Quick Question On Making Multiple Offers
Hi Guys I suspect thsi will be a quick answer so I appreciate it in advance. I have heard that you should be making like 10-15 offers per day on properties. Well what the heck happens if by chance 4 of those oers get accepted and you can't follow through on all of them? what happens? do you lose your earnest money or do you just work a subject to clause into the oer so that you can get out if you have to?
Thanks
Joe
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Joe:
Nice to meet you. If you have 4 offers accepted at the same time, you have hit the jackpot!
What you do is "Wholesale" 3 of them and "Retail" the other one!
The key to being successful in Real Estate is eductating yourself. I would suggest you buy Ron Legrands Cash Flow module on this site and read some articles on "Wholesaling".
Best Riches,
Jeffrey Adam
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I guess what I meant was if they are all accepted and I can't get rid of some of them am I stuck with them or can I back out of them?
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No offense but there isn't a real estate investor alive that would consider this a problem.
Your deals should be negotiated so that they have a healthy profit in each one. Otherwise you may be offering too much.
If your deals have enough profit in them YOU WILL be able to wholesale them to another investor for a few thousand profit.
Then you focus on the one or two you kept for yourself.
But if the worst happens and you cant wholesale them, you should have left yourself a way out when you wrote the contract.
Good Luck,
N.
No offense taken, maybe I should clarify my position a litle bit more. I am right at the beginning of getting into rehabbing. i have enough to buy and rehab one house. I have heard that you should be making multiple ofers in case some of them fall through. What I don't want to happen is for me to make say 10 offers, gt one of them and then have another one accepted and I am out of cash. I am trying to build a wholesalers list but is slow going. I just dont' want to piss my realtor off, but also I don't want to let good deals get away. Until I have more cash built up should I only be offering on one at at time?
Joe
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its all in the way you write your offer. you can have contingencies that will get you out of the deal but you have to write them in there and the seller has to agree to them. the best way to get a seller to agree to a contigency that alows you to back out is make it as short of time as possible. that way the seller isnt passing up deals waiting for you to make up your mind. for example, I just purchased a home but I said I wanted 5 days to inspect the house and could back out if it was not to my satisfaction. after 5 days the contigency would be removed. they agreed to that. you can have a contigency on anything, just as long as the seller agrees.
Ah I understand. Now what if it is one that is sold "as is" are there any tricks that you use as escape clauses in those cases?
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Set up staggered closings!!!!!!!!!!!
lori
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no, not that I know of. even if a property is sold "as is" you can still write an offer that lets you check it out for a certain period of time by you or an inspector to make sure its acceptable to you. In my state you always have a chance to back out if an inspector checks it out and there is something really wrong with the property and the seller refuses to fix it, but in your case your just trying to buy some time to figure out which house you really want in case you get multiple accepted offers. so you need to put a contigency that says you want x amount of days to inspect the house and it has to be to YOUR satisfaction. YOUR satisfaction is technically open to anything, "the paint is a funny color and that is unaaceptable" can get you out of that contigency if you wanted. If they agree to that then you should be ok. and to reply what lori says about setting up staggered closings, all that will do is make it so you close on multiple houses at different times, which I believe you said you are not interested in purchasing multiple houses. you just want to make offers on multple houses and choose the best one..correct? If I were you i ould find a really good agent that specializes in investment properties. They should know a lot of ways to write an offer, but you must get somebody who understans what you are trying to do and is all for it. plus when you buy you are not paying his commission so it wont cost you anything to have them involved. good luck.[ Edited by dlitedan on Date 05/09/2004 ]
Great! thanks for all of the advice! that helps quite a bit.
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I don't think anyone has answered your question with the care it needs. Making 10-15 offers per day is quite a few and if you get 4 of them accepted but can't close that is a huge problem. I have never made an offer on more than one property at a time because reputation is everything. I've gotten where I am at so far because of networking mostly. If I sell a homeowner on a solution and can't deliver that is worse than the alternative.
What you can do is go and look at a TON of homes. You can start to learn what things are worth and learn the game. My first 6 months of getting into REI I went to nearly every single open house. I met probably 80% of the realtors in my town. I look quickly at the property and then go talk to the agent and learn about why the home is on the market and how long it has been. Why hasn't it sold yet and what could be done to make this home ideal. You can learn learn learn.
Assuming you are beyond this point you are ready to make some offers. It's all about numbers here. If you look at 100 homes you can make an offer on 10, get 3 accepted, and close on 1. If you are making offers on 10-15 properties per day you should be looking at 100-150 properties per day! It takes about 5 minutes to run the numbers on a property and pull the info you need. If it wins the first round you keep doing research.
With your experience of your market you should know what each home is worth within a vague range. That is all you really need to begin.
Once you start finding the deals then work them best you can to get them accepted.
I guess a strategy is to shoot offers out all over the place but I prefer to put together deals that have a decent chance of getting accepted before I write anything up.
Everyone has a style...develop yours and go for the gold! GOOD LUCK