If you flip houses for a living then you know that real estate never sleeps. Often times your phone will ring when you least expect it, and suddenly there is a deal on the table. Smart decisions need to be made quickly when this occurs, or else you may miss out on a valuable money-making opportunity. To excel in the house flipping business, an investor needs to be able to analyze deals quickly and submit offers that get accepted.
Take for example what recently happened to my acquisition manager Bill Roberts and myself over Labor Day weekend. Bill and I were just hanging out, taking it easy and unwinding from what had been an eventful week. We were just about ready to "shut it down" for the weekend when Bill's phone rang.
It was a real estate agent calling on behalf of a local asset manager, about a deal that we had previously passed on. Low and behold the asset manager was now ready to negotiate. As mentioned above, real estate never sleeps!
Analyzing the Deal & Submitting the Offer
Submitting an offer that gets accepted is a bit of an art. There are many moving pieces and a plethora of information that goes into crafting an offer that appeals to the seller, but also leaves room for you as the investor to earn a profit once you sell the home after renovation. Be sure to check out our 3 part series on How to Craft Compelling Offers, to learn the basic principles.
While on the phone Bill explained to the agent what numbers worked for us, but unfortunately our numbers did not match what the seller had in mind. Once again we passed on the deal, because the numbers did not fit into the 70% Rule.
On occasion we will break the 70% Rule, and on certain deals we have made more than $50,000 doing so. However this was not such a deal, so we had to tell the agent that we were just not interested in increasing our offer to the amount they desired.
Well, a matter of hours later we get a call back from the agent, who informed us that the seller was interested in accepting our offer-granted of course we increase our offer by just a tiny amount. The modest increase to our offer still left plenty of room to make a profit so we moved forward and secured the deal.
We even caught Bill live on video as he submitted the offer to the real estate agent for $118,000.
I believe one of the keys to our success in this negotiation was that the call came in towards the end of the month. It was August 30th and when dealing with asset managers, it's important to remember that they are often motivated to sell before the 1st of each month.
Dealing with a motivated seller certainly helps. Yet a lot went into this dealÂ behind the scenes, which undoubtedly helped us to secure this deal at a price that worked for us.
How To Analyze Deals Quickly & Submit Offers that Get Accepted
Bill and I are able to analyze deals and quickly submit offers that get accepted because we have had a lot of practice doing so. If you are new to house flipping and you get a call like the one described above, you may find yourself scrambling, unsure of what to do next.
In the below House Flipping School members video, Bill and I dive into the details of how we were able to analyze this deal and submit a competitive offer within a matter of minutes.
In this video we discuss:
- How to diminish your fear when submitting an offer by including one critically important clause
- Data collection and why you need to record data when you visit a property for the 1st time
- How to get out of a deal without losing money, after you've submitted your offer
As always this coming week has a lot of potential. Currently we have numerous deals on the table which we'll be working on, plus I expect us to find some additional new deals to add to the mix.
How is your personal house flipping business progressing? Let us know and keep me posted on how I can help you by starting a new thread in our forum.
Take care and see you at the top,