Bid strategies?

Question

Hi.  New here.

We've put two offers in.  We were outbid on the first one and I expect to be outbid on the second one too.

The problem is, Tampa's a hot market, and these REO's are being snapped up by either occupant-owners or investors who don't need to make a profit.

I'm a realtor and my husband has a construction background, so we know about how much the properties will cost to rehab, and how much they should sell for.  We put in the highest bid we can and still make a decent profit, but so far nothing.

What kind of strategies do you all use to get your offers accepted?

I have access to a pre-foreclosure list and plan to start working it next week.  Any other ideas?

Dave Bingham · Answer

@Jennifer Talcott

Hi Jennifer. We talked about something similar to this in another thread an it actually created the impetus to create the REIA. Here's the link:

http://www.biggerpockets.com/forums/311/topics/163766-tampa-hillsborough-county-foreclosure-auction-help

Jennifer Talcott · Answer

@Crystal Smith

Thank you so much for the suggestions.  #2 - Offer good till sold is one I haven't heard of, and it's a great idea.  I also think my inspection period is probably too long (10 days).  But I don't want to cut it back to less than 5 days, so I can give myself time to research for sinkholes, liens, etc., and to inspect.

How fast is a quick close do you think?  I've put in 3 weeks just to give the title company time to do their thing.  But how long does a title company really need?

Crystal Smith · Answer

Here are some strategies:

1.  Make a ton of offers.  If I read the original thread correctly, you've only bid on 2 properties & they are REO.  If it's really that competitive you may have to make offers on properties site unseen to compete, then use the inspection period to complete your due diligence.

2.  Make your offer good til sold- Some of the deals you're loosing out on won't close & they will go to the back up offers.  If your offer is good til sold it may be chosen/accepted later.

3. Provide Proof of Funds to support your cash offer and/or finance offer.  Cash offer goes to the top of the stack for review by the seller.

4. Fast closing goes to the top of the stack for Bank REO deals

5. Short or no  inspection period- The shorter the better.  It's high risk but an offer w/ no inspection contingency will be stacked above an offer w/ an inspection contingency.

6.  Don't just stick to bank owned MLS REOs.  Find some good wholesalers w/ off market deals

I'm sure there are other strategies that you can find thru the BP forums/archives.

JPaul Mills · Answer

@Jennifer Talcott I would recommend Like @Elizabeth  Colegrove said.  get yourself a few really good wholesalers in that area and they will be able to find what you are looking for.  As a wholesaler myself I actually say that I am a professional MARKETER instead of a wholesaler because we without consistent marketing I can't get any leads which in turn make deals, but I need an END CASH BUYER to flip it too and that's where you would come in.

Jeremy Tillotson · Answer

@Jennifer Talcott so having a construction background myself I look at a property, and then after I am comfortable, I get rid of all my weasel clauses, so I stated "buyer is aware this is an older home with defects, and has inspected the home, buyer waives any and all contingencies and acceopts as-is where-is contingent upon clean title. Large Ernst money and closing asap. I put closing within 30 days, however buyer is capable and willing to close with 7 days if title can be produced in time. I know the property before I do this obviously. I think alot of investors have a bad name from people using weasel clauses.

Ted Larson · Answer

Great advice, Dave. My clients and I find the exact same results. Find a lot of properties, make a lot of offers (ideally in cash) with large earnest deposits, no contingencies (we pre-inspect on the properties that are most interesting), then make an offer that makes sense. If you find yourself in multiples (and you probably will), go to the max offer you are able to make while still maintaining the necessary profit margin.

Cheers to a Healthy, Wealthy, Happy, and Wise 2015!Ted

Dave Gallogly · Answer

We find here in Minneapolis the real estate market has really come back as well.  Getting deals has gotten really hard for us as well (we flip houses).  We have learned that you have to put in lots of solid offers that make sense. If we really like a property, we will put in offer with High earnest money, no continuances, all cash, close in 14 days.  We find that if makes our offer hard to look past, but you have to be in the ballpark with other offers to make it work.

Good Luck,

Dave

Jennifer Talcott · Answer

Yeah Aaron, the Tampa REO market is getting brutal/stupid.  You really can't make money in those situations.

Did you check out the Tampa foreclosures link that @Dave Bingham posted on this thread?

Jennifer Talcott · Answer

"let it rip tater chip"  Ha ha.  Love it Joshua.  Thanks for the encouragement!

Aaron T. · Answer

I was also outbid on a REO in Tampa this weekend. The last bid i was aware of was 20k over the list price. The bank took all offers until the closing date and time.....essentially a auction.  At the price that was bid, there would not be any money left in the property. at that point you could only hold it and hope for cash flow or appreciation down the road.

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