Focusing on a particular property?

Every so often an investor will explain to me the specifics of a property they are trying to buy.  After giving me the details and explaining the twenty different ways they have tried to make the deal work, they are hoping I have the secret idea #21 that will finally get the deal done.  I am sure my advice is usually very disappointing, but I usually tell them to move-on to another deal.

You can not get ‘fixated’ on a specific house. This is a numbers game!  Do you research, negotiate and try to buy the property for your price/terms.  If you cannot make the deal work, add it to your follow up list and maybe the Seller’s motivation will eventually change but that is something you are not in control of.

In April, I wrote close to 75 offers in a specific market we have been trying to get properties on.  We looked at every one, prepared our numbers on every one and presented an offer with the willingness to purchase it.  We missed on 95% of these, and some of them we really liked, but we are in business for the 5% of Seller’s who are willing to say yes.

Along the way another important thing will happen, if you are constantly analyzing 10+ deals at a time you will have a mindset shift.  You realize the market is big and there is enough to go around.

 

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3 Responses to “ Focusing on a particular property? ”

  1. Steve,

    I could not agree more. This is one of the things are usually sort of brushed over quickly when talking about how great real estate investing is. It really does take getting a lot of leads to find the true deals.

    This is a big factor in people thinking that certain marketing strategies don’t work. They send out 50 letters and then complain that they didn’t get a deal. It really does take persistent action to make it work. Most people don’t want to sell their house. You want the small majority that ‘need’ to sell their house and have the ability to sell it for a heavily discounted price.

    Thanks for the great post. I’m glad you mentioned putting in the 75 offers and only buying a small percentage. You put in a lot of work, but I’m sure you got some great deals. You didn’t settle for a dud or give up.

    Danny

  2. Always good advice Steve. One of the most important things for me to do in my business is to say “no” as quickly as possible to a deal if it doesn’t look like it’s going to fit in our criteria.

    I find if I spend to much time trying to make a deal our of a “no deal” then the good deals get away.

    It is definitely an art more so than a science but I get so many calls and emails letting me know about deals I need to quickly short list them the best I can so I can focus on the highest probabilities.

    Our ratio of offers to accepted to close are pretty high. We are typically in the 40% range of offers to purchases. Maybe I just suck at analyzing deals and think everything’s a great deal (just thought of that…oops)!

    Seriously though we should be putting more offers out but it’s a fine line on shotgunning offers and then not being able to close if to many are accepted and not filling the pipeline.

    Anyways looks like your doing great Steve. Definitely motivating!

  3. The downfall to real estate is you never know how liquid your asset will be. This is because the market greatly affects and is greatly affected by the overall economy. If the economy is in a slump and lenders are not approving loans, it may be harder to sell a house than say during the housing boom in and around 2006.

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