Multiple offers-no contracts

14 Replies

My partner and I have made several (at least 10) offers on separate properties in which we believe would be ideal for our buyers. Our process is gathering the ARV and MAYO and beginning our first offer at 80% of MAYO and working our way up to our final offer at 90% of MAYO. We have yet to get an offer accepted. Instinctively, we figure were doing something wrong. Although we remain optimistic believing it's all part of the process. My question is, as wholesalers yourselves, have you experienced the same curvy road to a successful deal?

It took me a year of marketing to get first property under contract and then 2 more months to close. 10 offers is not that many. Are these listed properties?

@Russell Ponce Thanks for the response-very motivating (not sarcasm)

Regarding your question- No, these are houses we located by driving around and taking note of major/minor repairs. We then use "yellow letters" to get in touch and hope for response

Ok cool. I don't do driving for dollars but I always thought if I did I would run addresses through records to make sure I was mailing the owner.

You might get 1 out of 50 offers accepted so keep on the grind.

Are you making cash offers with no weasel clause?

Joe Gore

Joe Gore I make all cash offers. I haven't included weasel clause but I would be happy to if they felt more secure. Isn't this further on in the process, More towards preparing the contract?

J Scott The main reason they say is that their house is worth more than what we have offered them. I couldn't tell you how far off I am with the seller cause they usually don't want to give the price they want. Although there was one that did- I was about 30k off from what she wanted and she wouldn't go a dollar less because that's what she owed.

Joe Gore

Originally posted by @Robert Zuccaro:

J Scott The main reason they say is that their house is worth more than what we have offered them. I couldn't tell you how far off I am with the seller cause they usually don't want to give the price they want. Although there was one that did- I was about 30k off from what she wanted and she wouldn't go a dollar less because that's what she owed.

 Two things:

1.  Sounds like you're not necessarily targeting sellers with enough equity;

2.  Sounds like the sellers you've encountered just aren't highly motivated (yet).

#1 you can handle by doing some due diligence and filtering your list better; #2 is just a numbers game -- for every truly motivated seller, you'll talk to 10, 20 or 30 not-so-motivated sellers.  Keep doing what you're doing and the deals will come...

What are you calling MAYO? 65% or 70% of ARV - repairs + your profit? Then 80% of that to start?

Todd Plambeck | [email protected] | TX Agent # 0681374

How many yellow letters have you sent to get these 10 responses (offers)?

323‑455‑7575 | http://www.RezaReport.com | CA Agent # 01874963

@Todd Plambeck Sorry, *MAO*. I determine the ARV. Subtract $XX for repair costs, 1 % for purchase costs, 3% for holding costs, 3% for sales costs (without realtor), $XX for minimum acceptable profit, and 3-5% for a hedge factor.

The traditional MAO formula is 70% ARV minus repairs and minus your profit. The 70% can be lowered based on house and/or location.

Its not the only formula but the 70% rule seems to be the most common use of MAO

@J Scott hit the nail on the head. These prospects that you are reaching out to are not motivated sellers. We are in the business of helping motivated sellers! If your marketing dollars are slim & you're going to try & hustle to get someone to let you lock their house under contract at a significant discount, you're going to make 100 offers. Don't get discouraged, you're one 'no' closer to a 'yes!' Keep making offers.