Where Are The Deals!?

[Selina Giarla]

I'll start here... I have 8 doors. I have been involved in many facets of real estate. I am not a newbie but my portfolio is small and I am eager to grow it fast. I like to stick with 2-4 unit properties so I don't need a commercial loan, and I don't have a ton of cash in the event of a massive vacancy or capital investment, so more expensive isn't necessarily in my wheelhouse. I recently started out of state investing in Texas. Since I am out of state, I like to avoid the uncertainty of older home and prefer new builds or houses that are within 10 years old, max. I prefer Texas because it's a landlord friendly state, there is no state income tax so I don't need to file taxes in TX and MA (where I am from), the tenant's pay for a lot of the repairs, maintenance, etc. and there are no snow removal costs. Construction/Labor is cheap and its a growing state with respect to population, and lack of available housing.

All this being said...I CANNOT find a good deal. The houses are expensive, the rents haven't caught up, the int rates are through the roof, and the rent alone cannot even cover the operating expenses and debt service, nevermind turn a profit. Even if I go up to 50% equity, and zero out my vacancy factor, cost to lease, R&M and CapEx underwriting, I barely turn a profit (a few hundred a month). I want find a deal and put in an offer within the next 2 months. How are you all finding anything that makes sense?!

[John Clark]

The proper translation of “I cannot find a good deal” is “I cannot find people stupid enough to leave money on the table.”

The proper response to that is: “Why should they?”

That leads you to the answer: What are you doing to find motivated sellers — people who are willing to leave some money on the table in order to resolve some personal problem or situation?

There are two parties to every sale, and the sale is a zero sum event — every dollar you keep the seller doesn’t get. What are you doing to find motivated sellers who have the houses you want to buy?