Skip to content
×
Pro Members Get
Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
ANNUAL Save 54%
$32.50 /mo
$390 billed annualy
MONTHLY
$69 /mo
billed monthly
7 day free trial. Cancel anytime
×
Take Your Forum Experience
to the Next Level
Create a free account and join over 3 million investors sharing
their journeys and helping each other succeed.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
Already a member?  Login here
Buying & Selling Real Estate
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated over 6 years ago on . Most recent reply

User Stats

18
Posts
1
Votes
Ian Bautista
  • Redondo Beach, CA
1
Votes |
18
Posts

Buying Out-of-State Multi-Family Property

Ian Bautista
  • Redondo Beach, CA
Posted

Good morning BPers!

I currently live in the Los Angeles area and am looking to invest in multi-family properties out of state due to the high prices in LA. My best friend lives in Florida and we've decided to partner up and buy some properties out there. He mentioned our plan to one of his really good friends who happens to be a real estate investor himself (I've met him many times and seems like a stand-up guy) and his friend offered up a fourplex in his portfolio that he's looking to sell, but hasn't listed yet. He's says it's worth about $285K and rent is $2900/mo. Running the numbers gives us just over $500 in cash flow each month and a 10% CoC ROI.

Numbers look ok, but not great due to the price.  The problem I'm running into is coming up with a reasonable offer for the quad.  After looking at the tax assessor's website, I see that the owner bought the property in 2014 for $110K (although he did say he totally upgraded the place after buying it).  Also an investment company bought three quads in the same complex for $593K in July 2017.  

I'm wondering if the owner is basing the price on the current rent, because I can't really see any comps that justify a $285K price.  I'm hesitant to talk with a local realtor, because I don't want them contacting the owner and trying to get involved in this off-market deal.  Also, I need to be a little delicate in how I approach a lower price since my best friend and him are pretty close.  Any advice on how to come up with a good purchasing price and not blow up the deal?  Thanks in advance for the help!

-Ian

Most Popular Reply

User Stats

6,241
Posts
3,801
Votes
Aaron K.
  • Specialist
  • Riverside, CA
3,801
Votes |
6,241
Posts
Aaron K.
  • Specialist
  • Riverside, CA
Replied

This seems off to me, it doesn't pass the smell test.  If he did a full rehab on the units and others in the same complex go for $593k is he really that good a friend to sell something almost $300k below market value?

Loading replies...