All Forum Posts by: William C.

 I hear you, and I updated OP to reflect "highest and best"  The point being there is no counter offers, no feeling them out.   You have one shot at this thing, its you against 2 other random BPers...What do you do?  Some will low ball at 90k hoping the other 2 come in at 85k.   Some will go at asking hoping the others are lowballing. etc. etc.  

 I'm not sure you read the entire post....there are 3 offers total.  If you are writing an embarrassing offer in a multiple offer situation I pity your agent.  

 But you don't really get the liberty of seeing what happens....they'll either accept your offer or another.  There is no re-do.

This is in terms of buy and hold, or BRRRR....But when submitting an offer on a property that is priced well, let say exactly what it's worth, $100k. You run all your numbers, conservatively, and at $100k, plus renovations, this property will cash flow your target number, let's call it $250/month after you refinance. We'll call it a B/C neighborhood so there is some long term appreciation possibilities.

Do you:

A: Bid 100k, thinking there is a chance you’ll be the only one at full asking and cash.

B: Bid $90k, because $10k less is $10k less and your here for a deal. You’ll cash flow an extra $50/month, but there’s a chance that you are outbid.

C. Bid $110k, because it’s only $10k, you’ll cash flow $50/less, but there’s a pretty good chance you’ll be the highest bidder.

D. None of the above, explain what you would do.

Ready, go. And why?

A few disclaimers. There are obviously other factors, but imagine this is similar to other properties in your portfolio and try to focus on price alone, and whether you want to get the best deal, or make sure you get the property. This is for a BRRRR scenario, so it's a long term hold and you'll get most of your cash back out, so the 10k you spend or save is financed money. Use your current market conditions, and if that will affect your answer compared to maybe another time let us know. Let's assume you are one of 3 offers.

I’m excited to hear the wide range of answers BP is bound to deliver!

 Im just outside of Philadelphia.  It's still too early to say prices are going "down". Stuff is just sitting longer....so sellers are getting greedy, and "some" buyers are not going as nuts as they were.  We'll continue to buy as long as we can cash flow.  Im just talking about very early signs of a changing tide.  Obviously no way to know where it does from here.  Maybe next month it picks right back up?  I

 I agree.  But my title had to be catchy and clickbaity for it to get this much attention, right?  I hope I have made it clear to this point, I don't see the market crashing, at least not to the degree of 07/  I just think we are peering over the edge at whatever is next, most likely a flat market, but I'm not taking on any long term new construction (subdivision takes a year) because I'm not confident in where the market will be 12 months from now.  History has told us we can't sustain a rising market forever, maybe history is no indication of the future, I just happen to be seeing signs of a changing tide.  Iv also admitted its not about being right, I could be dead wrong.  I'm happy to have gotten so many great perspectives from around other markets in the country.  Some are seeing the same, some are seeing the opposite.  Anyone who knows anything about real estate knows a blanket statement cannot tell the story for all markets, and I even made it a point to clarify in my title "at least in my market"....

 HUh? I said the 100-150k homes are sitting, and the 250-350k are selling. I do not consider that to be the high end, that would be the sweet spot for 80% of buyers in my area. I have not referred to the higher end a single time in this thread.  Not once.  Quotes work really well on this site to refer to the exact post where I may have contradicted myself. Please do.   Let me also be clear in saying a change is here, what happens next I clearly have no clue, again IN MY MARKET.   Higher end in my market would be 700-1m, and I have no pulse on that market, so therefor have not made any statements about its health or lack thereof.  But thanks for the input.

I'm honored to have elicited your first BP post! Just to be clear, I'm far from fearful, I'm just stating the facts as I see them in my market. Retail is still flying off the shelf, its the fixers and REO that is sitting for weeks on end, that would normally be gone in hours. We already wrote 2 offers and will be writing more. I'm curious what part of the country you are eating up the market??

 I think you are referring to J Paul Gettys quote "Buy when everyone is selling and sell when everyone is buying"   Thats exactly what I'm trying to do here

Does anyone here make investment decisions based on information they think indicates what everyone else is doing?  Dont know, dont care, but dont really understand either.

So other investors actions would be a basis for making investment decisions?  No.  We buy what fits our model.  

Second are you sure the data you are using can be used to predict the direction of the market?   I Its not a prediction if its already happened, is it?  

How many times have you been right on this type of call? I   Its not something I do on a monthly or yearly basis, but Iv been predicting this shift for about 12 months now.  I was not in the market in 2007.  So once I guess?

The market is different now, than it was 6 months ago, and than is was 12 months ago in my market.  I just wanted to hear whats happening in other markets. 

Buffets quote is "Be fearful when others are greedy, and greedy when others are fearful" That's also a quote Im trying to live by here.  I think sellers are getting greedy.  I think investors are getting greedy.  I think builders are getting greedy.  When my hairdresser wants to get in on the next flip we do because she heard the market it hot, and saw how easy it was on TV, its time to rethink things.  Iv called this a possible anomaly, maybe its my lucky day.... I'm simply giving the facts, as I see them, in my market. We will try to scoop every last one of these up. It's simply not reasonable, or feasible, and we've been sitting on the sidelines ready to jump in for about 6 months, and now all of the sudden 5,6,7 deals land in our lap, with more coming everyday?  I'm sure you'd be thinking twice if you were in my shoes.  Iv been doing this 10 years, expert, but Iv seen enough to know Iv never seen anything like this before. I am just trying to start a conversation, to see what other markets are experiencing. I am in no way trying to claim I am Nostradamus as previously implied by another poster, I'm just telling it like I see it. I'd be happy to wake up in 6-12 months with sold signs on every one of them and renters in the others, and I will be sure to dig up this old buried thread and tell everyone how wrong I was. It's not about being right, it's just ones mans opinion.   I appreciate the input.  Did you have any evidence to the contrary, if you read my OP I started this so people could disagree.  Saying I'm wrong because I'm wrong doesn't help anyone.  Are there articles, or facts, or anecdotes from your experiences in your market that are pointing in the opposite direction.  Or do you just take issue we me making some kind of bold prediction like I know it all?  Because I don't.  Part of me hopes I'm wrong , but mostly I hope I'm right,  but not to be right, because I like it better when I have 10 deals to chose from compared to zero.

 Did you the  OP, or any of my responses? I understand there is still pent up demand for the buyers who have been losing out to 10 other offers for the past 12 months. I am referring to distressed stuff.  Renovated properties, priced right, are selling in hours here as well.  "Priced right" seems to be the key phrase here.  Some agents are pricing as if we are in a rising market.  So a model match that sold last month is now listed for $5k more....And sellers are reading the (old) headlines that the market it hot and they are trying to get as much as they can, or at least they think if they ask for more, then maybe they'll get more.  Gotta leave some room to negotiate, right?