What am I doing wrong?

Member since 2022 · 58 posts · 16 votes

Hey all,

I'm newer to the real estate game and I've been analyzing a bunch of deals but none of them seem to be penciling out. Either none of them work or I'm doing something wrong. I'm inclined to believe it's the latter since I'm new at this. Of course, there's the number that makes ever deal work, but I'm struggling to find any 'reasonable' numbers (not $100k under listed price).

I'm looking in the Winter Haven/Davenport area and I've been analyzing with either conventional loan details or seller financing options. I think the reason may be due to me adding some 'cushion' to be safe on the numbers which is typically: 10% property management fee, 5% capex, 10% maintenance, on top of any HOA fees and so on.

Any advice or guidance would be appreciated!

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Joe VilleneuvePro Member

Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes

Never question your numbers...and never go back and change any of them to make a deal work on paper. If the numbers don's work, you're not wrong...the property is.

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Fallon GilbertPro Member
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Member since 2022 · 58 posts · 16 votes
3y
Quote from @David Dachtera:

... and, of course, avoid HOAs where ever possible. No one but the owner should assert control over a property.
My $0.02 ...

Yeah this has been something I've been going back and forth with. HOA adds more cost but they also cover maintenance which is beneficial since I live OOS.
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Fallon GilbertPro Member
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Member since 2022 · 58 posts · 16 votes
3y
Quote from @Jay Thomas:

Real estate is a tricky game, but it's definitely still possible to find good investments when you look in the right places. With today's interest rates, it can be difficult to locate properties with great returns upfront. However, if you keep your eyes open and search diligently, eventually something fitting your needs should come up! Best of luck on the hunt.

Have any real estate questions? Feel free to reach out; I'm always happy to help! Good luck!

Yeah, I seem to be having more luck in another market rather than FL since it's very elevated right now. I know there are deals to be found but I need to build a more solid team there first. Thanks!
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Vicente Terán
Contractor · Phoenix, AZ · Member since 2021 · 26 posts · 14 votes
3y
I don’t think you’re doing anything wrong… my feedback would be how can you get creative to make the deal work? Example, if you’re looking at a 3 bed / 2 bath that doesn’t pencil, ask yourself… if this was a 4 bed or 5 bed would it pencil then?

I have found that every property I purchase rarely works “as-is”… it takes me adding bathrooms, bedrooms, pools, etc. to make the property “work”
In this market it certainly takes a good bit of creativity to get deals to pencil but if you can think out of the box, and find ways to roll up your sleeves and make the deal work, then I’m confident you’ll find success! Good luck and don’t hesitate to reach out if I can be of help to you!

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Fallon GilbertPro Member
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Member since 2022 · 58 posts · 16 votes
3y
Quote from @Vicente Terán:

I don’t think you’re doing anything wrong… my feedback would be how can you get creative to make the deal work? Example, if you’re looking at a 3 bed / 2 bath that doesn’t pencil, ask yourself… if this was a 4 bed or 5 bed would it pencil then?

I have found that every property I purchase rarely works “as-is”… it takes me adding bathrooms, bedrooms, pools, etc. to make the property “work”
In this market it certainly takes a good bit of creativity to get deals to pencil but if you can think out of the box, and find ways to roll up your sleeves and make the deal work, then I’m confident you’ll find success! Good luck and don’t hesitate to reach out if I can be of help to you!

Yeah, I was thinking along similar lines. I'm not adverse to properties that may need some rehab work to make things better. I currently don't have enough of a solid team to do major projects so I've been looking more towards turn-key properties
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Dave SpoonerPro Member
Rental Property Investor · Cincinnati, OH · Member since 2020 · 869 posts · 823 votes
3y
Agreed with most others. Don't change your numbers to fit the listings. IF you can't afford it then move on to something that works in your price. Keep on searching! Best of luck.
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Fallon GilbertPro Member
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Member since 2022 · 58 posts · 16 votes
3y
Quote from @Dave Spooner:

Agreed with most others. Don't change your numbers to fit the listings. IF you can't afford it then move on to something that works in your price. Keep on searching! Best of luck.

Thank you!
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