What killed the deal?

Question

What deals are you seeing that you’re choosing NOT to buy right now? What’s killing deals for you in today's market?

I'm located in a primarily cash-flow based market (not appreciation based), so I want to learn what people are looking for - or really trying to avoid - in their next deal.

Stacy Raskin · Answer

Sellers who think they still have the upper hand in the market which isn't the case in most markets. Depending on the market, it's more balanced to a buyer's market so buyers are having more success with sellers paying credits which is a win for buyers. For sellers, it seems that in the many markets, sellers are still pricing listings too high for this current market which is why they are sitting on the market much longer than they were a couple of years ago.

Stacy Raskin · Answer

Yes, I like Chris Voss' work. I have read "Never Split the Difference." I think the deal needs to work for both buyers and sellers while being realistic about where the market is for their specific area.

Andrew Caranto · Answer

Ha... Yes, leaning on the hope that it still remains highly valued and that it will be easy to find a buyer willing to give asking. I get it, but it does need to be balanced with the realism, and for some people, that can be exceptionally hard to get honest with themselves about. I read a book a couple years ago called The Full Fee Agent by master FBI hostage negotiator Chris Voss and Steve Shull that handles situations like this. I go back to it from time to time because the information is just pure gold when it comes to working with sellers.

Andrew Caranto · Answer

One take that I've witnessed is that they die in the follow-up. Slow response to a seller, missed inspection deadline, financing that wasn't lined up when you needed it.

Even if you hear "no". Follow-up. Keep checking in here and there. Don't be annoying, but be persistent. Sometimes you will always hear no, but sometimes you will also finally hear yes.

Drew Sygit · Answer

Properties priced at market rate, not ROI-based.

Kiernan LaFaver · Answer

Right now, in my market, its difficult to come across anything that cash flows from a single family perspective. We're appreciating upwards of 8-12% YoY, so prices are escalating far faster than the rental market can keep up with. Outside of purchase price, capex and deferred maintenance are big deal killers, whether the property needs new roof, structural work, or is just a complete gut job. On top of that, buyer demand is so astronomically high in my area that its not uncommon to see 5+ offers on properties that have only been listed for a handful of days