How to pick the next property

[Jeff Puciato]

I’m trying to buy my second investment property but I’m struggling in finding one. I want a 3 or 4 unit. There are very few available in my market. I found one I like but they won’t take my offer which was 20k under asking and I’m not willing to go higher. I like to follow the 1% rule and I look at CoCROI. My question is, do I continue to wait longer for a property or do I pay a little more and fall out of line from my criteria. The longer I wait the longer it takes to build equity, appreciation, cash flow, ect. 

Thanks ! 

[Samuel Eddinger]

Hey @Jeff Puciato.

Like you, I have competing thoughts on this.  As a long term investor, I know that another opportunity will always come along if you are patient.  That advice has worked well for me over the years.

With that said, I think it is likely that the market (in CT) can continue to rise as we have a historically low level of building in the state.  I think rents are going to keep going up for the foreseeable future.  Because of this, I am only buying properties that I am willing and want to hold long term.  If you are willing to hold for 10 to 15 years, the sale price will be much higher than your current purchase price.  In that regards, find a property that you would love to own long term, and overpay (a bit) to have it.  If the market goes down, do not worry as you intend to hold it until the market comes back.

This game is not get rich quick, but get rich slow.