Getting outbid on Offers - Advice?

Question

I've been looking at house after house and running my formula the same as always in order to price out the properties.

My rehab figures are solid bc I know what it costs to do the work and my ARV's are accurate bc I have all sold comps from MLS. I even feel like my offers will come in a little higher than most wholesalers bc I am not assigning it to anyone since I'll be doing the work. I prequal all properties on the phone and give a ballpark figure to see if we're on the same page and if we are, I set up an appointment to see the house.

Lately, I've been missing opportunities bc another investor goes to meet the seller after my appointment and offers a bit more than me or different terms.

I know there are plenty of people out there who are going to overpay for a property and the majority of the people I lose out to are doing just that. However, I'm also tired of it and want to pick up some more properties.

I'm looking for any personal experiences anyone has had with this and some tips on how to be the winning offer more often than not (even if your offer is less than the competitor).

Thanks

Bill Gulley · Answer

Hi, I agree with Rich, you might assess your valuation and market startegy, are you being realistic? Others may also have a rosey outlook for the future, a point of view you may not share and they may be willing to take less of a return now for a payoff in the future, so again, is your strategy competitive in your market.?
Being that, pay for a property what it is worth to you, not what it might be worth to someone else (unless you're flipping it to that guy, lol)
Being in competition with bigger investors can be hard to visualize, with them paying so much....but their holding costs may be alot less than yours. They might have a full time handyman, blanket insurance policies, referrals and tenant overflow from other buildings they own, so you might be comparing your situation to theirs and that could be apples and oranges. So, don't base you deals on what others might be paying..good luck, Bill

Account Closed · Answer

If you can write super clean offers you have a better chance of getting accepted instead of another investor.

All cash, no contingencies, extra fast closing is a very attractive offer.

Don't insult the seller. It's insulting when you run the property down, trying to get the price down. If you offend the seller, they are going to prefer to do business with someone who treated them nicer.

Is your market recovering? When the market was hot around here, it was very difficult to buy because there were so many amateur investors willing to over-pay by a considerable amount, and who (I suspect) had no idea how expensive the repairs were going to be.

If your market looks like it is going up, there is gong to be competition from people who don't really know what they are doing. All you can do is to keep writing offers.

Try to find properties that no one else knows about.

Randal McLeaird · Answer

Well guys, since that post I've got two sweet deals under contract. I appreciate the advice. I've never really strayed from my formula and all the deals I do get are solid. So, not really worth crying over spilled milk on the ones I don't get....just want them all!

Brooks Conkle · Answer

From my experience in the past 6 months....
1) If you have your formula, stick to it.  You might get outbid, it's gonna happen.  This won't be the last time :)   Maybe your competition has cheaper costs somewhere (money, labor, selling costs) or maybe they are going to lose on the property.  That you won't know.
2) Build relationships with key agents, let them know you are a serious buyer, and Double Dip.  Tell them that you are super bummed that you missed out the property and you want to know what you need to do in order to get the next one.  Remind them that you will write the offer through them so that they will get both sides of the commission (we're done a few in this manner recently) and tell them that you are going to call them once a week until they give you a jump start on a property that's in the pipeline so that you can stifle your competition.

Mark Updegraff · Answer

Congrats on not getting outbid!  I hope you make a pretty penny

Mark Updegraff · Answer

PS - having a well connected Realtor / Broker helps too!  I've seen more back door BS in my short experience than I care to share!

Mark Updegraff · Answer

The picking is getting slim, the days on the market are short, and everyone and their uncle is trying to get in on the action...

Somehow I just locked a contract for a SFR for 35K in the same area ;-)

Stay quick on your toes, nothing will cost you more than over analyzing a deal when you should be faxing a contract!!!  (IMO anyway).

Rich Weese · Answer

Rajul- I reaaly feel it is a # game. I might go through 100 homes coming to foreclosure, and whittle it down to 10. I may get zero of them. People bid more than me, bank took it back, BK stopped the sale etc. The next 100, I might buy 4 or 5. I really feels it averages out. Now, it may be your price point is no longer realistic at point of purchase, or your rehab estimate is too high etc. Time will give you your answer. I own property in SA and I receive unsolicited letters to purchase my sfrs, so market may be tightening faster than you think. Rich

Abrahm Hernandez · Answer

hi  there  the best advise that i can give you is don't get a realtor look for open house in the area you disarie on sat and sun then go to the open house find out whos the realtor and if is a short sale and if it is and you like the property tell the realtor that you are instrested in the property and you would like him to be your realtor this is the only way you are ganna get to buy a house if you do this the agent would not reject  your offer becouse his will get double the commisions vs if you have an realtor he has to split it no matter the sales price

Bryan Hancock · Answer

Can you give us some insight into how you are marketing for deals?  We generally don't have much competition so this isn't an issue...that is b/c we are dealing with distressed sellers b/c our marketing is set up that way.

Getting outbid on Offers - Advice?

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