Investing in real estate can be a lucrative way to build wealth, but it’s not always easy if you are new to the game and not used to dealing with competition. One of the biggest challenges investors face is winning a bidding war when trying to purchase an investment property in a competitive market like Milwaukee. In this blog post, we’ll provide five tips to help you win a bidding war and close the deal on your next investment property.
1. Get Pre-Approved for Financing Before Making Offers
Whether you’re buying your first investment property or adding to your portfolio, getting pre-approved for financing is essential. For investment properties, different financing options are available, such as conventional loans, DSCR loans (Debt Service Coverage Ratio), or hard money loans, each with their own terms. For example, DSCR loans are popular among investors in Milwaukee because they allow financing based on the property’s income potential rather than your personal income. Having a pre-approval in hand shows sellers that you’re a serious buyer with the financial backing to close a deal quickly. In Milwaukee’s competitive market, where investment properties are being snapped up fast—often within 30 days of listing—a pre-approval can be the key to winning the bidding war.
At Northwoods Property Resources, we have a team of professional buyers who can help you get pre-approved for financing. We work with a variety of lenders and can offer many resources in the Milwaukee area that can help our clients find the best financing options for their investment properties.
2. Be Prepared to Act Quickly When Spotting a Deal
In Milwaukee, the window to secure a great investment property can close faster than you think. In 2024, properties in hot neighborhoods like Bay View and Brewer’s Hill are averaging only 20 days on the market, according to recent data from Zillow. This makes it crucial to have your financing, legal documents, and decision-making process streamlined. To stay competitive, set up automatic alerts for new listings and off-market opportunities. Off-market deals, in particular, are valuable because they’re often not exposed to a bidding frenzy, giving you a first-mover advantage. We’ve helped numerous investors close deals within 48 hours of a property hitting the market by ensuring they had everything in place to act immediately. Partnering with an agent who has local market expertise can also give you the edge, as they may know about deals before they even hit the MLS.
At Northwoods Property Resources, we have a team of professional buyers who can help you act quickly when a great investment opportunity arises. We’ll work with you to ensure that all of your paperwork is in order and that you’re ready to make your purchase as quickly as possible and on the best terms.
3. Offer a Strong Purchase Price
In a bidding war, price matters, but offering a competitive price doesn’t just mean throwing out the highest number. Smart investors in Milwaukee do their homework by researching comparable properties (comps) in the area. According to the Greater Milwaukee Association of Realtors, investment properties in neighborhoods like Riverwest or Walker’s Point are selling 5-10% above asking price in 2024, depending on the property’s condition and rental potential. When crafting your offer, consider factors like the local rental market, property appreciation trends, and potential repair costs. Offering a price that reflects both current market conditions and long-term investment value can help you win a bidding war without overextending your budget. In one recent deal, we helped a client secure a triplex in East Town by offering just 3% over asking but including non-monetary incentives that sealed the deal.
At Northwoods Property Resources, we have a team of professional buyers who can help you determine a fair purchase price for the investment property you’re interested in. We’ll provide you with a comprehensive analysis of the property and the local market to help you make an informed decision about how much to offer, ensuring you don’t over pay.
4. Offer Non-Monetary Incentives to Win Your Bidding War
In addition to your purchase price, non-monetary incentives can make your offer stand out in Milwaukee’s competitive real estate market. For example, offering a quick closing timeline—especially within 15 to 20 days—can be a game-changer for sellers looking to move fast. Additionally, agreeing to take on minor repairs or waiving contingencies can give your offer an edge. In a recent deal, we helped an investor secure a property by offering the seller free rent-back for 30 days post-closing, allowing them extra time to relocate. According to a 2023 report by Redfin, 45% of winning offers nationwide included at least one waived contingency. Strategically using these incentives can increase the appeal of your offer without increasing your financial risk.
At Northwoods Property Resources, we have a team of professional buyers who can help you come up with creative non-monetary incentives to offer sellers. We’ll work with you to find out what the seller is looking for and come up with a plan to make your offer more appealing than other offers that are on the table.
5. Work with a Professional Buyer
One of the best ways to win a bidding war is to work with a professional buyer like the team at Northwoods Property Resources. We have years of experience helping investors find and close deals on investment properties in Milwaukee. We’ll work with you every step of the way to ensure that you’re getting the best deal possible.
In addition to helping you with financing, paperwork, and negotiations, we can also provide you with access to off-market properties and other investment opportunities that you wouldn’t be able to find on your own. This can give you a significant advantage when it comes to finding and closing deals on investment properties in Milwaukee.
Our Team Can Help!
Winning a bidding war when buying an investment property in a competitive market like Milwaukee can be challenging, but it’s not impossible. By following these five tips and working with a professional buyer like the team at Northwoods Property Resources, you can increase your chances of finding and closing deals on investment properties in Milwaukee. So, what are you waiting for? Contact us today to learn more about how we can help you achieve your investment goals here in the Milwaukee area! (920) 851-9727