1,001 Offer Investors

1,001 Offer Investors

Copyright (c) 2011, Deanna and Jim's GOLD Team

      Attempting to earn a superior return on your investment is good capitalist behavior.  Attempting to find $100 dollar bills on a public street in a busy city has, however, very low probability of success.  Shooting baskets from the opposite end of the gym has low probability of success.

      Some investors have the attitude that if they write enough offers 25% below probable appraised market value they will eventually get lucky.  Our experience is that such offers take little time from the investor to request, take selling agent and listing agent time to prepare and present, and end up going nowhere.

     And if the offers are all on short sales perhaps 10 % of them will get ratified. But 100% of those will get appraised at market value and countered by the seller's bank(s) months later.  At this point the investors walk.

    Making 1,001 lowball offers may provide the illusion of "building a pipeline." The pipeline is illusion. 

    Flipping investors can operate in bimodal distressed markets by purchasing at the lower market value around which distressed properties are selling, making carefully budgeted improvements, and selling at the higher market value around which freshly rehabbed properties are selling. This activity itself affects the market dynamic in that neighborhood and eventually will remove all the distressed properties. This does not work in single mode markets. Like all economic activities with low barriers to entry competing investors will be attracted and eventually drive the marginal rate of return to very close to break even.  The flipping opportunities available are basically transitory arbitrage while market prices adjust.  Like sharks, flippers need constantly to be on the prowl for new areas with unharvested food supplies.

(Deanna and Jim's GOLD Team welcomes flipping investors. We love to work with realistic investors. Investors trying to find $100 bills on the sidewalk are encouraged to seek other agents, or better yet, get their own real estate license.  We have handled over 500 northern Virginia residential real estate sales in the last 10 years. We have distressed property expert, REO, MBA, MSE, MA and Associate Broker credentials. We do not participate in short flips.)