try to get into the market but do so from a much, much lower entry point. This way your risk/reward profile will be more “reasonable.”
Please take it from those who have seen these things before; the best way to make money is to buy at significant discounts. Right now the market is selling at a significant premium. The sellers are the ones making money right now! Not the buyers!
So if you still want to play the game, lower your overall risk by buying cheaper housing. just be careful not to buy in areas that are constantly losing people.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
5y
This reminds me of how it is to purchase in CA or OR.... IMO to invest in a hot market you need to have a long lens and look at RE as a long term play - not a get rich quick play..... Only you can decide where you want to be cash flow wise and how much cash you want to put in the deal - the more cash you put in the more cash flow you will have (but obviously your ROI takes a hit) ..... but! getting in the market is important as time is what really creates a winning investment.
Your agent should be sharing with you how much places are going over asking and this info should help you with your offers.
Rental Property Investor · Portland OR · Member since 2018 · 2k+ posts · 3k+ votes
5y
the risk of having to renovate something is also high - contractors are very very busy - prices for materials is sky high, so that IMO adds risk not reduces it..... and, i really wish I had bought 20 years ago in my old home town when everyone was saying how hot it was - instead i listened to them and did not buy.... now those homes are worth 3-4x what they were back then.... my point is - you dont know what the future will bring...... and RE is a long term play......
Vacaville, CA · Member since 2019 · 218 posts · 140 votes
5y
@Caleb Haynes
Hi Caleb, we sold a little house in Northern California recently.
We asked $415,000 and received 17 offers. The top offer was $460,000 and waived almost all contingencies. We couldn’t believe it. Nobody knows when the tide will change. I know Texas and California won’t be the same, but I would guess you are going to need to offer more to get a house in this hot market. Good luck!
Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes
5y
@Steve Vaughan
I told my husband to buy Amazon at $700 and he told me it’s over priced. So I finally bought it at $1700 and today it’s at $3300. I wish I had bought them at $700......
Same thing happened with our home purchase in CA.
Any investment comes with the risk, Kevin O’Leary just reduced his commercial RE investment from 33% to 8% and he rather keeps the cash. Everyone’s goal and risk tolerance is different......
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
5y
Let's all read some books!! And knock on some doors because that's about all we have.
The first comment of this thread is a bit misleading for the Indianapolis market. Finding a C/C+ class, 2% deal, ended years ago unless you're buying and holding in dangerous areas. That's just my 2 cents.
Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
5y
@Caleb Haynes the answer might just be to sit tight. You can't control supply, demand, hysteria, pricing, but you can control how you act and react to it. Money rushing in always concerns me. If the numbers don't work, they don't work. Don't force it.
Investor · Mansfield, OH · Member since 2014 · 35 posts · 7 votes
5y
Investing is like a poker game, seasoned investors have more chips on the table than you. They can take chances that you shouldnt and dont pay any attention to them (bidding practices). I say save your money and do a little research. Go and see how much you missed getting these houses (public info). Next pretend you want to rent a property close to what you would be offering. I think these two things will help you make a good decision. good luck
Rental Property Investor · Charlotte, NC · Member since 2015 · 134 posts · 78 votes
5y
@Caleb Haynes network with other investors and ask them to send you any deals, especially seller finance deals. Or call listings that've been up for 4+ months and see make offers on those
Investor · Minneapolis, MN · Member since 2014 · 743 posts · 927 votes
5y
You need to realize there is a difference between what you think/know and what other people think/know especially if you are newer at this. I find things I can do to a property so often it's undervalued. Also, I think nothing of having $10,000-$15,000 in earnest money-why do I care if I'm buying it. Some things just set you apart. I decide what I think the value is to me, not what the asking price is. I've offered well above asking price before when the property is really worth it and I can make some type of change that increases the cash flow in a big way.
Real Estate Agent · Fort Lauderdale, FL · Member since 2018 · 360 posts · 213 votes
5y
Maybe you have a lot of contingencies on them and that could be a turn off for some realtors and sellers.. or a lot of inspection days...
Also a lot of people are buying cash!! so thats another thing.. maybe if you could consider HArd money.. ( I know it might be a bit expensive,, but then you can refi and turn back to conventional .. ) ..
