Neil HParticipantFebruary 7, 2019 at 8:24 amPost count: 95
I was wondering if anyone avoids making offers on land valued over a certain amount — such as $100,000?
I recently downloaded data for an area in Colorado that has property values well over $250,000 on average. I imagine the negative response to a mailer grows exponentially as the values do. Has anyone had success making offers on such high-valued properties? Do you avoid them? Or do you simply offer more with the hopes of making $20,000 to $30,000 per transaction (as opposed to doubling your money)?
NeilChristianParticipantFebruary 7, 2019 at 8:51 amPost count: 72
You will get fewer responses but if you can find them, great deals are still there to be done. My recent mail strategy has been to mail every property in an area regardless of its value.
This strategy has paid off big time so far. So much so that a recent deal I landed, I’m splitting the profit 50/50 with a partner and I’ll still make more money on this one deal alone than I did all of last year. I’m moving away from lower valued property to solely pursue these bigger transactions.
The highest offer I have made since joining LA was a couple hundred thousand on a property worth over a million. I don’t have the money to close a deal of this size but if you find a great deal, there are so many ways to get it funded. So, why not pursue them? Deals all generally take the same amount of work (within reason) regardless of value so why not go for bigger ones.Kevin FarrellModeratorFebruary 7, 2019 at 8:52 amPost count: 900
Neil – I have not offered on any of that high value yet. J&J have discussed this on the podcast and you have the right idea. Offer 60% of comps and then sell to make $20 on the deal when selling at 70% (on a $200K deal for instance). I think they also mention that with fewer buyers in this market you can expect it to take a bit longer to sell. Also according to Jack – these offers work on expensive properties as well as cheap ones. People will get the offer and just decide that they want to be done with that property.
Let us know what you decide to do.ChristianParticipantFebruary 7, 2019 at 8:58 amPost count: 72
Kevin’s comment is a sure strategy to get some deals in the door. To expand on my own strategy a bit more, I “rifle” some parts of an area such as subdivisions then “shotgun” everything else. This allows me to make very specific offers on most property while also allowing me the chance for a home run.Neil HParticipantFebruary 7, 2019 at 9:23 amPost count: 95
Thank you for your quick responses everyone. I’ll make some offers and see what happens.MilanParticipantFebruary 7, 2019 at 10:27 amPost count: 491
Great question Neil!
I just mailed $27 000 offers on 100K properties. I’ll keep you posted how it goes.
I’m buying 10K property right now, that’s worth 40K. I’m taking the same approach 25% of value offers.ChristianParticipantFebruary 7, 2019 at 10:30 amPost count: 72
I am the same as Milan.
I didn’t make it clear that I am still offering about 25% on these higher value properties.Kevin FarrellModeratorFebruary 7, 2019 at 10:59 amPost count: 900
Christian and Milan – it really is all about getting your offer to the seller with the right situation.MilanParticipantFebruary 7, 2019 at 11:57 amPost count: 491
Yes Kevin, that’s all that matters with somehow respectable offer.Joe MartinParticipantFebruary 9, 2019 at 8:48 amPost count: 33
I pull all the data regardless of the assessed values. I’ve seen counties dramatically inflate their tax assessed values and offer a much lower millage rate. I’ve purchased $100k tax assessed properties for $10k. Their market value was $50k. Early on I made some adjustments because I thought I was offering too low if a property had a high assessed value. Now I disregard tax assessed value and take a brief look and see how much the taxes are per year and scrub out all the low ones that aren’t owned by a non profit.
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