Buyer Frenzy! Don't get burned.

[Steve Theobald]

I wanted to share this with people outside of Utah too, so I posted in the general forum. But it was mainly written for those of us in Utah.

https://www.biggerpockets.com/forums/311/topics/67...

Frenzy!

A newbie investor client and I went to a home yesterday that only had a two hour window for showings. There were about 30 other people there! It was a cramped madhouse. My client decided to make an offer at numbers that worked for him, and in an effort to not waste time, I texted the offer numbers to the agent. He said "You are not even in the top 10 offers!" This is just one anectodal piece of evidence as to why finding deals is hard right now. The competition is legion. And while the wholesalers seem to keep dropping properties in my inbox, they are still mostly overpriced -- with the wholesalers leaving only tiny scraps of meat on the bone. But who can blame them with all the willing buyers out there? So who are these people who keep "overpaying" (my opinion)? Are they investors from California who say something like "I can beat out all these Utahns and still have $400k left over from my sale in CA"? Yes. Are they newbies who are in a frenzy after their last Meetup for which they paid $X to join? Yes. Are they Buy and Hold investors who are looking at the 10-year horizon and like what they see and are willing to plop down some extra cash? Yes. I went through the last recession. I still have some PTSD from some of the deals I did then. I just caution everyone to be prudent at the purchase, since that is the only time you have full control. I am not predicting anyting here (the market looks solid), I am just recommending that you don't join the madness and keep your offers in the realm of reality. It is better to walk away than to do a deal just to stay busy. Honor your calculator! So what does a seasoned investor do? He or she MUST market and network and find their own deals. Drive for dollars. Knock on doors. They all work. But this takes time and it takes dollars. Be willing to spend both. And keep your full time job if you have one. The peace of mind from having consistent income is worth much more than you may think. Success out there!