How many people did you date before you got married? I’ll wager it was several. And I’ll wager that you considered them one at a time. A man usually doesn’t propose until he is sure he has the best match. If you want to find a spouse, that’s a good strategy. If you want to invest in apartments considering only one investment at a time is awful.
After making thousands of offers, I’m convinced that a multiple-offer strategy is the most effective way to build legacy wealth. It’s more work for the broker, but it’s more likely to result in a great investment. Here’s why.
Most offers aren’t accepted. Maybe 20–35% of accepted offers don’t close. Perhaps the operating history or inspection causes the buyer to decline instead of continuing. Or, maybe, the buyer asks for a bigger concession than the seller will give. If you’re making one offer at a time, you must re-start whenever your escrow fails.
A multiple-offer strategy lets you make decisions faster than other investors. The faster you act, the more chances at bat, and the better your odds of capturing a property that meets your objectives.
If an offer isn’t accepted or if an accepted offer doesn’t close, you still have other offers working. You’re almost certain to have the opportunity to close on a superior wealth building property. Not only that, but you’re more likely to get the available property that’s the best fit for you.
We ask our clients to clarify their values and current investment objectives before we evaluate properties. That helps you understand what kind of good deal you want. We survey what’s available and narrow the field to potential investments that are right for you.
We put the information on each possible investment into our Offer Dashboard. The dashboard makes it easy to compare several properties and the status of each offer. Many of our offers aren’t accepted. That’s OK. We don’t lose time because we have other offers working.
There is no perfect property. Every apartment-investing opportunity is different. It’s a unique cluster of imperfections. When you make multiple offers, the building you close on will have the best set of fixable imperfections available, the ones that fit the investor, landlord, and human being you want to be.
The two big upsides to the multiple-offer strategy are increased speed to close and better choice of properties.
Are you investing using a multiple-offers strategy? Should you be?
Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.“