How to Buy Real Estate Deals Faster

Hey!

Struggling to take down deals? In this newsletter, I’m covering how to be more competitive in your acquisitions and share a couple recent deals I’m working on as examples.

Announcements

A quick note that I’m excited for this to be the first of many newsletters in Beehiiv, our new newsletter platform. Here’s to giving you a much better experience in your inbox each week!

Our members only Flippers Anonymous meetup is coming up FAST on June 14th and 15th. Register ASAP if you’re not yet — the link is in the private Facebook group and Kajabi.

If you’re not a member and want to join us for some in-person fun in Austin, you still got time. I told my team to waive the $997 signup fee for now so if you’re looking to be around other experienced investors like myself, try it out.

Inside the Trenches

I recently tied up two single family houses next door to each other about 10 days ago.

Both of these houses were on the MLS and both had multiple investors competing for the properties.

Both properties also need A LOT of work, literally a down to the studs remodel as well as needing all new infrastructure (electrical, plumbing, HVAC, etc).

Let's just say that these are not for the faint of heart. Yet despite all of that, there were still many investors competing for the properties.

When I find myself in these circumstances, I realize how important it is to do the following things whenever possible prior to putting an offer on a property:

1. Get to the property quickly (you or someone on your team).
   

2. Inspect the property fully.

   This is WHY it's so important to lean into learning rehab and construction, the more you or your team leans into this, the sharper your pencil is on deal analysis and the faster you can confidently plan out a budget.
   

3. Know your comps BEFORE going to the property.

   This way you can quickly confirm whether or not the subject property can meet or exceed the comps for ARV (or rental comps), depending on your strategy.

   If the property is a 2 bed 1 bath house and comps say that numbers only work if its a 2 bed 2 bath house, then when you (or your team) walks the property, you can decide whether converting to a 2/2 is possible or not.
   

4. BONUS: What is the sellers motivation?

   Finding this out is a SUPER BONUS. Sometimes the listing agent is forthcoming with this info or sometimes the seller is at the house (rare) and you can ask them yourself.

   We all think that a higher price is the most important number in an offer, when in fact it may not be. Perhaps closing fast with no contingencies and a guaranteed closing date is far more important than the price you are buying it for...

   Or sometimes a quick close is NOT ideal for the seller, and a longer close is preferred...sometimes we have no clue what they want. Which is why it’s a bonus.

So what did we do with these properties and what happened so far?? It didn't go as planned...

But thats why we add a few special clauses to our contracts...

We secured both the properties under contract, and UNDER the list price after only 3 days on the market because we were willing to close fast AND, most importantly, because we put up a 30k Non-Refundable Earnest Money Deposit. We also waived inspections. Hard to not take us serious with an offer like that.

We were able to do this because we inspected the properties ourselves prior to putting in our offer.

The other offers were higher than ours, but they had 3 day and 5 day inspections and only 1k in EM. These sellers were very motivated to sell and did not want to have a chance that the purchase falls out of escrow.

So they chose us.

However...We ALWAYS have a title contingency on every offer no matter what. I always require this with wholesale (assignment contracts) deals as well.

WHY IS THIS SO IMPORTANT?

If we aren’t careful, have a Non-Refundable EMD, and aren’t 100% cool with the deal...we could accidentally agree to release EM to a seller that cannot close on the property due to title issues for one reason or another.

Sure, legally, the seller would need to give us back the EM, but what if they already spent it? Then we would have to sue to get it back.

So the Non-Refundable EM is only released after we are satisfied with title...

WHY IS THIS IMPORTANT NOW??

Because one of the two houses is not able to close due to title issues, it’s going to take months to clear up that title IF they are even able to (which they probably will be able to).

IF we released EM, then we would have to fight to get it back or it would reduce the motivation of the seller to HURRY up and clear the title issues. Super important.

There is never a one size fit all on every deal. However, there are best practices that help get you more deals.

Being able to more confidently waive inspections on properties, and be more secure in your rehab budgets before offering, will give you an edge over most competing offers.

So if you are like most investors, stop hiding from rehab/construction. It is a massive part of real estate and that is not changing any time soon.

Talk soon,

Tarl

Ps. We just wrapped up our first 6-week challenge in Flippers Anonymous! I can’t wait to see the lasting effects on their businesses…But it wasn’t a shock that the most feedback we got was around the planning and rehab management weeks.