Another thing you could do is up your Escrow amount a bit more so they see you are serious ,, 10k 15k escrow ... .
And lastly try to meet wholesalers Locally if you are looking on the market distressed props, that means that more likely you are either offering full market price or above ( regardless if numbers make sense or not) or best case 5% to 12% below market through the MLS
With a wholesalers on this competitive market you might be able to get it 25-15% Below .. ( ideally 30% but is just very hard) Unless you are able to force the appreciation and up the value of prop...
Rental Property Investor · Nashville, TN · Member since 2019 · 1 post · 0 votes
5y
@Caleb Haynes
I’m in Nashville and just sold my first flip. We listed at $564k. Received an offer at $600k with a $20k escalation clause... The market is pretty crazy here and sounds like it might be there in TX too. I’m seeing a lot of homes go for 5-10% above asking. I’m guessing you might need to get closer to those numbers. A good realtor in your market would be able to tell if your bid would be competitive before you even submit it. With that said, I’d probably change realtors (assuming you’re using one already) as my first step. Also, you’re in the same boat as most buyers right now with submitting several offers before finally getting ink on the paper. Buyer fatigue is real thing! Keep hunting. You’ll get one soon.
Real Estate Appraiser · Isabella lake, CA · Member since 2018 · 628 posts · 491 votes
5y
If you make an offer with an appraisal contingency, it would be smart to not make it too short. Appraisers are swamped lately. If you have a week or less, you might have a problem getting an appraisal in time. Or you might have to pay double for a rush fee to entice someone to work extra time to get it done.
Most appraiser these days are self employed and many are one man shops like me. There is too much work, so we have no choice but to pick and choose. I delete lots of e mails from a couple AMCs looking for bids. I take the ones that come to me from known clients, without having to make a bid and have a decent fee and are not far away. Others I turn down, I am one guy. Anything that comes over for me to accept or decline and has a double fee, it gets my attention. Not to be overly mercenary, but it is a feast or famine biz. Right now the table is overloaded with goodies. Just my $2.
Rental Property Investor · Columbia, SC · Member since 2020 · 245 posts · 275 votes
5y
@Pete Harper what do you think investors are gaining from purchasing properties so far over asking? Interest rates are good, but they’re not that good.
Investor · Millburn, NJ · Member since 2018 · 141 posts · 100 votes
5y
@Ryan Copeland
Bc many people have seen price increase and read on inflation. Many people just want to park money so it doesn’t get devalued when the Fed is busy printing more money. These may be your traditional investors who are looking for cash flow, but simply to hedge possible inflation. And stock is over valued even for their taste and is too volatile lately.
Real Estate Agent · Nashville, TN · Member since 2021 · 8 posts · 5 votes
5y
@Caleb Haynes
The market is crazy today across the US. I’m currently in an online class of realtors all across the US and we were all talking about the lack of supply and competition between buyers.
I’m based out of Nashville, TN and similar to Texas a lot of people are flooding in from New York and California and are willing and able to make cash offers above list.
To answer your question quickly.
I’m seeing houses go for around 8% over ask in my area. Depending on the home could be more or less.
Rental Property Investor · Albuquerque, NM · Member since 2019 · 60 posts · 50 votes
5y
@Caleb Haynes
On the two last properties I bought I was the only bidder so I got good deals. It’s difficult mentally to break down that wall but it is absolutely better to spend a lot of resources looking for properties that only you are bidding on than it is to go for others that tons of others also have eyes on.
Rental Property Investor · Cincinnati, OH · Member since 2020 · 84 posts · 81 votes
5y
@Caleb Haynes
Many investors are looking for ways to short the dollar. Especially large institutions.
Currently one of the best ways to short the strength of the US dollar is buy assets at low interest rates.
If you want to maximize your return and you think inflation will rise considerably due to the m1 money supply and printing going on housing is a good bet for that considering the asset usually keeps up with inflation and the leverage might not.
This is one factor that's influenced prices in my area as I've seen large out of state investors buy up dozens of homes or pay over asking because they want 300k in loans at 3% interest.