All Forum Posts by: Luna D.

Luna,

This sounds like you are buying a home as your primary residence. Or is this your first investment rental property?  It's hard to answer without knowing this.

 If there are places still on the market, then talk to your agent and say houses are selling on average within X days.  These houses have been on the market longer and compared to others, they seem overpriced.  I want to put in an offer at $X which is closer to the comparable sales in the area.

Hi Luna, In my opinion as a broker and investor, most agents don't know how to find the right deals. You're wasting time doing low-ball offers that don't get you anywhere and are frustrating everyone, including potentially good sellers. Instead, find a team that has experience in finding off-market deals. You need to connect with a real estate consultant, wholesaler, or a disposition company that understands your investment strategy. Traditional agents rely heavily on MLS listings, which is why you're not finding the numbers you're looking for.

I've been doing this for 20 years, and trust me, it's worth spending more time finding the right specialist rather than focusing solely on properties. The right expert will save you time on offers and property searches by understanding your needs and delivering better opportunities. Good luck!

Jorge

Let me take off my lender hat and put on my investor hat. My wife and I personally have 3 listings and 1 pending sale right now. Our phones ring off the hook with investors lowballing us, reading off of scripts, and those that think we're stupid by trying to slide a sub-to or assignable contract by us. We also get calls from good, professional agents that are almost apologetic about their offer where a newbie listed to a podcast produced by some joker that doesn't really know what they are doing themselves. Remember, these agents will likely have to deal with us again at some point and they are reluctant to put forth riduculous offers that will make them look like fools. You've said you were new and I see some advice you've been given to do it yourself and skip the agent. I can tell you that after 33 years of doing this, if a new investor or agent tries to negotiate it alone against a good pro that knows what they're doing, they are going to get fleeced. Pros know what boxes to check and the tricks of the trade to get the best deal for themselves or their client. They also know how to keep the seller/listing agent in the game by not putting idiotic offers in front of them. It sounds like you've got a good agent that you're working with. If someone comes at us with a stupid offer, it will have a very negative impact on how the seller or listing agent sees you as a viable buyer. If, however, you're coming in with a very thoughtful and transparent offer showing that you and your agent are a pro who have a true reason for the offer, the seller and listing agent are much more likely to work with you. Pay no attention to the keyboard warriors that took a course from a guru that's really not been around the block. Conduct yourself as a pro and surround yourself by good, truly knowledgeable pros. You'll catch more flies with reasonable, thoughtful offers than you will with the vinegar of stupid, super-low-ball, random offers. If they are truly overpriced. It only takes one buyer for them to sell the property and just because numbers don't work for you, it doesn't mean a family of four won't come along. If you're coming in low, be sure you have comps and solid reasoning for the offer if you really want them to stay in the game and not tune you out. 

Congrats on getting started.

#1.  I think you need to analyze your own properties, not send them to an agent to analyze.  You know your parameters of what works and what doesn't for you.  I can give you an idea of what I think works, but that is what works for my bias, maybe not yours.   So I would only send properties to the agent that you have run numbers on and maybe have driven by, so that you know you like the neighborhood.

#2.  Offers need to make sense to work.  In many areas of Dallas I see the very worst properties that need a lot of work go for about 10% off, but that is not the norm.  Just had an investor send me one in East Dallas/Garland/Mesquite area that was super beat up and went for $15,000 over asking.  Almost everything we bid on goes at over asking price.  Last one he won was asking $250K and went for $280,000 so $30,000 offer.   I'm not saying that's what you have to bid, but you want to submit winning bids, not just random bids.  Also almost everything we bid on sells for cash and no option period.  So bid accordingly.  If you're trying to use financing or hard money, then you probably have to bid higher and more aggressively than a cash bidder to win.

#3.  Sometimes I look at try to guess at what the owner owes.  So if they owe $250,000 and you want to bid $200,000 chances are pretty good that is not going to work.  Seller would need to bring $65-$70,000 to closing to help you buy the house.  I've seen it happen, but pretty rare and so rare you shouldn't waste time and effort on those homes.

#4.  If you're not winning bids, figure out how you can bid more aggressively.  Can you borrow money from friends and family to be a cash bidder?  Can you bid with no option period.  Can you bid with massive earnest money....$10 or $20,000 vs $1000?  Can you close super quick...like 1-2 weeks.  Can you rehab cheaper, better, faster to make your numbers better.  Focus on improving all those vs just trying to win a low bid.

Dallas area is tough right now.  You have to bid aggressive and also realize a lot of the rehabbers are doing it themselves and after hours, not hiring expensive GC.   Many willing to make $5000 on a deal and not $50,000...so tighten your numbers as much as you can.  Good luck and best wishes.

 You should run the numbers to see if they work for you, but you also need to be realistic about the price.  Not all houses will cash flow or have numbers that work.  If you are looking in an area where the numbers don't work, then perhaps wait until later in the year when the market is slower.  You need to do the leg work and when you find a place where the numbers look like they will work, send it to your agent. 

Also have a talk with your agent to see what houses are selling for.  With some of the ones you wanted to put in a low ball offer, what did they end up selling for and how long did they take to sell?

 Are your expectations reasonable or unreasonable for the market? You say you want "good cash flow"...but your location says you are in Dallas. 

I'm not sure if you're bidding on single units or multiunits, but Dallas cap rates are 4.5% for A class up to 5% for C class. The market doesn't care what you desire for cash flow....it only yields the same cash flow that every other property will have. 

 You are abusing the agent if you are sending property to the agent to analyze. That’s not the agent’s job. You set the parameters, the agent finds properties that might work, you run the numbers.

You know what works for you. The agent doesn’t.

Well, just to start, you are the one buying it not them.  Maybe have a convo over coffee about how you analyze and that they are double working if you both are doing the same thing but getting opposite results.  I am in the Tampa Florida area and have a lot of OOS buyers.  So, they rely on my expertise to help them with the process.  Although, my strategy may work for me, it obviously isn't on the same page as you.  There are a lot of variables to making a low offer.  I think the conversation should be, " I understand your view but in my strategy I would have to get it at this price, are you willing to make these offers for me? I would love to work together but we have to be on the same page. Take a couple of days to look over my strategy and let me know if you feel like this is a good relationship that will benefit both of us.  You won't be upset if they don't feel like they aren't a good fit together"  No harm done and it just sets the expectations for you both and you know you did everything you could to get your point across.