How are you viewing properties?

[FLIP4ME]

Hi All,

I'm wondering how you view your prospective properties. Are you actually looking at all your prospects before putting in offers?  Some of my colleagues use an average repair cost per sqft and put in their offers based on that.  If you're doing that - what number are you using and where do you live?  If you are viewing the prospective properties, which agent are you using to see the property - Listing Agent or your team agent?  If you use the listing agent, do you tell them you're an investor when scheduling the appointment?

The reason I ask is that I know I'll be putting in offers on A LOT of properties and I will get a few under contract.  I don't want to use and abuse my team agent. 

Looking forward to your advice and experience!

[JaredfromIndiana]

After they put in their offer and it is accepted THEN do they go see the house?  I would hate to buy site unseen and end up with a caved in wall in the basement or something like that.  I would never make an offer on something I hadn't seen.  Could end up wasting my time and the listing agent's time.  It could also give me a bad name if I was doing this and backing out because of problems I didn't see because I didn't look at the house!

Use your own agent always.  They will have YOUR best interest in mind.  If your getting a LOT under contract you won't be using or abusing your agent, you'll be making him/her happy. 

[jfpen]

Hi All,

I'm wondering how you view your prospective properties. Are you actually looking at all your prospects before putting in offers?  Some of my colleagues use an average repair cost per sqft and put in their offers based on that.  If you're doing that - what number are you using and where do you live?  If you are viewing the prospective properties, which agent are you using to see the property - Listing Agent or your team agent?  If you use the listing agent, do you tell them you're an investor when scheduling the appointment?

The reason I ask is that I know I'll be putting in offers on A LOT of properties and I will get a few under contract.  I don't want to use and abuse my team agent. 

Looking forward to your advice and experience!

I'm a newbie but have been actively going out to see properties and putting in offers.  My agent has been great. She is a state certified appraiser as well as an investor herself. I gave her my criteria for properties and she has brought some very good prospects to me. I've put in viable offers on all that she's shown me. One time I lost a property to an all cash buyer even though my offer was considerably higher. My offer on another property was declined by an owner who lives out of the country and thinks the property is worth more than what it was in 2005. At least 40 buyers have done a walk through and I am still the only offer on that one. We've moved on and are in the process of working out an offer to bank on a short sale for another property that has some challenging circumstances around it. She knows I'm serious and am not wasting her time.
I would just have a conversation with your agent and let them know that you'll be making many offers. See what they think. If they seem apprehensive or lazy,  find someone who WANTS to work with you.  You may be able to work out a win-win arrangement. Because I do travel a bit for work, my agent has pre-signed checks and offer forms. Paperwork correspondence is done via email with .pdf files.
I don't think it would hurt to tell the listing agent that you are an investor. They'll figure it out soon enough if you have made an offer!

JP

[j1dias]

I would never submit an offer to a property that I haven't seen. At this point I am submitting only all cash with no contingencies offers. So I need to see the property before I submit the offer. What I am finding is that most of the properties that I am seeing need a lot of cosmetic repairs and kitchen and bath upgrades. A typical estimate is around $17k-$18k for a 3bed/2bath house (1,100-1,500 sqf). Some need more work. But very few need less.

I am not too confident on my estimates as I believe I am being excessively conservative. As I talk with other folks in my local REIA it seems that they typically spend between 5k and 10k in repairs for similar properties. I am trying to refine my cost estimate spreadsheet with frequent trips to Home Depot and Lowes. I also ordered the Marshall and Swift 2008 cost of repairs guide and the National Repair & Remodeling Estimator (with CD). I hope they will help me adjust my spreadsheet...

I hope this helps.

[propertymanager]

The reason I ask is that I know I'll be putting in offers on A LOT of properties and I will get a few under contract.  I don't want to use and abuse my team agent.

Why would you put in a LOT of offers and only get a few under contract?  If that's the case, you're doing something wrong.  The idea is to find desperate sellers.  If you do that, you'll put in very few offers before getting a deal.

Good Luck,

Mike 

[matt-gerchow-real-estate]

Now that Mike has belittled you, here's the answer you are looking for.

You view your properties after the contracts are accepted.

This is how HomeVestors does it. This is how are businesses do it.

This is how you do business if you plan on several transactions every month.

Have solid inspection clauses that allow you out for whatever reason.  There are several ways to do this.

Search the forums for Escape Clauses for a more detailed explanation.

Matt

[tatertot]

Your own agent is the one who shows you the properties.

Shotgunning offers is a waste of everyone's time. Save your energy for propeties that have some indication that the seller is motivated.

Average cost of repairs? Ha-ha-ha. Anywhere from $50 (to change the locks), to $100,000 for a tear down and rebuild.

I suggest that you go and look. It isn't just the cost of repairs. It is the neighborhood. How much traffic? What is next door? Crime rate?

Be aware of things about the house that you can not change. There is nothing you can do if it is next door to a pig farm, under a high tension line, at the end of the runway of an international airport.

Things you can't change can have a very serious effect on the value of the house and will affect how easy it is to re-sell or rent. Those things should be taken into consideration before making an offer.

[j1dias]

And after you have seeing a number of properties you may start to realize that some agents are very active in the area/price range you are looking for. You may need to deal with them on different occasions. If you keep sending offers for every single property that comes your way, you may end up being marked as not a serious investors that likes to waste everybody's time. Not a good thing if you want to continue to do business with them.

My suggestion is to go see the property, find the ones that you like, run your numbers, and make offers for the ones you feel you have a fighting chance. No point in making offers left and right.

Good luck!

[propertymanager]

Now that Mike has belittled you, here's the answer you are looking for.

Matt,

I certainly haven't belittled anyone, but I do question your understanding of this business.  First, you didn't have a clue about the definition of "cap rate".  Then, you had some ridiculous claim in your signature that a person could live the life of a multi-millionaire in 90 days, and now it is apparent that you're having difficulty even reading.

As the others have said, placing a bunch of offers on properties you've never seen and hoping one will be accepted SCREAMS NEWBIE!  This is just guru nonsense right out of some overpriced course by some "guru" that has probably never done a deal.

Do you have any actual experience in real estate, or are you just into marketing?  Since your knowledge seems to be lacking, I'm betting on the latter!

Mike

[matt-gerchow-real-estate]

Mike, I'd be happy to match you tax returns and passport stamps for the past 5 years.

You sound like an angry old man...and I see that now you have left the forum.  Probably the best thing to happen to REIClub in 10 years.

Doing deals, making money and teaching others in a way that others can digest, not angering all those that you "assist" in a rough fashion...that just angers people.