Ep 149 - Putting Your Best Foot Forward When Making Offers

Hey, everybody. Flip and Danny here, founders of the Freedom Real estate group family of companies. And welcome to another episode of Freedom through passive income.

You forgot the words podcast.

I know. Let's see what she does with us. Yes. Welcome to another episode of our podcast.

Called freedom through Passive.

Here we go. And this episode is entitled putting your best foot forward when making offers.

Yeah, so when we're making offers on properties, we always start with our initial due diligence period. The initial due diligence starts also with our partner Ken, who is underwriting the deals. And so when we get a lead in, it goes directly to our acquisitions team. Right. Now that's Eric and Della. Eric and Della will do a little bit of homework. They've got their little buy boxes and what's good, and they have actual grades that they put on it. This is an A1 means it's hot. It's, you know, B and C. And then they send it. If it looks good and promising, then they send it over. Ken with that grading system, so he knows how to prioritize what's being sent over to him. And then he's gonna do just some initial due diligence once that due diligence. Initial due diligence is done. Now, that could involve questions back and forth. Right. So Ken might go, okay, this is looking like a good deal, but here's the questions that I want. Go dig in just a little bit more, because the last thing that we want to do is take step two, which gets more serious, and Flip's going to talk about that step if we're not ready. So there'll be a little bit back and forth, but as soon as possible, we're going to get to the stage that Flip's going to talk about, even if it means we do a quick preliminary tour of a property just to make sure the condition is there. That typically happens when a price is high. And we're like, we don't want to take this next serious step until we go. Okay, so what is the next serious step?

Yeah, it has to pass a sniff test.

Yes.

So the next step is when we submit an loi, which is our letter of intent. Now, this isn't just. We whip together a piece of paper that says, hey, we really like your place. We want to buy it for X and close in three months. And sign here.

Yeah.

You know, this is. It's way more detailed than that because, number one, we want to show that, well, we're putting our best foot forward. We want to show that we're actual serious buyers. We're not tire kickers. Right. So we're also going to show our proof of funds.

Yeah.

We're going to show a credibility deck. And that is simply just. I like calling it a credibility deck. It's a PowerPoint presentation or keynote for us because Mac. But it's just a presentation of a number of slides that talk about who we are, what we've done in the past, what apartments we've done in the past, what lenders we work with, just all the different things. So that way if somebody who doesn't know us from anyone, they can look at this, oh, wow, these people are serious. Look what they've done. Because we want that reaction. We can also put in the letter of intent that our earnest money will go hard. Which means that at that point, once it goes hard, we don't get it back. Yeah, it's theirs. And then also broker relationships, you know, because showing that we've worked with brokers and we work with, you know, this broker and that broker and just to show. And then they can then call that broker and said, hey, you guys work with these people. What do you think of them? So it really just, it's, it's like our resume, you know, and also our. Why just escape me at the end. You're the people that they can call references. Thank you. References. It says a resume with references.

Yeah. So in this world, especially the larger. The deal that you get, people want to work with people that they trust. And we've all worked with buyers and sellers, quite frankly, that kick the tires aren't serious. Waste our time. And when you do all of this work to put your best foot forward, especially if you're amongst a highest and best offer situation where other people are also looking at a deal, the seller is going to take your offer a lot more seriously, the broker is going to take your offer a lot more seriously. And the broker is the one whispering in the ear of that seller, typically. So if there's multiple people saying, I'm interested, I'm interested, I'm interested. And we've taken the time not to kick out an loi for the sake of kicking out an loi. And we've taken the time to do that homework and that back and forth questions, showing we're serious. And then when we finally get that loi out, we provide all this extra information, everybody's just like, hey, you know, these guys, they're the real deal. They've done a lot of homework up front. They're not. They're just throwing us a piece of paper and they've included all this information of what they've done and the type of properties that they hold and, you know, things like that. So I think this is most important for when you're in that multi offer situation. But I think it's important no matter what, you want every single seller to take you seriously. And it's part of the reason why we got the 48 unit above other people who were offering more than we were because we put our best foot forward, did all of the homework, walked like so many of the units prior to even putting the LOI in once ours got there. And he had competing offers that were sight unseen. He's like, these guys just did all the work. They actually know what they're offering and aren't guessing. So I think that's just. There's a lot of power in that.

Yeah. The amount of work that goes into the pre loi is, you know, it still blows me away. You know, I'm so used. I'm still used to single family houses. I can look up, look at an address, tell me the price I can guess and be pretty good about what the price is that we can buy it for. Yeah, not with multifamily. Yeah, it's the amount of work and especially with Ken, the amount of work that he does in the underwriting just absolutely baffling. And that's even before we even submitted an loi. So, yeah, that's been a learning experience.

It sure has.

Well, make sure you're heading on over to our website, freedomcapitalinvestments.com and joining our investor club. And also, let's see what you say about this. Make sure that you're hitting the like.

Button if you want to start making better offers and put your best foot forward.

You heading over to Facebook and LinkedIn to our groups over there. The whole gang's out there for you to ask any questions. But that's a great, great place to get your questions in as well. But make sure you're subscribing on YouTube and doing all that fun stuff. But we like to end all of.

Our episodes with Sorry as I call.

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I'm ready. I'm ready.

I'm ready. And. And we always like to end all of our episodes with Invest Smart Live Happy. Bye, everybody. Nothing on this show should be considered specific personal or professional advice. Please consult an appropriate tax, legal, real estate, financial or business professional for individualized advice, opinions and information on this show are not guaranteed. All investment strategies have the potential for profit or loss.

Sam.