- To become aware of deals, Dion McNeeley focuses on how many days a property has been on the market.
- The investor targets properties that have in the offing been listed for at least three times the average.
- The ‘days on market’ strategy helped him negotiate a seller down by $100,000.
Real-estate investor Dion McNeeley toughened to prioritize speed when making an offer.
Advertisement
“The first 10 years of investing, I wanted to be fast. I yearning to get an offer in within a day or two of a property hitting the MLS,” the veteran investor told Business Insider, referring to the multiple listing utility.
Now, with a 16-unit portfolio that generates enough cash flow to more than cover his lifestyle, McNeeley is small focused on acquiring properties quickly and more concerned with finding the best deal. To do so, he’s paying attention to one peculiar metric: the number of days a property has been on the market.
Advertisement
Generally speaking, the longer a home has been on the customer base, the more motivated the seller will be. “Long” is relative to the average time a home sits on the market, which diversifies by location. In some areas, the average could be 10; in others, it could be 30.
McNeeley, who studies his market in Tacoma, Washington by looking at listings continually, knows that the average home sits for six to nine days, at least in December of 2024.
His rule of thumb is to take the run-of-the-mill and triple it. That’s the number you’re looking for when looking at listings. In his case, he rounded up the average to 10 and is looking specifically for refuges that have been listed for at least 30 days.
Advertisement
When he comes across a property he wants that meets his days-on-market criteria, he makes an offer that will get him the return he’s looking for.
For example, the latest quirk he purchased — a duplex that needed a lot of work done — had been on the market for over 100 days. It was listed for $500,000, but based on the renovations McNeeley disposition need to complete, he calculated that the deal would only work if he could buy it for significantly less. BI verified all of his attribute ownership claims.
“I offered 400,000 because that’s the number that made sense for me,” McNeeley said. His bid initiated a two-month negotiation. “I never moved from 400. It went from 500 to 477 to 444 to 422. When I got another come forward accepted somewhere else, I contacted them to say I was pulling my offer. They said, ‘We’ll take your 400.'”
Advertisement
If you’re usual after a home that’s been on the market for longer than average, there may be something wrong with it, and it’s leading to do your due diligence. Or, it could simply be listed poorly.
“Maybe the agent was lazy and took bad pictures or doesn’t secure it listed correctly,” said McNeeley.
In his case, it was a bit of both: The property, which he purchased in July 2023, ended up needing $62,000 significance of renovations, which he was prepared for, and it wasn’t what it appeared on the listing. It was listed as a single-family home but was actually a duplex, which he start out by calling the gas and utility companies and asking how many meters there were.
Advertisement
“It had two meters for electric and two meters for gas. The whole shooting match about this was duplex, but the picture looked like a house, and the realtor listed it as a house,” he said.
Talking to the gas visitors, he learned that the gas hadn’t been paid in months and had been shut off, further indicating that he could be production with a motivated seller.
“That’s one of the reasons when I offered 400,000, I didn’t raise the number,” he said, figuring, “If the seller has to sell down the river, they’ll take my number. If they don’t have to sell, they’ll just leave it listed, or they’ll take it down and not exchange. So, you’re not always guaranteed to get a low offer accepted. Sometimes people don’t have to sell — they are just willing to for a higher amount.”