Made my first offer! What I learned

[Ashley Benning]

I pulled the trigger on a property last week, and found out my offer was not accepted. It's okay! I learned a lot, and am ready to try again. Here's what I learned: 1. HMLs actually seem to respond better if you are already under contract than if you are in the offering or researching phase. They were happy to provide me with a LOI, but I got the impression they deal with investors more AFTER they have a contract. 2. Most HMLs offer the same terms. As a first-timer, here in Los Angeles the rates I was offered were averaging 10-11% with 1-3 pts down, 6-12 months with no prepayment penalty after 3 months. I can use those numbers moving forward in my carrying cost calculations. 3. Nailing that ARV is really important. I had to submit my offer within hours of finding the property because there were multiple offers and they were putting everyone on hold, so I erred very conservative on my ARV. I realized after I submitted my offer, and with some more discussion with my realtor, that I really could have offered $20k more and still made my preferred profit because the ARV was probably higher than we had initially believed. Maybe that higher offer would have won me the bid. 4. I work best with realtors who have my same hours: this realtor was up early with her baby when I was up at the gym, so we were getting things done via text at 5:30am. It was awesome! I also learned I work really well with a realtor who lives nearby and is about my age and likes to text. 5. Keep emotion out of it. I tried really hard to not get attached to this property, and I think I did well. It would have been a great property, a perfect first flip, AND I just liked the feel and bones of the property and the vibe of the neighborhood. I think that kind of attachment is fine, because you want to care about doing right by the property. But anything more than that is problematic because it's not MY home even if I DO win the bid, and if I don't get the house and have been attached then my heart is broken. When I found out I didn't get the house I felt a twinge of regret at not offering more, but immediately thought "okay, on to the next opportunity." I think that is how I want to feel. What were your lessons from your first investment property offer? So, here I go--on to the next opportunity!