Never Confuse These Two Things About Real Estate Deals

by | Feb 1, 2018 | Blog

When it comes to investing in real estate, there are just some deals you are not going to be able to acquire. Best to know this from the start and get over it quickly. Someone else is going to get the deal instead of you, either because they were focused on solving the seller’s problem, beat you to getting it under contract, or more often than not, offered more money than you. Whatever the case may be, you didn’t get it. Also, it certainly won’t be the last time either, unless of course, you completely stop making offers.

Hey, it happens to everyone. I hear investors all the time say they lost a deal to another investor who was willing to pay more for it. And if that’s why you didn’t get the deal, stop thinking you “lost” it. You didn’t lose it. If you did your due diligence, and offered the right purchase price (i.e., one where you can make the profit you want), get over it and move on to the next deal.

Are you questioning whether you offered the correct purchase price? If so, that is totally normal, and you need to ask yourself the following questions:

  • Did I determine the correct ARV?
  • Did I do enough due diligence to determine the complete scope of work?
  • Did I offer the right price based on these factors along with the profit I wanted to make?

If you answered “YES” to all of these, then you should feel good about your offering price, and not confuse losing a deal with someone else making a mistake that’s going to cost them money. However, if you low-balled the seller, then we are talking about a completely different situation. In this market, there’s no room for being too greedy. Whatever the case, don’t beat yourself up over it.

Most of what we are seeing right now is investors paying too much just to get a deal. Why are they doing this? They are very new and don’t have enough experience yet. Emotions are taking over their decision making, especially when pressured from a wholesaler to buy the deal before someone else does.

If this sounds like you, don’t get sucked in. No matter what your deal flow looks like, it’s a dynamic market. This means that deals are happening all the time. Real estate deals happen every day and that’s not going to change. Be patient and find the one that works for you.

You have a Real Estate deal in Texas and looking for someone to help you with hard money loans? We can help! We have a three-time award-winning hard money lender, with offices in North, Central Texas, and South Texas

Set An Offer Goal Every Month

by | Feb 15, 2017 | Blog

There is an old saying in real estate investing circles, “If you’re not making offers, you are not going to get deals.” It sounds so simple, but you would be surprised how many investors I speak with on a regular basis who say they cannot find deals.

My response is usually, “How many offers did you make this month?” Their reply is none, one, or some very small number. The bottom line is it’s a numbers game, and you will need to make many offers to get a deal under contract.

How many offers does it take to get a deal under contract? It’s a difficult question to answer. You might make one offer and get a deal. That would be great if it happens, but it can also make you jaded into thinking it’s that easy.

A Story to Illustrate My Point 

When I first started utilizing direct mail campaigns many years ago, I got very lucky and got two very good deals under contract that I was able to wholesale quickly and make money. Because of this success, I stopped talking to wholesalers and didn’t make any offers on MLS deals. I also failed to follow through on some of the other direct mail leads I received because they didn’t seem to be as good as the first two deals I wholesaled.

So guess what happened? I had no deals working, and my phone wasn’t ringing like it did the first few weeks after I launched my direct-mail campaign. This was a big mistake and set me back a couple of months before I got my next deal. Sometimes you have to learn things the hard way, and I was certainly no exception to this.

What was I thinking? Because they came so easily, I falsely made the assumption that my phone would keep ringing and I would get more deals just like the first two. I also made the rookie mistake of thinking if I make too many offers, how would I handle all of the volumes if they were all accepted? It’s crazy what you think might happen when you are just getting started. When neither of these things happened, I realized that I had to start making offers and do it consistently. These offers now included REOs listed on the MLS as well as wholesale deals. I also realized that a direct-mail campaign needs to function as a campaign and not as an isolated event.

My Advice 

My advice as a hard money lender is to make as many offers as you can until you start seeing results. These can be offers on MLS deals, offers to wholesalers, or offers directly with the owners of record of a property. Just as you would set a goal for the number of deals you are going to do, or the amount of cash flow you want to make, or the profit amount you are targeting, you need a goal for the number of offers you are going to make each month, because you will not reach your deal goal without an offered goal.