Help! Getting beat out by cash offers - Need advice!

14 Replies

I'm sure I'm not the only one who has been getting beat out by cash offers on SFH's that need rehab. I don't have a PML in my pocket and have been using hard money. Even with hard money it has been taking 30-45 days to close due appraisals. What has anyone done to overcome or be able to find PML's to fund the cash purchase? Needing tips and advice as I'm getting frustrated after several losing offers, even at full price. The market I am in is very hot which doesn't help for purchasing but does for selling in Florida. Basically you have to have cash, close quick and no contingencies. I do not have the 250-350k cash quite yet to do that. Help!

Originally posted by @Trace J. :

I'm sure I'm not the only one who has been getting beat out by cash offers on SFH's that need rehab. I don't have a PML in my pocket and have been using hard money. Even with hard money it has been taking 30-45 days to close due appraisals. What has anyone done to overcome or be able to find PML's to fund the cash purchase? Needing tips and advice as I'm getting frustrated after several losing offers, even at full price. The market I am in is very hot which doesn't help for purchasing but does for selling in Florida. Basically you have to have cash, close quick and no contingencies. I do not have the 250-350k cash quite yet to do that. Help!

Only look at  houses priced at

How much cash you have until you have the 250-350k 

I too am in FL In Zillow I only put in search terms for 90k or less as I am not willing to risk more than that at This time.   I feel comfortable offering full ask without actually going to see the house, no inspection and no contingencies at that price 

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@Taylor L. no these have been national hard money lenders. I am just in the process of meeting people and trying to establish some relationships. I know it takes time so I will keep working on it. I have not put out the JV request yet but I'm getting darn close! Although I don't know if a JV would want a split on a 60-70k profit? I'm not sure where that threshold is for someone putting up the money...

@Michael Plante the area I have been working in has just exploded in the last year plus in SWFL. I am not finding anything below 100k anywhere near me or even within two hours (Tampa area) although I just started looking there. The ones I have found so far are around 165k-200k+ but I don't know the areas yet so I am still studying those. I don't want to make a mistake that will cost me my life savings so far if you know what I mean. As Taylor L said above I may just start doing JV deals if I can find the right partner. I appreciate the input.

Originally posted by @Trace J. :

@Michael Plante the area I have been working in has just exploded in the last year plus in SWFL. I am not finding anything below 100k anywhere near me or even within two hours (Tampa area) although I just started looking there. The ones I have found so far are around 165k-200k+ but I don't know the areas yet so I am still studying those. I don't want to make a mistake that will cost me my life savings so far if you know what I mean. As Taylor L said above I may just start doing JV deals if I can find the right partner. I appreciate the input.

 I know the area very well.  It’s within a stones throw of my farm area 

There are opportunities there exactly in the amount I said I look for above mobile homes 

I laid it out for you above basically how I do it.   Sorry but that is as much info as I am going to reveal 

I Will say I am on course to Net before taxes 1/2 mil this year flipping.   Just me working part time and one part time handyman 

Originally posted by @Michael Plante :
Originally posted by @Trace J.:

@Michael Plante the area I have been working in has just exploded in the last year plus in SWFL. I am not finding anything below 100k anywhere near me or even within two hours (Tampa area) although I just started looking there. The ones I have found so far are around 165k-200k+ but I don't know the areas yet so I am still studying those. I don't want to make a mistake that will cost me my life savings so far if you know what I mean. As Taylor L said above I may just start doing JV deals if I can find the right partner. I appreciate the input.

 I know the area very well.  It’s within a stones throw of my farm area 

There are opportunities there exactly in the amount I said I look for above mobile homes 

I laid it out for you above basically how I do it.   Sorry but that is as much info as I am going to reveal 

I Will say I am on course to Net before taxes 1/2 mil this year flipping.   Just me working part time and one part time handyman 

Michael that is awesome!  Congrats on a system that works for you and making good profits.  Mobile homes are not for me at this time but maybe down the road.  Right now I am focusing on a Tampa suburb that may pan out, I just need to do more research and watch out for bad areas.  Prices are cheaper than Cape Coral area so maybe its a better place for me to focus on and build up my cash reserves.  Thanks again and maybe I will run into you sometime in the future.  Take care.

