How I Use Aggressive Acquisition Tactics
Over the last two years I've been finding more and more success with using an aggressive acquisition strategy for domain and real estate flipping. This is not aggressive as in swinging my fist around but more about taking a direct line of conversation and offering more than the asked price.
For context on aggressive acquisition here is a recap:
- 2019 purchased several domains higher than the asking price
- 2019 purchased several businesses from sites like Gumtree and private business broker sites
- 2020 purchased a house for $12k higher than the listing price before it went to a home open
- 2020 purchased a struggling POD store for $20k more than the asking price
- 2021 purchased a house for $20k higher than the asking price before went to a home open
- 2021 purchased a homewares store for $8k higher than listing price
This is just a recap of the notable purchases over the last 2 years.
What is the acquisition strategy?
My entire thought process is that I need to be the first person and the first offer on their table. I have a busy life where I can not just drop everything to log into a marketplace or inspect a house. To combat against people who have time on their side I have capital and I have no problem having a direct conversation with the realtor or the broker about what it would take to make a sale today and what ballpark figure do we need to start at.
While this is a very direct conversation it's the only one that matters. I have tried taking the nice approach and I got nowhere fast. Once I spoke very directly about my intent and the actual sale mechanics I got the buy-in from the person I was talking to.
The questions I ask:
- What figure is the owner looking for?
- What number would it take for this to move into sale negotiations right now?
- Would the seller take [xx] above the listing price?
- Would that number help to take this listing off the market for you?
These are direct and they show the intent behind my offer, they show the seller I am dead keen on this asset and I have more than what is being asked ready to go.
In my experience, this has worked 9/10 times.
A disclaimer I am not an expert flipper I am a regular guy just looking for great deals I know I can flip for a higher price than what I am buying it for today.
1 What figure is the owner looking for?
I ask this because I want the seller to know I am thinking about the price point to purchase this asset. It shows I am in the consideration phase.
2 What number would it take for this deal to move into sales negotiations?
This shows I want this asset and I am ready to have a serious discussion, it shows I have capital behind me. This then moves me into a ready to buy prospect for the seller. It cements me as a candidate for the sale.
3 Would the seller take [xx] above the listing price?
This now shows the seller I really want this asset. It shows I am serious and want action today. I don't want competition or extra noise of the home open or other wildcards enquiring about the listing. By being a fast action taker I can remove any headaches for the seller and the owner by being ready to go today.
4 Would that number help to take the listing off the market for you?
Now Im talking to the seller about making this easy for them. Every seller wants to make a quick sale. They have other listings to manage and if I can make this exchange a smooth one by being a red hot buyer with finance ready to go they can then sign this listing off as done and start moving towards their next listing.
The tactic here also works best for the seller who won't have to have multiple sales conversations and just gets a buyer who wants what they have and is willing to pay more than the asking price. That's an attractive offer for any buyer.
I really wanted to build a bank of assets in 2021 especially after 2020 being a mess of a year and markets being ruined. My goal was to acquire what I could and have a stable of digital assets in my stable for the reserve if we had a world wide pandemic again and I needed cash injections I would sell off these assets.
With real estate in my city right now real estate is exploding there is not enough houses on the market for hungry buyers. Its not uncommon for houses to sell in a week. My last two house purchases the 2020 purchase I picked it up and secured it 1 hour after listing online, my 2021 purchase I picked it up and secured it 4 hours after listing online. When selling property my 2020 purchase I flipped it within 48 hours of listing the property online and I managed to make $40k profit on this one. Real estate here is hot property.
I hope that the tactic of aggressive acquisitions is clearer for you now about why to go in high and secure the asset before others can even get a look in. You have to know what you are looking for to do this but if you have the funds and want the asset go after it.