The past couple months, we haven’t put in too many offers on houses. In fact, we’re only averaging about three offers a month since March.
Luckily, we’ve gotten two houses in that time – The Deja Duplex and The Sunglasses House – but it could have just as easily been none, and we’d be sitting on our hands with nothing to do (and nothing coming up) right now.
There have been a couple reasons why we haven’t made too many offers recently:
* REOs are becoming increasingly competitive. With the $8000 tax credit and then another $14,000 credit for buyers of specific REO properties, there’s a lot of incentive for owner-occupants to be bidding full price and above on the available foreclosures. While these wouldn’t necessarily make good investments at the prices they’re being purchased for, they are great prices for someone looking to get into a first home and willing to put in some sweat equity;
* I’ve been very focused on building other aspects of the business. Between putting together more framework to scale our rehab business, to building this new website, to starting work on additional education content for other investors, I’ve been too busy to spend a lot of time chasing the few deals that remain out there.
All that said, we spent a good chunk of time this week looking at properties and putting in offers. Surprisingly, we found a number of houses we like, at reasonable prices, and seemingly without too much competition (meaning, there were no other offers at the time we submitted ours).
We currently have four offers in some state of negotiation, and with our 40% success rate with converting offers to contracts, we should likely get at least one or two of these houses.
I know there are a lot of investors who prefer to make dozens of low offers a week, and just play the numbers game, but I’m pretty picky about the houses I want us to work on; so I prefer my plan of making few offers, but working hard to get them accepted.
With our goal of 20-25 houses a year, we better get used to it!