I don’t think the letter are illegal, but what’s said in the letter could violate huds protected classes. For example saying “I can see me and my family celebrating Christmas in this home” could violate 2 protected classes: familial status and religion. 
If your loans require an appraisal and take 30-45 days to close, you have more of an extremely high interest rate conventional loan. You need to find a better lender.  

Hello Trace J. On a current Search of Zillow I cannot find a lot of LAND under $100,000 in the whole State of Florida. I just sold my last house in Tampa, next to the I275 Hwy, behind the P.O. on Nebraska and Sligh. Six lots up from me on the corner a Broker sold a 3/2 block home, without a garage or fence for $383,000 six months ago in one week. She gave up Flipping in Tampa ten years ago and just finds "affordable" lots to build this one type of house. She had three for sale six months ago and was looking to buy multiple lots together, to do multiple builds without her Cash Partner. He did not want her to drop him as things were going so well. She has her office near Citrus Park with seven employees and does it all on her own, without a truck. This is a kick-butt, all her ducks in a row, working Smarter and not Harder, lady. Maybe, the numbers don't work for you to do Houses in Hillsborough County and you could continue to rehab Trailers and Manufactured Homes in Pinellas? Where there is a Will there is a Way. 

With an appraisal contingency and a 45 day close you have a worse offer than a 10% down second home buyer that can close in 30 days.

The best way is to call listing agents in your area -- ask them about deals that JUST closed and ask about what made that offer win.  I do that regularly here in Pinellas (Largo / Seminole especially).  For your price point, you will have about half financing if your area is like mine.  That's below median and well below average, so there are a lot of financed deals there.

What I see and hear: 

Cover an appraisal gap up to a certain amount to give the sellers peace of mine.  That may mean that you have to drop your price point to leave room in your budget.  That's what the people that are beating you with financed offers are doing.  Doing this makes you a bigger fish than your competition so you look stronger to sellers.

Show POF with your offer. Most sellers (and listing agents are coaching sellers) want to see that you have the cash on hand to actually buy the house. I am literally waiting for POF from a buyer right now (in your price point) because the seller wants to see POF to cover the down payment in order to accept an offer.

In your appraisal contingency, put a shorter date than the 10 days prior to close.  Even capping the appraisal at 2 weeks gives a better time frame.  If the appraiser absolutely can't make it out in time, you can renegotiate a few more days, or the seller can walk, but at least you got to that point.  MOST sellers will wait if the appraisal is scheduled by then or has been done but you're waiting for it to come back.  In Pinellas County, they aren't really taking more than that right now.

Shorten the inspection period.  You should have an inspector(s) that can get out in a week -- put that in the contract.

Put a stronger EMD -- and put another EMD after the inspection period -- this helps immensely. If it scares you, then you may not be as serious about the house as you thought, and the sellers know this. In the same vein, know your contract and timeframes so you know how and when and if you get that back if the contract falls apart.

AND. . .  .Build rapport with the listing agent / seller!!!  I cannot over emphasize this.  A lot of clowns are walking around and of you are a professional, it shows.  Many of my contracts won for buyers were solely because the listing agent went to bat for me and my team.  AND I've won over sellers when I get a chance, as well!

Good Luck!  

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@Dan Maciejewski wow you are certainly getting quick appraisals! The hard lender I use it takes them awhile. I have been using 30 days for closing lately, larger EMD and shorter inspection period even when necessary. I have waived some inspections when I feel comfortable with some of the homes. I do send a POF letter with every offer as well which may or may not help me. Thanks for the tip of offering more EMD after the inspection. I think I will do that from now on. As for building rapport I certainly try with the agent but rarely do I see or talk to the seller these days - its all been just with the listing agent over the phone usually or the rare case I catch them in person. Great tips though and I appreciate it!