How do you make yourself standout in a hot market?

Question

Hey, I’ve been putting offers on small multi families in the Kansas City area. Last time I went with the sales price and still lost out. I’ve read the book on rental property investing and Brandon gave some good tips. Should I start offering more than list if the numbers still work? Should I try to close as fast as possible? I’ve gotten a preapproval letter and my wife and I made a personal “about us” to send with our offers because I want to owner occupy. Obviously it’s a numbers game but we thought it might help make us stand out, it didn’t. I want to stay smart but it seems like people don’t really care if they make any money off these things. I don’t know how to compete with that. Thank you!

Jay Hinrichs · Answer

Or find an agent that will take their commish from you in monthly payments over time.so the seller nets more at the closing.when I sold real estate in tough times and these are tough for a different reason this is what I did to get the deals to go.I took my commission back in the form of a note from the buyer over 24 or 36 months.. so when other agents were not making deals because it was tough at that time early to mid 80s.. I was killing it.. because I could get my sellers more cash at close on owner finance deals.you cant have an owner finance deal at 10 or 20% down then rip out 6% for the broker especially with a 10% down sellers wont go for it.So it took me a few minutes to figure this out and implement that strategy and like I said went to town with it.. a little tough at first because your not getting that big check at closing but a year in next thing I know I have 6 to 7k a month in payments coming in and it just fed on itself .. So that's one strategy to think about.. of course 99% of agents would simply not do this and not make a deal because their broker may not allow it.. but I was a broker by 20 YO and worked for myself .. find someone like my much much younger self go getter who thinks out of the box..

Kim Tucker · Answer

So we have a duplex for sale in Kansas City - we had 5 offers, one was cash but couldn't pull together the cash in a timely manner, full price.One was a low ball financed offer.One was an owner occupied, pre-approved offer, that the buyers agent emailed and said they could up to full price if needed.One as also owner occupied pre-approved, but the email said they were offering $139 (over list), the contract said they were offering $137 (iver list) , and the contract numbers added up to $135. We went with the full price offer at list, because it was closing the fastest, was pre-approved and the contract was at least filled out correctly, unfortunatly the pre-approval was not worth the paper it was printed on.----------------------To get your offers acceptedGo in with your Highest and Best that works for you so you will know you gave it your best shot if you don't get it.Cash offers closing quickly wins out in this market, but financed offers work as well if they can move quickly or if there are no other offers.Have an intelligent offer where the contract is filled out correctly, numerous mistakes by your buyer's agent can get your offer tossed because if your agent can't fill out a contract properly, what else do they not know how to do.Make sure you really are pre-approved, on this duplex, was a verifiable rent on the side the buyer was going to rent out, while living on the other side needed to qualify, in this case, both sides were vacant. Does the seller need to own it for 90 days before financing will work, a must on FHA? Will the property need to be in perfect condition to qualify for VA financing?Make sure you buyers agent is on top of things. Asking the lender questions, making sure everything is taken care of so you don't make it to closing and find out that the lender at the last minute changed their minds. Having this happen to you on a couple of deals and then you get the reputation or your buyers agent gets the reputation that no one closes, then no one will take your offers.After working in 2 hot markets, the best advice is to lead with your highest and best that works for you, because someone else will probably be making a similar offer. You don't want to lose out on the deal and know in your head you could have offered $3,000 more and been ok. But don't offer more than will work for you or then you will not have a deal.

Michael Lee · Answer

Hello and welcome to this site Grayson! The simple answer is knowledge. Close in that line is being able to make a cash or quick closing. How quick you can can close matters to some people but your relationship and being able to solve their biggest problem might help you. Maybe you can help them not only close quicker and make them more money by financing the deal. Show them on a piece of paper how they can make more and spread out their tax liability by doing that over the life of the proposed life of the loan balance and they could help you both by doing that. Yes, you can offer over the list price if the numbers still work. Remember, if you are making your offer on a residential multifamily (1 to 4 units) you are competing against retail buyers.The more units, the better. Especially, if you are investing long term you'll make more money at the tail end. Good luck to you!

Robin Hunter · Answer

Alina Trigub · Answer

Account Closed. I just want to add: no matter what you do, don't overpay for a property to a point the numbers don't make sense. It'll kill the deal. Rather, start looking for alternative ways to source properties that are not commonly used by others in your area. So maybe do a marketing campaign or call the others directly. No matter what you do, read on it first, educate yourself prior to implementing it!Best!

Account Closed · Answer

Jay Hinrichs I never thought about that! That would certainly make the deal more appealing

Account Closed · Answer

Michael Lee thanks! Can you still do that if they’re using a listing agent?

Jay Hinrichs · Answer

@Kim Tucker my model worked in the 15 to 20% interest days and that If you were to survive as an agent you had to do owner financing.. now to be fair and balanced that was before most of these new investors were born :)we did what we had too to survive.. in these uber hot markets the only way I see owner contracts working is on stuff that cant be financed or off market no competition if your in competition with cash buyers etc.. pretty tough these days Aor market in PDX is great but its still not really multiple offer unless the listing agent is playing the list for 100k under what its worth and try to get into bidding wars..