Recommendations on How to Act Fast in Today's Market

Buying & Selling Real Estate
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Recommendations on How to Act Fast in Today's Market

Shawn S.
New to Real Estate · Melbourne, FL · Member since 2021 · 33 posts · 14 votes

Hello BP community!

I have noticed that listings on the MLS in my area are going super quick. A lot of times they are under contract by the following day. Therefore, I know it is important to be able to act fast. What are some ways that a newbie investor, such as myself, can be competitive against other buyer's by acting fast? What are the prerequisites that allow a buyer to act fast?

Thanks in advance!

- Shawn

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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
5y

You get your highest pre-approval and always use that, no matter what you are offering. You want sellers to know you can spend more on other properties and aren't at your max budget. You also want to have a one-sheet on you as an investor so they have some background. You want to also have a proof of funds to go with your pre-approval. You are going up against cash buyers most of the time so you need to show you have more money (if you do) and the finance is a personal investment choice. You have to research the owners and see how you can connect in your offer letter, outside of what everyone else does. Make sure you are on daily alerts in your target areas and for back on market properties. If you are new, I would NOT suggest ever making offers with the listing agent. You need your own buyer's agent or you will get a lemon because the listing agent always has a first duty to the seller.

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  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    5y

    Have your numbers and financing worked out ahead of time.  Have your banker pre-approve you.

    Know the type of property and the area you are looking at.

    Other than inspection, put no conditions on the offer, other than 2 day offer.

    Two objectives/options will happen with an MLS listing.  

    a.  Either the Agent will have to split with the buyer agent, the commission.  Action- look to see which realtors are selling the most properties that you want.  Personally stop by and contact them.  Tell them the type of properties you want, at what price and what type of condition.  You have to be able to make an offer in 1 to 2 days.  This gives them the full commission.  Win/Win.

    b. The agent will use the MLS to get as many potential buyers as possible and create a bidding war. Action- You probably don't want to be in a market or product type that you have to go into a bidding war.  Win/Lose.

    1Reply
  • Shawn S.
    OP
    New to Real Estate · Melbourne, FL · Member since 2021 · 33 posts · 14 votes
    5y

    @Henry Clark,

    Thank you for your response! These are great tips. I have some follow-up questions:

    1.) I have taken the steps to be pre-approved for a deal that did not end up working in my favor. The amount that I was pre-approved for was specific to that deal, and it is likely that a future prospective deal will be of higher value than my pre-approved amount. Do investors typically get pre-approved for their max value and then change the amount in the pre-approval letter to match their offer in a contract? Also, would multiple pre-approval attempts hurt my credit score?

    2.) How do I find out which realtors are selling the most properties that I am interested in?

    Thanks,

    - Shawn

    0Reply
  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    5y

    You get your highest pre-approval and always use that, no matter what you are offering. You want sellers to know you can spend more on other properties and aren't at your max budget. You also want to have a one-sheet on you as an investor so they have some background. You want to also have a proof of funds to go with your pre-approval. You are going up against cash buyers most of the time so you need to show you have more money (if you do) and the finance is a personal investment choice. You have to research the owners and see how you can connect in your offer letter, outside of what everyone else does. Make sure you are on daily alerts in your target areas and for back on market properties. If you are new, I would NOT suggest ever making offers with the listing agent. You need your own buyer's agent or you will get a lemon because the listing agent always has a first duty to the seller.

    [email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
    Zen and the Art of Real Estate Investing59 Reviews
    WebsiteView Page
    2Reply
  • Shawn S.
    OP
    New to Real Estate · Melbourne, FL · Member since 2021 · 33 posts · 14 votes
    5y

    @Jonathan Greene,

    Those are some good points that I can relate to and will keep in mind -- especially the one about tailoring your offer letter to the seller.

    In response to your suggestions, I have two follow-up questions:

    1.) Would the seller not try to raise the price if they see that you are approved for a larger amount than your offer?

    2.) Can you elaborate on what you mean by having a "one-sheet" on me? Are you referring to something similar to a resume?

