How can I take advantage of this..?

Question

Hello everyone, I’m new to the forum. I’ve recently began educating myself on real estate investing & that quest has led me here to t Bigger Pockets. I have a question for those of you who could share some knowledge. I’m currently employed by the power company here in the NY area, specifically the Southern Westchester/ Bronx area. I’ve realized that this market is expensive & it’s tough to find good cash flowing opportunities, which is fine by me, I’m looking at other markets for long term investments anyway. I currently survey the infrastructure in every neighborhood across Westchester County in 3 year cycles & a lot of the times I’m in really great neighborhoods (like Scarsdale, NY) & I find these abandoned homes in need of some work yet with lots of upside & almost always they have a letter on the door stating that this home is under management by “example manage co” & after I do what I went there to do, I almost always walk away asking myself, “how can I take advantage of this?” & so my question is, how can I take advantage of that? I’m obviously looking to learn something & possibly capitalize if I can. I thought maybe connecting with a wholesaler could work but I chose to pose the question here to see what responses I would get, thank you all in advance. This community is great.

Joe Fritton · Answer

Once you get more information about the property, such as the expected purchase price and reasonable estimates of the rehab budget and the ARV, you should then reach out to some local pro's like @Abel Curiel. Experienced professionals will let you know if the deal has any flawed assumptions and if there's room in the deal for your exit strategy.

If the deal looks good to your realtor, then it's time to look at financing. If you have a decent credit score and some cash liquidity, then you'll have no trouble finding a rehab loan. My pro tip for finding a good broker or loan officer is to reach out to several sources, but go with the guy who returns your calls and knows his stuff when you ask questions.

This goes for contractors as well. Start establishing those relationships by emailing them pics of the property and ask for their input on rough budget and scope of work.

Best,

Abel Curiel · Answer

Hey @Miguel Lozada

I agree with @Moe Ibrahim, you want to build a relationship with the owner/potential seller since this will be the toughest part of the deal. The analysis, pricing, marketing and buyer negotiation will be easier tasks once you have the trust of the owner.

First thing you want to find out is if they have considered selling their property. Many will say "no" which is fine. One of your objectives will be to find out what their motivation is for holding onto the property or potentially selling. You also want to find out where they would go if and when they sell. Then you want to dive into their timeframe for potentially off-loading the property.

All of these data points (desire to sell, motivation, plans after selling, timeframe) will help you determine how often you'll need to follow up with them until they ultimately decide to sell.

Most homeowners require several follow-ups (usually around 8-10) before they take the next step with a Realtor or Wholesaler.

In the meantime, you want to establish a rapport by finding out about what is important to them and genuinely caring about them and their situation.

Hope this helps!

Abel

Moe Ibrahim · Answer

This sounds like an opportunity to drive for dollars while getting paid for your other job as well. If you see a home that looks neglected and needs some work then write it down and look it up when you get home. Find out information on the owner contact, run the comps in the neighborhood, figure out what number makes it a deal, and call the seller. Getting the seller is the hard part,  but once you have it under contract all you have to do is find a buyer and if you got a deal that won't be hard! By the way, I'm not an expert, I'm just a guy trying to give friendly advice!

Abel Curiel · Answer

Well said!

I'm almost done with David Greene's book on Long Distance investing... he has some great insight on interviewing & working with contractors.

Malcomb Stapel · Answer

@Miguel Lozada have you tried calling these management companies and asking them about the properties?

Miguel Lozada · Answer

This occurs frequently though & I’d like to capitalize if I can. Thanks for the reply!

Miguel Lozada · Answer

And I’m a guy who appreciates the friendly advice, thank you. I’m going to do some more research & take action.

Andrew Jennings Freerks · Answer

This definitely seems like a great way to "drive for dollars" while you actually complete your own job.  Defintely give MGMT a call, and sign up for a service where you can find the owners contact information and try calling/ emailing/ texting them.  Have you gotten your preapproval/ purchase documents in order?  If you submit them an offer early on that will grab their attention and increase their chances of responding.  Just curious what areas of the Bronx do you usually cover?  I own a few investment properties in the South Bronx and have cash flowed very nicely

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