Intro and a plea for help

[Scott Seydor]

Hello Everyone:

I'm an architect and construction manager and want-to-be investor in the suburbs of Philadelphia, PA... specifically Montgomery County (Lansdale, Souderton, Harleysville, etc.). I'm interested in passive rental income from either BRRRs or move-in-ready properties - both single and small multi-family. In an ideal world, I'd like to retire in ~10 years with a steady stream of income. I'm working with an agent, watching the MLS on a daily basis, and have made offers on a handful of properties with no success (several second-place finishes, though). Like most places, prices seem to be pretty crazy here and finding deals that work are few and far between... or maybe I just don't know how to find them? In the meantime, I've been digesting everything I can (this forum, podcasts, books, youtube) in an effort to educate myself.

What can you tell a guy in my position who:

-  Knows the design and construction world inside and out,

-  Doesn't have funding issues for what he's trying to do,

-  Has the desire and drive to make it happen,

-  Can't find a deal in his market to save his life! 

Thanks in advance,

Scott

[Paul S.]

You're in too much of a hurry.  I would say, since you sound like you have some experience and aren't intimidated by doing some rehabbing. 

Start looking at the super crappy properties, stuff that smells really gross and has lots of issues.  Then make no-brainer offers.  LOTS of offers.  A handful of offers isn't enough.  Back in the day, I would call my realtor and make 20 offers at 50% below asking a week.  Just to see who was willing to come back and negotiate.  I had a rehab for sale all summer, I was amazed that I didn't get a single low ball offer (which I would have been willing to take).  The idea of "offending a seller" is completely ludicrous.

If your realtor doesn't like that, get a new realtor.  Realtors that deal with investors are completely different than regular realtors.  You shouldn't need someone that drives you around all day and manages the details of closing a deal.  You want lock box numbers so you can let yourself into those crappy houses, and you want someone willing to beat up a seller.

Learn the ins and outs of sheriff's sales.  They are fairly competitive at the moment but there are still deals to be had.

The books won't tell you this, generally, but learn the legal ins and outs of real estate.  You can make fantastic deals on real estate that has title issues such as messed up inheritances or piles of liens.  Then you get to cut your teeth on negotiating all those debts to make them go away.

Keep your ear to the ground.  Best deals I've ever gotten were through word of mouth.  Someone down the street is moving or getting divorced and just wants to sell out.  If you ever show up to something like that, bring a purchase agreement with you!  Negotiate a price, and have them sign it right then and there.  If you wait (it happens all the time) their uncle Fred tells them that night that they should up the price because "didn't you know its a hot real estate market?".

Lastly, learn how to negotiate terms.  Even if the price is a little higher than you want to pay, you can work your contingencies, or financing, or dates, or conditions of the property ect ect ect.