Buying Small Multi-Fam

[Nova Mendoza]

What to do when you find a solid deal that meets your CoC return and cash flow but your property manager says that they won't take that area. I sent the deal to my agent and he said it's a solid deal in a C class area great for cash flow. It's my first Out Of State deal so my property manager and my agent are an important part of my team being the eyes, ears, and feet on the ground. #teamclash

Any advice?

[Account Closed]

"Not all money is good money"

Buying the wrong property comes with so many negatives the money you make is not worth what you lose mentally. I've been in the multi-unit market for more than 50 years and many investors who invest in undesirable neighborhoods are as crazy as their tenants and the outcomes are not pretty. .Dealing with undesirable properties and trailer trash tenants is not worth any amount of money when there are thousands of properties for sale that will make even more money.

Higher-end and more-desirable properties will always appreciate better than undesirable properties and the real money is made from appreciation and not the cashflow. One good property can appreciate better than 10 undesirable properties.

Before I purchase a property, I look as 100 to 200 properties before making a decision. Even as high as prices are in the Los Angeles area I just put a 6-unit property in escrow for $1,750,000 ($292,000 per unit). The property is in a total working-class Hispanic area and my 10-year calculations based on my worse-case numbers is I will earn including cashflow, rent increases and appreciation no less than $147,000 per year and if things go well we will earn close to $2 million or $200,000 per year for 10 years.

My point about telling about my recent purchase is; if you want to make the most-profitable investments then don't let anxiety block success. Many investors are so impatient their money burns holes in their pockets. Sometimes, I have several properties in escrow at the same time. Sometimes, I can't find an investment for 2 or 3 years even when I look every day.

Post your numbers for this property with a realistic explanation of why your management company does not want to manage the property.