Why Most MLS Deals Suck!

The MLS is the most common way to find “deals” for investors. Unfortunately, MLS deals are also usually the worse kinds of deals available.

Why Most MLS Deals Suck

Why?

When you have hundreds, if not thousands, of investors all looking at the same properties that are listed for everyone to see and analyze the competition for those houses becomes fierce.

You will usually get into a highest and best or a multiple offer situation where now you’re essentially forced to up your offer, reduce your inspection period, close sooner, or whatever it takes to make your cash offer even more appealing to the seller.

This sucks. Ask me how I know.

I used to scour the MLS every single day, often making 30 offers every. single. day.

It’s exhausting to have to run comps on 30 properties a day, sign the offer contract 30 times per day at 12 pages per contract, then negotiate the ones that counter back, change terms of your offer (higher price, lower inspection period, faster close, etc.), and have this back and forth game with the listing agent.

If you’re now doing the math in your head that’s 30 X 22. 30 offers/day for 22 days = 660 offers every single month.

660 offers?!

Yep…

660 is the number it takes to get enough MLS deals to make the process worth it in my opinion. Let me break down the percentages that I’ve seen over the course of my career.

For every 100 offers I’ve made approximately 10% are even remotely interested in my offer to start. That means that only 10% are even willing to counter my offer instead of a straight rejection. That leaves me with 10 properties to take a deep dive in on the comps, repairs, etc. before I counter their counter offer. Once I’ve run my numbers again on those 10 properties I have to then negotiate with the agent via my agent. There’s a ton of back and forth at this point.

Of those 10 properties only about another 10% will actually agree to the numbers before I’ve even seen the house. Yes, that’s right. I still haven’t even seen the house yet. So that means of those 100 offers I’ve got one house that I’m

If you’d like to know how I make offers on properties without ever even seeing the house you can get my FREE Making Offers On The MLS Training here.

Now, I need to go see the house with my contractors and verify that my initial rehab numbers are correct. Hint: They’re never 100% correct, but they’re usually pretty dang close.

Guess what happens next? Yep… More negotiating with the agent and seller.

At this point in the process I’m pretty confident that I can make the deal happen, but sometimes the numbers simply don’t work for a lot of reasons. Such as rehab is much higher because the pictures on the MLS are misleading, the seller is still unrealistic in their price, the agent is stubborn because they know their commission is solely based on the sale price of the house (yes, a lot of agents only care about their commission), etc.

Unfortunately, not all efforts up until this point equal you/me getting a deal. I’d put the percentage at about 50% whether or not the deal goes forward at this point. So what next?

You have hopefully made more than just 100 offers so that you have more in your pipeline to go through here. Are you starting to understand what I mean by that Most MLS Deals Suck?!

In my experience over the past 7+ years I’ve found that the magic number for getting a true, solid, and profitable deal off of the MLS is making 400 offers. For every 400 offers I’ve made in my career I’ve been able to purchase a deal that actually makes sense for me to invest in, renovate, and sell for large profits.

Don’t forget the reason you got into this business was to make a lot of money flipping houses. You didn’t get into this business to invest $200,000 in a project to make $10,000-15,000 did you? I sure hope not!

So like the title of this article says, Most MLS Deals Suck! Are there still MLS deals out there? YES! I bought 3 MLS deals last year in a matter of 6 months with making a lot less offers with a new software I use and created processes to automate this process so that we could make the purchasing process off the MLS much more profitable!

To date, off of those 3 MLS deals we bought over a 6 month period we made a NET profit of $78,359!

If you’d like to know how I make offers on properties without ever even seeing the house you can get my FREE Making Offers On The MLS Training here.

If you’re not interested in going through the MLS deals an would like access to our off-market deals be sure to reach out to one of our agents.

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