In this episode, I give you the top four reasons why you should be making lots of offers. Even brand new real estate investors should make plenty of offers. Real estate investing is a numbers game, and making lots of offers is the first step to succeeding.
Here are the top four reasons why all real estate investors must make a lot of offers:
- Very few of your offers will be accepted. The percentage of offers accepted to offers made varies for every investor, but is usually around 10%. Since so few offers will be accepted, you could literally waste months, if not years, making one offer at a time.
- Making lots of offers means you are evaluating lots of properties. This means that you are sharpening your house-buying skills. The more offers you make, the better you will be at evaluating your costs. Evaluating after-repair values and rehab costs is critical to the success of your business; the more you do it, the better at it you will be.
- If you are using a realtor to purchase your properties, it will also help them learn the types of properties you’re interested in. If you rarely make an offer, you’re making it more difficult for your realtor to understand what kind of properties you are most interested in. It’s one thing to tell them what you want, it’s another thing to put in an actual offer on a house. Realtors are business people; they are more motivated by people who walk the walk than by those who just talk the talk.
- For a new real estate investor, making offers gives you more experience in the house-buying process. Every seller is different, whether it be a bank, an owner, a seller, a reprobate situation, etc. Getting out there and making offers is really the first step into the world of real estate investing, and it is a scary step for a lot of new real estate investors. The more you do it the more comfortable you’ll be with the entire process.
The bottom line is that you will evaluate way more houses than you’ll actually buy in your real estate investing career. That’s just a fact of the business. But if you want to buy and rehab ten houses a year, you should be making at least a hundred offers a year in order to meet that goal.