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Updated almost 2 years ago on . Most recent reply

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4
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Kamran Pirwani
4
Votes |
6
Posts

Am I doing something wrong?

Kamran Pirwani
Posted

Hey everyone, I'm just getting started looking for a multi-family home in areas I would prefer to live in and be owner occupied: Dallas, Houston, San Antonio, Austin, etc. I've actually not set any filters and have just been trying to find certain properties with cap rates > 6% under $800,000 nationwide (just to evaluate my ability to find/audit a given deal). Over the last week, I've looked at over 1,000 properties. Around 3% of those actually passed the 1% rule, but it was because they are mostly in developing areas which have a lot of associated crime/break ins. When following the 1% rule, a lot of properties fall within 0.5% of that and are very cash flow negative when plugging into the calculator. I've tried "configuring" the deals in a variety of ways, 40% down, less interest, significantly lower listing price, but a lot of the numbers just don't align for it to be cash flow positive.

I'm going to keep looking, but wanted to make sure there wasn't something I was overlooking or glaring. Is this because we are predominantly in a sellers market?

Most Popular Reply

User Stats

35
Posts
29
Votes
Matt Barth
  • Investor
29
Votes |
35
Posts
Matt Barth
  • Investor
Replied

No, you aren’t doing anything wrong. Prices haven’t adjusted to the new reality of higher rates. It will likely take some time to find something that actually makes sense and lots of people are still willing to pay too much from money they’ve raised for deals and need to spend so just keep looking and when the time is right you’ll be ready. 

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