So, the inevitable is coming true in small town America and houses are staying on MLS for less days before going to retail buyers...and the deals on MLS are generally few and far between. I just implemented my direct mail and other strategies for targeting motivated sellers, but it will be a while before my efforts bare fruit...
In the meantime, I continue to look at houses on MLS, but my offers are way off fair market and way-way off ARV. I am confident in my offer formula, but am becoming more reluctant to submit offers through my realtor. Anyone else experiencing the same issues?...
Yes, MLS has all but dried up here. National rental chains are paying close to retail. We do not have strong enough rental rates to support that so I am going to wait till they realize it and have to fire sale. Recently started my direct mail campaigns and have been pleased with the results so far.
Deals don't fall off trees these days! Seems like a major change in the market has occured to me. Sensing a slower paced market for a while.
I'm licensed (so I can make my own offers), and yet I've probably made fewer than 5 offers off the MLS in the past 18 months.
Licensed as well. Have only bought 2 off the MLS in the last 18 months; but they fly off the shelf when you list the finished good there!
If you are in flip or hold section, try seeking out wholesalers. If you are wholesaling... step up your game! A lot of my purchases are coming from wholesale, personal direct marketing, and sheriff sale.
There are still deals to be had, but what worked 3 years ago is no longer relevant. REOS are hot commodities on the MLS, low-balling is a thing of the past. Evolve or wait patiently for the next downturn [could be awhile]... Cheers!
I am a realtor and investor, and I am seeing the same thing in upstate south Carolina. I have been ready to buy for 4-5 months now, and have only made an offer on one property. I have noticed that many of the reo properties are starting out overpriced.
You and I are in the same area, and I am seeing the same thing. I am on the mls everyday, and haven't been able to find any great deals in Anderson, pickens, or Oconee county lately. Going to go look at a house in Easley and piedmont later today though (I'm not real thrilled about either one though)./
Its hard to buy off the MLS in general. I see property prices that are sky high and imho not attainable. For the lower priced properties, there is a lot of competition. I sold a property in 9 days over Christmas. I sold another property in 8 days. Both were sold to rehabbers through the MLS and there were competitive offers. Both buyers are paying cash and one had no inspections and other a minor inspection.
When I was doing research for writing the book, I found that I only bought out of the MLS for 25% of my purchases. I'd recommend that you develop other non-MLS sources for buying property, to get into arenas where there is less competition.
This past year I bought 22% through the MLS and year before I bought 26% through the MLS, so I'm still in the same ball park.
@Adam Drummond We just opened our own brokerage last month. Primarily to have MLS access although we will make it a small profit center also with some property management and working with select investors. Doesn't seem like such a great idea now. Get in touch with me and lets talk. Maybe we can work on finding some deals. I have already started a direct mail campaign that has had a very good response rate.
I buy a higher percentage through MLS, but I'm buying to hold/rent versus flip, so most of the time I'm OK with paying 75% vs 70% as long as the cash flow is there.
@Ryan Haase get em while you can! Even hold properties in the midwest are well above the 75% mark through the MLS. I am seeing 6-8% advertised caps on multi-family [before you make the adjustments for actual operating expenses, it is gross how negligent some pro-formas are]... The scarier part is: they are selling.
My guess is with 18 months they are behind on taxes, and within 24 you start seeing them in foreclosure. The beauty of overpaying... Most of these are not corporate buyers, typically individuals / "new investors".
Same here. The MLS is all but dead. The last few MLS deals that I have had, I have had to pay at least 10% over asking with 10% EMD on each deal.
Wow. I hope this trend doesn't extend to where I am. I was just in a multi-bid situation, but it was with a VA property that was listed almost 50% below value. I ended up getting it for 5% over asking which was still below 75%.
I am a broker and co-owner of a property management company in Tulsa, OK. It has been a real struggle over the last 12 months to find inventory for investors looking to acquire more SFR rental properties. Prices are up and as a result projected returns have been on the decline.
In the past we sold a lot of REO, especially HUD's. There is now only a trickle of HUD properties, and they are being bid way up, along with all other types of REO and auction properties.
We are now actively looking at other property types, including duplexes and new construction.
I did some research and it seems that the banks are selling their non-performing loans before they hit foreclosure. Additionally, the investors buying these NPLs are allowing the mortgagors to remain in the home for increasingly longer periods of time before they complete the foreclosure. In fact, the average number of days a US borrower will be in the foreclosure process is now over 1000, compared to just 255 in January 2008.
MLS is tough all-over from what I hear. Charleston, SC is no exception. We were extremely frustrated with the MLS in 2013 and the first part of 2014 and I truly believe is is getting tighter.
In May, a friend/mentor recommended a book last year called "Go for No" that changed my mindset regarding MLS offers. Making a offer and being out-bid is not a loss, every NO is a step toward a YES!
In 2014, we made 4-5 MLS offers per week last year, and I plan to keep that up in 2015. It took 2 years to find a realtor who is willing to scour the MLS for suitable properties, show me 5-6 properties a week, write up all the offers, talk to the listing agents, and have skin that is thick enough that he is not "embarrassed" by my cash offers. The key is that I don't waste his time. My property inspections take 10-15 minutes, my offers are all-cash, and we just stuff the pipeline. My realtor tells me that efforts on my behalf consume approx. 8 hours of his work week and he and I estimate that I will buy 1 property every 6 weeks through him in 2015. I am happy and he is happy.
We have purchased 1 REO in the past year and 2 MLS properties from homeowners. Very low success rate considering that we made at least 200 offers to get those 3 deals. BUT, a win is a win.
REO's and short-sales SUCK! The "sweet spot" for me is properties that have major structural or mechanical issues that preclude sale to a non-cash buyer. i.e. properties that won't meet a lender's standards for a mortgage. Even on these damaged/neglected properties, we are often outbid by cash buyers who pay too much IMHO.
Bottom line - its a numbers game & we just keep swinging for the fences.
Russ Scheider, Charleston All-Cash Homebuyers | 843.302.1936 | http://charlestonallcashhomebuyers.com
Thanks @Adam Drummond sounds like we're in the same boat right now...
@David Krulac thanks for the wisdom...are you marketing for properties or are these deals that are finding you?
@Nate Garrett thanks for the information. Glad to here your perspective.
@Russ Scheider appreciate the perspective...I am currently contemplating giving my realtor a break, she has been spending a lot of time showing me properties and making offers...sounds like you have a good relationship with your realtor. Best of luck
I do very little to no marketing for sellers. I do market for buyers. I look at reo, sheriff sales, foreclosures, probates, auctions, huds, and about 20 different buying strategies. I find by using different methods, when one method cools down, something else is cooking.
To a man with a hammer, everything looks like a nail. I want more than 1 tool in my tool box.
Thanks @David Krulac Good analogy...I feel like our strategies are very much alike, but I am really just getting going in this business...I like your model, seems like success is really inevitable, just gotta keep plugging away.
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