This episode is a continuation of one we did where we discussed due diligence. In the previous episode, as a quick little recap, we talked about due diligence on the front end, pulling the initial values, calling to check taxes, those kinds of things. We went through the note evaluation short checklist. What we will discuss today is, what do you do after your bid is accepted or countered?
The first step, which happens a lot of times, is when somebody gets their bid accepted, they have the OS method. The OS method is, “Oh shit. What do I do now?” The thing to keep in mind is not to stress out. One of the things I always see a lot of note investors do is they want to submit one, two, or three bids on a big tape and then all three of them don’t get accepted and they’re like, “I didn’t get anything.” This is why I tell people, submit bids on ten or fifteen if you can. Even if you don’t have the full amount of funds, you never know what’s going to happen during your due diligence process, especially after the bids are accepted and you’re looking through things that you may end up having to kill a few. I always say submit bids on more than what you expect and you’d be surprised what falls through the cracks.
Let’s do a quick recap. We talked about pulling values and checking values initially online, we’re trying to get a realtor to go out and look at things. The minute you get a yes, if the seller calls and tells you, “Your bid is accepted,” or you get an email that the bid is accepted, you better get on your horse and get a realtor or somebody to drive by the property. The easiest way to get a realtor to drive by is when you could pay your realtor to go do it. You pay for a BPO if you want to. I think the best way to do is use a local realtor. There are some nationwide companies that offer BPO services. I’m not the biggest fan of those, the reason is they have their vendors and oftentimes those realtors get signed up for stuff and it’s their system that’s pulling the numbers. They’re probably not getting out of the car a lot of the time when they drive by to look at the property.
Anytime you have a local realtor go by and do a desktop CMA for you, after they’ve driven by the property and gotten photos for you is much better than having the nationwide company. It might take a little bit more work from you on your part to jump on Zillow.com or ActiveRain.com or Realtor.com to find somebody, but I think it’s going to be much higher value as far as giving the value to you in a much more clear and precise number. A couple of other tricks that we use to get realtors to go out, we jump on Meetup.com and look for realtors in specific areas. A lot of my students will use the online message portals that we use in our workshops through Basecamp.com to ask if anybody knows a realtor nearby who can do a drive by and take a look at it. Anytime you’re going to have a network of realtors, it helps. This is also why I tell most people, “Just focus on five or six markets to begin with so you’re not being overwhelmed trying to get twenty realtors in twenty different markets because it can take a while to get stuff.”
We do pay sometimes $50 to $100 for a BPO. Sometimes if we can’t get a realtor to go by and drive by, we will pay a company called WeGoLook to drive by the property. In a case where we have to pay $99 to WeGoLook to go take a look at it, I’m going to make sure that it’s got to be in pristine condition. While WeGoLook is not going to give you a true value, they will take a tremendous amount of pictures and photos of the property which will help you when you’re looking, “Yeah, it’s in good shape,” or “No, it’s not in good shape,” or “It’s not in the greatest of neighborhoods.”
If you can take the time to go drive by the asset or if you’re looking at ten or twelve assets in the same area, it might be worth just buying a Southwest Airlines ticket, jump in on a plane, flying up there for a day, looking around and coming back. Sometimes, it’s worth doing that if you’re buying multiple assets. If it’s one or two assets in different areas, get on the phone and get a realtor to do this. I don’t wait around for approval on a lot of things. A lot of times I’m having a realtor to drive by ahead of time, especially if I know that I’m one of the few ones bidding on the assets. If it’s up for auction or they’re submitting bids for a week or so, I’m not going to spend a lot of money on that because I don’t want to waste the realtor’s time. Once it’s approved, you better bet your butt that we’re getting on the phones getting realtors to go out, especially if we got seven days or less than two business weeks to close on the asset. Always get a realtor to do that.