5 Offers in 48 Hours | Update on my latest flip
Today is an exciting day in my personal house flipping business. After a 30 day rehab, I listed this Massachusetts property on Saturday and since then I have received 5 offers. Seeing all your hard work come to fruition is always a really nice feeling.
Yet as with any successful and profitable house flip, this project never would have happened had I not followed a specific formula.
One of the most important components to flipping houses successfully is being able to craft a killer offer that gets accepted. This is especially true in competitive real estate markets, like my primary real estate market here in Massachusetts. If you want to be successful in the long run, then you need to learn the intricacies and small details that go into making an offer the seller cannot refuse.
If you as the investor are struggling to get into good deals, then it can pay to take a close look at exactly how you are structuring your offers. There could be one small improvement you could make to your offer, such as waving inspections or placing a cash offer, that will make a world of a difference.
We'll talk more specifically about how you can craft compelling offers that get accepted later on in this post. For now lets dive into my latest house flip in Carver, Massachusetts.
How I Acquired this Property
Just over one month ago I submitted what I refer to as a win-win offer on the house pictured above. As is evident in the photo this house needed a fair amount of renovation work.
Yet this property had a lot of potential, and after running my numbers, I knew for sure that this flip could earn me a fair amount of money. Yet as with most properties in the Massachusetts area, other investors were also chomping at the bit to scoop up this deal.
I was able to stay one step ahead of these other investors, because I had developed a close working relationship with a reliable and trustworthy wholesaler. I enjoy working with wholesalers, granted they know what they are doing. A good wholesaler is out there in the field, searching for deals he or she knows will appeal to house flippers like me.
Using Wholesalers to Find Houses to Flip
Recently we started working with wholesalers who are actively looking for buyers like me to sell their properties to. To be even more specific, we are working with motivated and reliable wholesalers who are new to the game. These wholesalers do not have much experience which is OK, because I am willing to show them the ropes.
Once these wholesalers understand exactly what goes into a good deal, they will go out and find those good deals on their own. If all goes well, I will be able to acquire the properties they find on a first come, first look basis. It is a great way of working together, and I think it really is a win-win for all involved.
It all falls back upon building a strong and reliable house flipping team.
So for this particular property in Carver, MA we met with a wholesaler we were already working with, as well as the sellers of the property. Usually when we meet with the sellers of a property they end up choosing to do business with us, because we focus on making a positive emotional connection with the sellers.
My belief has always been that people do business with people they know, like and trust. For this property I wanted to create a win-win situation for the wholesaler, the sellers and of course myself.
Crunching the Numbers
When I first ran the numbers on this property I came up with an after repair value of $210,000. I estimated that the house needed around $40,000 worth of repairs, which meant my maximum allowed offer would be around $90,000.
Everything came together perfectly (which doesn't always happen!), and I was able to get this property under contract for $85,000.
I purchased this property back in April, and since then I am happy to report that the estimated after repair value has increased. Right now based on my formula, I believe I can sell this house for $19,000 more than I initially thought.
If all goes according to plan I'll have this house sold very soon. As mentioned above I have received 5 offers over the past 48 hours. This sort of activity does not always happen, so I am going to try to enjoy this moment as much as I can.
Yet none of this would ever have happened had I not understood the intricacies of crafting an offer that works for not just me, but for all parties involved.
How to Structure a Win-Win Offer
Some people have the mindset that they will low ball their initial offer on a property and negotiate their way up from there. To put it bluntly, this is a horrendous strategy.
My goal is to always craft an offer that is a win-win for all involved. I recommend that you consider doing the same for your properties.
Yet there is a strategy and certain know-how that goes into structuring such an offer. Remember that the best deals are sometimes only available for a couple hours before they get scooped up by other investors.
With all this competition, how can you submit an offer that not only gets accepted, but leaves everyone involved in the deal feeling happy and content?
How to Craft Compelling Offers | a 3 part series
How to Craft Compelling Offers is a 3 part video series that wholesaling specialist John Fossetti and I created to show you the strategies behind crafting an offer that gets accepted.
I used these exact strategies to help me acquire the Massachusetts house flip described above, and I will be using these strategies again later this week when I submit an offer on a house not too far down the road from my home office.
John and I have created 3 videos specifically on how to make compelling offers.
In the first video John and I discuss 5 specific strategies that will help get your first offer accepted. We use real life examples whenever possible, because I think real life examples are the best and only real way to learn the intricacies of this business.
In video number 2 I tell John exactly what my determining factors are for how I submit an offer. If you can identify these key determining factors in your deals, you can use them to help submit an offer that gets accepted, over the offers of other investors.
And in video number 3 we discuss "doing your due diligence" and why this is critically important to submitting a successful offer. You need to do your research and due diligence in every aspect of the house flipping business, but this rings especially true during the offer stage.
If you are already a House Flipping School member, simply login and click on the Round Table Discussions bubble to view the 3 part series.
If you are not yet part of the House Flipping School community, then first signup by visiting this page. You'll instantly receive a username and password and be able to access everything that our new HFS community has to offer.
Stay tuned for another update on the Carver, Massachusetts house flip coming Thursday of this week. I hope to have some more good news to share with you soon!
Take care and see you at the top,
Mike
