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?!

[Bob Stevens]

Quote from @Matthew Paul:

You cant find a deal ?  Why , because EVERYBODY is out there looking for the deals . You have regular home buyers who will pay more , you have investors that have different visions on what a deal is . You have sellers who know what their property is worth and have no reason to discount since they get offers over asking . There is a ton of owners sitting pretty on rates 3.5% and less that wont be selling for a long time . 

That leaves very little inventory , which keeps prices high . 

 Its ALL about your network. I got 4 props under contract last week. All will have about 20% net caps based on cash purchase. I am going to contract today on a 2 br, for all in 50k,(value about 95k) rented for 1k, not to shabby.

All the best 

[Bob Stevens]

Quote from @Jahangir Hasanov:

Quote from @Bob Stevens:

Quote from @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?!

 Go out of state. I know dozens that live overseas and all across America, including me and do all their business in the Midwest Double digit net caps are the norm. I get deals sent to me daily. I just locked up 7 more SF all will have about 15% or better net caps. 

All the best 

Hi Bob. I’m looking to buy in Cleveland can you suggest any recommendation's, good realtors or wholesalers? Thank you in advance 

 Realtors, I never use them, they do not have the deals.

[David Avery]

Get a bunch of wholesalers throwing you deals 1 hour before they send it to the rest of the investor. 

Realtors can also find a great deal once in a while. 

I  would receive Texas. 

[Matthew Paul]

Quote from @Bob Stevens:

Quote from @Matthew Paul:

You cant find a deal ?  Why , because EVERYBODY is out there looking for the deals . You have regular home buyers who will pay more , you have investors that have different visions on what a deal is . You have sellers who know what their property is worth and have no reason to discount since they get offers over asking . There is a ton of owners sitting pretty on rates 3.5% and less that wont be selling for a long time . 

That leaves very little inventory , which keeps prices high . 

 Its ALL about your network. I got 4 props under contract last week. All will have about 20% net caps based on cash purchase. I am going to contract today on a 2 br, for all in 50k,(value about 95k) rented for 1k, not to shabby.

All the best 

 Havent seen a $50K house or even a $100K house in my county in 20 years .  A 2/1 in a decent area that needs work starts at $275K 

[Bob Stevens]

Quote from @Matthew Paul:

Quote from @Bob Stevens:

Quote from @Matthew Paul:

You cant find a deal ?  Why , because EVERYBODY is out there looking for the deals . You have regular home buyers who will pay more , you have investors that have different visions on what a deal is . You have sellers who know what their property is worth and have no reason to discount since they get offers over asking . There is a ton of owners sitting pretty on rates 3.5% and less that wont be selling for a long time . 

That leaves very little inventory , which keeps prices high . 

 Its ALL about your network. I got 4 props under contract last week. All will have about 20% net caps based on cash purchase. I am going to contract today on a 2 br, for all in 50k,(value about 95k) rented for 1k, not to shabby.

All the best 

 Havent seen a $50K house or even a $100K house in my county in 20 years .  A 2/1 in a decent area that needs work starts at $275K 

That is why investors from around the world invest in the Mid-west 

[Andrew Syrios]

Quote from @Bob Stevens:

Quote from @Matthew Paul:

Quote from @Bob Stevens:

Quote from @Matthew Paul:

You cant find a deal ?  Why , because EVERYBODY is out there looking for the deals . You have regular home buyers who will pay more , you have investors that have different visions on what a deal is . You have sellers who know what their property is worth and have no reason to discount since they get offers over asking . There is a ton of owners sitting pretty on rates 3.5% and less that wont be selling for a long time . 

That leaves very little inventory , which keeps prices high . 

 Its ALL about your network. I got 4 props under contract last week. All will have about 20% net caps based on cash purchase. I am going to contract today on a 2 br, for all in 50k,(value about 95k) rented for 1k, not to shabby.

All the best 

 Havent seen a $50K house or even a $100K house in my county in 20 years .  A 2/1 in a decent area that needs work starts at $275K 

That is why investors from around the world invest in the Mid-west 

 Even in the Midwest I very rarely see houses that cheap that aren't bulldozer bait

[Bob Stevens]

Quote from @Andrew Syrios:

Quote from @Bob Stevens:

Quote from @Matthew Paul:

Quote from @Bob Stevens:

Quote from @Matthew Paul:

You cant find a deal ?  Why , because EVERYBODY is out there looking for the deals . You have regular home buyers who will pay more , you have investors that have different visions on what a deal is . You have sellers who know what their property is worth and have no reason to discount since they get offers over asking . There is a ton of owners sitting pretty on rates 3.5% and less that wont be selling for a long time . 

