Investors with 10+ years of experience are you sitting it out?

[Carol Bloom]

Hello BP members!

I am Carol, I'm curious to hear from investors with 10+ years experience, what is your strategy for 2018? 

Are you option A: "wait and see" with new tax reform strategies before purchasing any new properties? 

Option B: "sit on the sidelines" the market is too high, sit with cash to watch new investors make mistakes on when to buy?

Option C:  Other- please explain?

Thanks!

Carol

[Mike H.]

I think I'm technically at 10 years so I'll weigh on. 

Some background so you have some context on my answer though. I'm strictly a buy and hold investor.  I currently own 64 (just got #65 under contract last week) sfh's here in illinois. My typical deal/house is a 3/2, 1500 sq ft house in nicer areas with good schools.  They appraise out at about 150k apiece and I'm getting them at an all in price (i.e. purchase plus rehab) of about 100k to 110k apiece. They rent out for about 1400/mo. Taxes are roughly 300 to 350/mo though so they're high here in Illinois.

My answer: I don't think I'd ever sit out investing in real estate - not if the numbers make sense. 

When I started out I was buying about 3 a year. This was just as the bust started. Then I went on a 3 or 4 year run of buying just over 1 house a month. That run ended last december as I picked up 4 houses in 6 weeks - some really solid deals.

This last year, I didn't hit on a thing though until a month ago. Got one. And just got another one under contract last week. 

If I can pick up houses at 70% of the ARV or even a couple at 75% of the ARV (I wouldn't do too many there), that will generate 400 to 500 gross rental profits (i.e. before repairs/cap ex), then I'm going to continue to do it.

I thought they were completely gone and then I hit on 2 in a month. I just don't see any reason to stop buying if the numbers make sense. 

What I wouldn't do is reach and go to 85 or 90% of ARV (which is where most of the stuff that is considered a "deal" is at in my areas right now). That is only going to kill my reserves and my cash flow numbers. That is where I think investors get into trouble.

But I just don't see any reason to sit on the sidelines ever. There are going to be deals that come up even once in a blue moon. Why not be ready to grab them if they do?