Howdy Scott! I am probably in the minority on BP, but I am not a fan of the "throwing out offers in volume and crossing your fingers" approach. I try to stay in contact with wholesalers in my area, scour the MLS, Zillow, LoopNet, and work with a great, investor friendly agent. When something pops up that makes sense, I jump with an aggressive cash offer and generally have had pretty good success with that.
When you find an MLS property that looks good, something I'd suggest to avoid leaving money on the table is make an offer that you are comfortable with, but include an escalation clause that will allow you to beat higher offers by a defined dollar amount, ie, if anyone outbids you up to a certain point, you'll beat their offer by $250. Require that they show you the highest offer that you are going to beat.
Best of luck!
I just dont understand this strategy. You know how many offers I put in to acquire a property, 1...maybe 2. Either I know I can acquire a property at the price I want, or I know I cant and Im not going to wadte time throwing spaghetti at a wall.
@Scott Graham 3-4 offers per week?? Weak sauce man...try 300-400 then come back and complain if you haven't gotten anything under contract
Jk -- without knowing anything relevant about your market, only suggestion I have is to maybe widen your search radius and hopefully this will uncover areas with potential that you didn't know about before
Originally posted by @Scott Graham :
Hey BP! My partner and I are trying to devise a plan on how many offers to put in a week. Our goal is to complete 6 flips this year. We have been running our numbers on MLS properties and putting in 3-4 offers per week. Still haven’t gotten an offer accepted. How many offers per week should we put in to achieve our 6 flips?
Anywhere from 0 to infinity. Who cares?
Your approach is wrong. There is no "magic number" of how many offers to make because there is no ratio that exists of "offers, to accepted offer". The number of offers you make have nothing to do with getting one accepted...as you are finding out.
Me, quite often I get my first offer accepted. That's because I'm not concerned about a "number of properties"...I'm focused on the "deals"...big difference...and, I'm not focused on the number of deals, because I'm in a "micro-market" that is filled with them.
Are the market(s) you are making offers in chosen based on the financial profile you've established to achieve your financial goals, or anywhere you can find a property to bid on?
Agree with @Corby Goade , @Russell Brazil and @Joe Villeneuve . Throwing out dozens and dozens of offers appears to me a waste of time. When investors come to me with that strategy, I thank them for their time and suggest they go to some other agent who is an order taker and not a consultant.
Much depends upon your individual market but a good agent knows how to win deals and what will work. Most markets around the country are struggling with low inventory. There is no way 99% of those sellers will accept a 70% LTV etc type offer especially when they are new on the market.
So you say why not throw out 100 offers to find that one who will accept? Because while you are wasting time - and it does take time to write, distribute and respond to offers - the smart agent has focused on that one that will work and it will be gone by the time you get to it.
Scour listings on the MLS. Look at dozens or hundreds of homes. Look at comments, time on market, ARVs, etc and narrow it down to the few that have a chance for success and attack those.
I list quite a few estate homes . A healthy percentage of those are, well, to put it kindly, outdated and in disrepair. If I put a home on the market for $525,000 with an ARV of $600,000 that needs $50,000 of work, that is not, initially, a flip home but one priced to attract an owner occupant looking for sweat equity. Ballpark I would say a flipper, looking for a $25,000 profit would need to buy at a maximum $465,000 - maybe lower.
There is no way I - or the seller - will accept that offer after a week or two on the market. If $525,000 doesn't get a contract, we reduce to $510,000 or so. If that doesn't work, we then go to $495,000 and maybe then the $465,000 gets attention.
But really why waste time and energy submitting $465,000 on a newly listed $525,000? But I get those offers all the time. It wastes my time, the other agents time and the buyer and sellers time as I need to present all offers.
If I was going to go to a casino to gamble (I don't), I could keep putting money into a slot machine and I might hit a big one but will probably go home broke. However, if I worked on learning how to count cards, I could sit at a blackjack table and have pretty good odds of walking away a winner. (Okay, I know multiple decks - probably would get thrown out, etc but you get the point.)
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