Real Estate Broker · Orange, CA · Member since 2008 · 380 posts · 87 votes
I get a ton of frustrated investors being beat out by other offers so I thought I would pull a list of Sold, Paid Cash, Fixers list for Orange County CA. Compare what you've been offering to what other investors have been paying. This should help you strategize for your next offer.
Thank you for sharing. Marie can you please expand on what your saying I think its true and very important. What type of skills do you believe give us the most advantage. thank you.
My point is that if your competitor is offering $250K on a $300K asking and you've already crunched and re-crunched the numbers and can't make your minimum profit if you pay more than $225K, then knowing your competitor's offer isn't going to help you better your offer. If your market is very tight and you hold back on your max offer, you may well be wasting time.
The real learning would be knowing if and how the competitor makes money by buying at $250K when you can't go past $225K. Is their margin lower? Crews cheaper? Loan funds cheaper? Is their ARV higher than yours? Are they inexperienced and just hoping and wishing.
I look at everything that sells that I make an offer on. And then watch to see what the exit is. I want to know what I missed. Sometimes it's exit value, but many times it's because I'm just super conservative on repair costs and big on profit. Sometimes the buyer is an owner occupant or landlord buyer with totally different or non-existent profit needs. But usually it's because I'm unwilling or unable to work the thin margins other investors can/will.
I get a ton of frustrated investors being beat out by other offers so I thought I would pull a list of Sold, Paid Cash, Fixers list for Orange County CA. Compare what you've been offering to what other investors have been paying. This should help you strategize for your next offer.
If anyone is interested I can post Los Angeles, Riverside, and San Bernardino Counties.
Interesting info. Agents always have perspectives that surprise me.
The only way this info is useful for strategizing one's next offer is if you are willing to pay more than the other investors. IMO most people are not losing out by making offers that are too low. Their offers are often already at their max. If you don't have the skills or budget to change your bottom line and offer more, it doesn't matter what other people are buying.
Is it your experience that investor buyers in your market aren't making their highest and best when the market is this tight?
Residential Real Estate Broker · Glendale, CA · Member since 2013 · 28 posts · 2 votes
12y
Thank you for sharing. Marie can you please expand on what your saying I think its true and very important. What type of skills do you believe give us the most advantage. thank you.
Residential Real Estate Broker · Glendale, CA · Member since 2013 · 28 posts · 2 votes
12y
Thank you for sharing. Marie can you please expand on what your saying I think its true and very important. What type of skills do you believe give us the most advantage. thank you.
Thank you for sharing. Marie can you please expand on what your saying I think its true and very important. What type of skills do you believe give us the most advantage. thank you.
My point is that if your competitor is offering $250K on a $300K asking and you've already crunched and re-crunched the numbers and can't make your minimum profit if you pay more than $225K, then knowing your competitor's offer isn't going to help you better your offer. If your market is very tight and you hold back on your max offer, you may well be wasting time.
The real learning would be knowing if and how the competitor makes money by buying at $250K when you can't go past $225K. Is their margin lower? Crews cheaper? Loan funds cheaper? Is their ARV higher than yours? Are they inexperienced and just hoping and wishing.
I look at everything that sells that I make an offer on. And then watch to see what the exit is. I want to know what I missed. Sometimes it's exit value, but many times it's because I'm just super conservative on repair costs and big on profit. Sometimes the buyer is an owner occupant or landlord buyer with totally different or non-existent profit needs. But usually it's because I'm unwilling or unable to work the thin margins other investors can/will.
Real Estate Investor · atlanta, GA · Member since 2013 · 456 posts · 237 votes
12y
Part of your problem maybe the irrational behaviors of some of the hedge funds and venture capital backed buyers groups in the markets. If you have a billion dollars that you HAVE to spend, you tend to overpay. Some of these groups look at CA..or any market really and think whatever the value was 5 years ago, will be the value again soon. I would think that MLS or FMLS isn't going to be the best place for most investors to hunt & buy anyway. Almost everything I buy is off-market and through wholesalers.
You have to crunch your numbers according to your own methods and formulas. Mine will be different than most of you....especially is you are flipping retail and tied to appraisals which I am not. I can pay more than most of my competitors but I tend to operate on the lower end of the market. The best thing you can ever do in the current market is to present close to your best CASH offer from the get-go and hold to that. I can't tell you how many times my offer has been rejected and then the seller comes back in a month (usually after the "buyer" failed to assign the contract or flip to another buyer for a simultaneous closing) to ask me if my offer is still good. Depending on the numbers or what else I have purchased, if I have room in the stable, I make the deal.
You have to avoid bidding wars. Stick to whatever you plan is and, if you get beat out...guess what? There are plenty more where that one came from. I'd venture to bet that in 5 years the bulks of what the funds are all scooping up will all find there way back to the market.
Investor · Fort Lauderdale, FL · Member since 2012 · 1k+ posts · 465 votes
12y
Pocket buyers.
When I look back to the closed sale prices of some homes I bid on and lost, prices end up being $100 over, or $500 below my price. My offers are usually all cash with POF with no inspection contingency so I doubt they would have better terms. The seller's agents have their own buyers lined up.