What's the Strategic and Realistic Way of Making Offers?

[Joseph Sasotona]

Good Day BP!

I am still in the process of reading more books about real estate and listening to podcasts but I still haven't found the answer to this question in my mind:

I am currently on the hunt for a second property and will make it my new primary residence. The strategy I am thinking of implementing is to turn my current home into an investment/long term rental property, and use the cash flow from renting out this home to put towards my mortgage for the second property. My current home will cashflow around $800-1000 based on how much a neighbor's house is currently renting for, and also based on BP's rent estimator. I plan to do this process every one to two years so I can slowly grow my portfolio.

Currently I have been looking at homes listed in the $200k - $300k range and aiming to acquire it for 80% of comps/recently sold in the same zip code/vicinity. I am mainly looking at ready to move-in houses that will not require any major rehab. If there is any rehab to be done, it would only be cosmetic in nature. Is this offer realistic or is it too low? Also is this possible for new construction being sold by builders? Or should I just focus on privately owned homes?

Thanks for your feedback!

[Casey CJ Noble]

Hi Joseph - I have found the new dynamics of our market have been creating opportunities close to the discount you're looking for.  I've recently done similar deals both personally and for my buyer clients.  It is certainly dependent on seller situation and motivation, but the deals are out there and potential to exceed the 1% rule.  There are certain indicators that help us identify these types of properties, but it comes down to putting in offers and negotiating/testing sellers on these potential properties.  I'd be happy to connect to see how I can help out, feel free to send me a PM!