    Thanks,

    - Shawn

    0Reply
  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    5y

    @Shawn S.  follow @Jonathan Greene notes.

    type in Melbourne, Fl or other.  Real estate for sale.  Sort by your price range.  Look at who has the most listings.

    As Jonathan mentioned, prepare a one sheet.  Who you are, price range, property type, neighborhoods.  You have to be prepared if they bring you properties to say yes or no within a day, subject to you doing a quick inspection of the property.

    Can "you" do a quick inspection?  Do you have a checklist?  Or do you have a home inspector on call, that can get to you quickly?  If not, then you probably don't want to go this route.  As mentioned above, buying a lemon.

    Can you do an analysis on a property in 2 to 3 hours, to see if it fits your objectives?

    You need a process, so you don't overlook something, since your making a fast decision.

    2Reply
  • Henry ClarkPro Member
    Developer · Member since 2020 · 4k+ posts · 4k+ votes
    5y

    What are you looking for?  What are your objectives?  What price range?  What rehab work can you bring to the table?  etc. etc.  Provide this and we can give you more specific suggestions. 

    The key recommendation is for you to do a deal, that your not suck with, has low risk of failure and $$ impact.  You have to start down the learning path without losing a lot.  This is your best learning tool.

    Join a local BP group so you can go over deals with people that are further up the learning curve.

    2Reply
  • Shawn S.
    OP
    New to Real Estate · Melbourne, FL · Member since 2021 · 33 posts · 14 votes
    5y

    Thanks, @Henry Clark for being patient and taking the time to give me this advice. I really like everything you are saying here. It is a reminder that I still have a lot of work to do, but is also encouraging and exciting because I love the process of learning new things. I am an engineer, so I am analytical and am a huge proponent for having systems and SOPs in place to streamline processes and create a reproducible product.

    This "one-sheet" concept is new to me, but it makes a lot of sense to have something like that so that your criteria is set and specific.

    Regarding deal analysis, I have been using J Scott's SFH Rental Analysis spreadsheet to practice analyzing deals. However, I am still learning how to hone in on accurate values for things like vacancy rate, CapEx, insurance, and other expenses, so I have yet to perfect my process.

    Again, these are all great tips and reminders. I have added a few things to my "Real Estate To-Do" list, so thanks or that!

    - Shawn

    1Reply
  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    5y

    @Shawn S.

    1.) Would the seller not try to raise the price if they see that you are approved for a larger amount than your offer?

    No, they would not and if they brought up that you could afford more and why don't you come up, you would respond, I can spend more on other houses that are worth more. This is what I think this one is worth.

    2.) Can you elaborate on what you mean by having a "one-sheet" on me? Are you referring to something similar to a resume?

    An investor one-sheet is a blurb about you, your company (or family or self), and what you are looking to do so a seller can get an overview that they are selling to a real person with goals and purpose not just a contract.

    [email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
    Zen and the Art of Real Estate Investing59 Reviews
    WebsiteView Page
    1Reply
  • Shawn S.
    OP
    New to Real Estate · Melbourne, FL · Member since 2021 · 33 posts · 14 votes
    5y

    @Jonathan Greene,

    Awesome stuff here! Both of these seem to have great potential in being effective strategies in appealing to the seller.

    Your response to my first question makes a lot of sense. Showing that you are able to afford your offer value, and potentially above, lets the seller know that you are serious.

    I am now a fan of the investor one-sheet and will add it to my toolbox. Now I just need to find some examples to go off of. Let me know if you have any!

    Thanks, Jonathan!

    - Shawn

    1Reply
  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    5y

    @Shawn S. think of your investor one-sheet like an elongated elevator pitch. Here is a good format:

    1. Who you are (personally, company, or family investing together)

    2. Why you want to invest

    3. Why you want to invest in this area

    Then follow that up with a personalized handwritten part on the sale about why you want to invest in their house.

    [email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don’t) by Gino Barbaro
    Zen and the Art of Real Estate Investing59 Reviews
    WebsiteView Page
    0Reply
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