Hey BP,

One of the things i came across while reading Brandon Turners- the book on rental property investing- says “analyze 60 houses a month, make offers on 6, have 1 agreed upon”. Not sure how this process works. If I was to make offers on 6 and somehow all 6 get accepted, am I obliged to purchase all 6? Are offers legal binding contracts to purchasing the property if accepted by seller? Or is there an option to back out?

Thanks!

Originally posted by @Nader Hachem :

Hey BP,

One of the things i came across while reading Brandon Turners- the book on rental property investing- says “analyze 60 houses a month, make offers on 6, have 1 agreed upon”. Not sure how this process works. If I was to make offers on 6 and somehow all 6 get accepted, am I obliged to purchase all 6? Are offers legal binding contracts to purchasing the property if accepted by seller? Or is there an option to back out?

Thanks!

 If the listing agents catch wind you are doing this, all 6 listing agents will throw your offers in the trash.

But, anyways, typically the purchase contract will have an inspection contingency, wherein if you do not like the inspection results, you can back out within a certain number of days. What exactly you'd need to "not like" is generally understood to be ridiculously broad in scope, which is exactly why the 6 listings agents would all throw your offer in the trash if they knew you were doing this.

Fortunately, or unfortunately, that book and ones like it have gained an incredibly wide readership, now there's however many hundreds of thousands of people near me with "California Money" doing stuff like that, I'm not in your neck of the woods but I can't imagine that listing agents aren't attuned to this sort of shotgun strategy by now.

@Chris Mason great information! when you say things you need to “not like” is very broad in scope— are you stating many investors who do this tactic could easily use the inspection to get out of an offer?

Originally posted by @Nader Hachem :

@Chris Mason great information! when you say things you need to “not like” is very broad in scope— are you stating many investors who do this tactic could easily use the inspection to get out of an offer?

 Yeah. Most people aren't buying multiple houses at once just because they had multiple offers accepted. 

Originally posted by @Nader Hachem :

Hey BP,

One of the things i came across while reading Brandon Turners- the book on rental property investing- says “analyze 60 houses a month, make offers on 6, have 1 agreed upon”. Not sure how this process works. If I was to make offers on 6 and somehow all 6 get accepted, am I obliged to purchase all 6? Are offers legal binding contracts to purchasing the property if accepted by seller? Or is there an option to back out?

Thanks!

The answer is it depends. If you're submitting an LOI, it is non-binding. If you're actually filling out a Purchase Agreement then it would behoove you to make offers only on those assets you're serious about. I think the philosophy is analyze 60 properties, make 6 offers, and get 1 accepted. What that means is actively look at deals and make offers. The probability of getting all 6 accepted is not very likely assuming you're underwriting your properties correctly and sticking to your guns. Hypothetically, if you were to get all 6 accepted, just inform the parties that you're withdrawing your offer and do it in writing. What state are you in? This process is for California.

@Enrique Huerta I’m in Michigan!

Hi Nadar,

I feel that Brandon is basically saying that the offers will be low enough, that the odds are quite low they will all get accepted. If for some reason, more than one does; you would only "Bottom Line" sign (acknowledge seller accepted) on the one you want. This would only put you under contract on that one. Sure, sellers may be a bit emotionally annoyed if they feel they accepted a low offer and then we backed out. However, it's no loss to the seller as they never removed the house from the market so they aren't losing anything.