I think the prevailing question I received last week in response to advice in another one of my articles was, “How in the heck do I make 100 real estate offers a week?” and there were many off-shoot questions from there. I am going to try and write this so that it progresses from what you do as a beginner to what you do as an experienced investor.
Understand right off the bat that as a beginner, you are looking for one property. That is what you need to find in order to get started. Stop dreaming about 10 properties and 20 properties. Heck, stop thinking about two. Just remember that you need ONE property to get started. In order to find that one property, you have to make offers.
Track Every Piece of Data
We started making offers on the MLS from day one, and we tracked everything. A simple spreadsheet was how we operated for years. We kept a record of every offer we made. We tracked the address, zip code, date of the offer, square footage, offer price, and offer price per square foot. The price per square foot is a common denominator that you can track for any property in any location and any given time period. It will be a constant that you can compare on many different levels.
When we would purchase one of those properties, we would create a second spreadsheet where we kept that data. We added the actual contract price, closing date, renovation cost, and renovation cost per square foot. We also started in very narrow areas. When you hear the terminology “farm area,” it is referring to the very specific and usually narrow area of town that you want to learn like the back of your hand. So our initial farm area was fairly small, and the data we were keeping was very helpful.
In a relatively small time period, we had dozens and then hundreds of offers to be able to look back on and track what price per square foot we were offering in an area. Then we could see what price pre square foot we were actually paying when we won a contract. In turn, we could see what price per square foot were we paying for renovations. The next progression was to add rental rates for each property since we were tracking management from early on.
You should be able to tell fairly quickly why this is important and how powerful a tool like this can be. We knew what price to pay for properties in those areas based on what the data told us. We had offers on properties that were rejected or sold to someone else. We could easily pull the wining price from public data and calculate what price per square foot a property eventually sold for. More importantly, we knew what prices per square foot we were paying on properties that we were getting. Then we knew what price we were paying per square foot on renovations and eventually even what price per square foot properties were renting for.
It did not matter then and it does not matter today if an investor is brand new or has years of experience. Simply tracking important data for your business is step #1 to really ramping up your business and growing into a well-oiled machine.
Increasing the Number of Offers You Make
There are a lot of ways you can increase the number of leads you make, especially on MLS properties. We do two things to accomplish this. First, we develop relationships with the big listing agents or brokers. When I say “relationship,” do not read anything more into that. It means that they have to know who you are and that you are serious about buying property. Introduce yourself and ask how they routinely operate. Many will publish a list of all of their listings on a weekly, if not more regular, schedule. So they will publish every property they have and send them out by email to a list of potential buyers. You want to be on that list.
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Contact Orenda Real Estate Services
For more information on the Kansas City Real Estate Market, or to learn more about how you can increase the value of your investment property, contact us today by calling (816) 355-4242 or CLICK HERE to connect with us online.