OfflineHi, Guys:
I'm having trouble getting offers accepted. I've put in at least 40 and no deals. I know they're low, but it's the kind of profit my buyers are looking for. Any advice??
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25:1 Strategy
Posted on: Thu, 11/15/2012 - 23:41
1. Fill out your bio page.
2. 99% of the time your first offer will be rejected. Follow up is critical.
3. Make sure you are offering on properties that will go to an investor and not an owner/occupant buyer.
4. As inventory decreases prices WILL go up.
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
How are you calculating your offers? Knowing the formula you are using and giving the forum an example of how you are calculating offers will allow the forum to give you some feedback.
I'm estimating FMV, then taking 45k off the top because that's the profit my buyers want. From that, I'm subtracting out the estimated cost of repairs, closing, and holding costs, then depending on what number I'm at then, a couple thousand for myself.
Is this $45,000 profit on a $100,000 house or a $500,000 house? Most real investor/buyers work on percentages, not a set dollar amount.
I would also make sure you are using Comps that have been fully rehabbed. Get your true After Repaired Value (not FMV) and base your offer off that number. Comps like your subject property that are in great or just rehab/remodeled condition are the ones to use.
If you have filled out your BIO page I would know what part of the country you are in and give you a little more advise.
Michael Mangham
Mentoring/Team Building Nationwide
MD Home Acquisitions LLC
Knowledge is power, but execution trumps knowledge. Tony Robbins
http://www.mdhomeacquisitions.com Seller site
http://www.mdhomeacquisitionsbargainhouses.com Buyer site
http://www.mdhomeacquisitionshousehunter.com Bird Dog Site
http://www.mdlodeals.com Tenant/Buyer site
As Michael said, the $45k profit may be unrealistic. Have you narrowed your offers to properties that have had a price reduction?
Start tracking your offers. If you are using your agent to make these offers, tell your agent that you are tracking your offers and would a copy of the contract showing were the seller has "signed" rejecting the offer. This will also verify that your agent is really making your offers for you.
KEEP MOVING FORWARD
"If it is important to you, you will find a way. If not, you'll find an excuse."
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Thanks for all the great feedback, guys. I'm working in RI, where home prices are generally pretty high. I'm looking at houses around the $150,000 range, and for these, the buyers are looking for at least $45,000 in profit. I guess maybe I need to shift my focus from finding good deals to finding more reasonable buyers. As for getting the rejections, I will do that too. I didn't even realize that was an option. I also think maybe I'm just not finding sellers who are motivated enough to take offers from wholesalers. Among other leads, I'm using making lots of offers off MLS. Many of them have been on the market for a long time, and price reductions are definitely on my list of must-haves.