That leaves very little inventory , which keeps prices high . 

 Its ALL about your network. I got 4 props under contract last week. All will have about 20% net caps based on cash purchase. I am going to contract today on a 2 br, for all in 50k,(value about 95k) rented for 1k, not to shabby.

All the best 

 Havent seen a $50K house or even a $100K house in my county in 20 years .  A 2/1 in a decent area that needs work starts at $275K 

That is why investors from around the world invest in the Mid-west 

 Even in the Midwest I very rarely see houses that cheap that aren't bulldozer bait

 Well, it only needs 10k in reno, If that. The duplex I just got I am putting in 10k just for preventive maintenance making my all-in price 90k, with 20k in rent. It has sec 8 so its all nice.  Its all about knowledge and your network. 

All the best 

[Andrew Syrios]

Quote from @Bob Stevens:

Quote from @Andrew Syrios:

Quote from @Bob Stevens:

Quote from @Matthew Paul:

Quote from @Bob Stevens:

Quote from @Matthew Paul:

You cant find a deal ?  Why , because EVERYBODY is out there looking for the deals . You have regular home buyers who will pay more , you have investors that have different visions on what a deal is . You have sellers who know what their property is worth and have no reason to discount since they get offers over asking . There is a ton of owners sitting pretty on rates 3.5% and less that wont be selling for a long time . 

That leaves very little inventory , which keeps prices high . 

 Its ALL about your network. I got 4 props under contract last week. All will have about 20% net caps based on cash purchase. I am going to contract today on a 2 br, for all in 50k,(value about 95k) rented for 1k, not to shabby.

All the best 

 Havent seen a $50K house or even a $100K house in my county in 20 years .  A 2/1 in a decent area that needs work starts at $275K 

That is why investors from around the world invest in the Mid-west 

 Even in the Midwest I very rarely see houses that cheap that aren't bulldozer bait

 Well, it only needs 10k in reno, If that. The duplex I just got I am putting in 10k just for preventive maintenance making my all-in price 90k, with 20k in rent. It has sec 8 so its all nice.  Its all about knowledge and your network. 

All the best 

 That sounds like a great deal, at least from a cash flow perspective

[Bob Stevens]

Quote from @Andrew Syrios:

Quote from @Bob Stevens:

Quote from @Andrew Syrios:

Quote from @Bob Stevens:

Quote from @Matthew Paul:

Quote from @Bob Stevens:

Quote from @Matthew Paul:

You cant find a deal ?  Why , because EVERYBODY is out there looking for the deals . You have regular home buyers who will pay more , you have investors that have different visions on what a deal is . You have sellers who know what their property is worth and have no reason to discount since they get offers over asking . There is a ton of owners sitting pretty on rates 3.5% and less that wont be selling for a long time . 

That leaves very little inventory , which keeps prices high . 

 Its ALL about your network. I got 4 props under contract last week. All will have about 20% net caps based on cash purchase. I am going to contract today on a 2 br, for all in 50k,(value about 95k) rented for 1k, not to shabby.

All the best 

 Havent seen a $50K house or even a $100K house in my county in 20 years .  A 2/1 in a decent area that needs work starts at $275K 

That is why investors from around the world invest in the Mid-west 

 Even in the Midwest I very rarely see houses that cheap that aren't bulldozer bait

 Well, it only needs 10k in reno, If that. The duplex I just got I am putting in 10k just for preventive maintenance making my all-in price 90k, with 20k in rent. It has sec 8 so its all nice.  Its all about knowledge and your network. 

All the best 

 That sounds like a great deal, at least from a cash flow perspective

They are all great deals from any perspective :) . Closing this week on a 3/2 all in 85k, rented for 1300, value about 115- 120k, 

[Andrew Syrios]

Well, if you could only resell the house for $25,000, it wouldn't be a good deal from an ARV perspective. Since I don't know the ARV, I only commented on the cash flow.

[Lindsay Davis]

@Selina Giarla,

Seconding @Matthew Paul and @Patrick Parry's comments about the ongoing inventory and new construction shortage. These supply issues mean that homes in coastal states and other expensive areas are going to appreciate quickly, though as you’ve found, they’ll also be chronically cash flow negative.

Also, as Patrick said, I think looking into states like Alabama might be your best bet, especially if you're trying to invest in new construction homes (which are generally pricier than older housing stock) at 80% LTV.

Plus, the state roughly meets your criteria: it’s a landlord-friendly place, property taxes average under 0.40%, and there’s not a lot of snow in Alabama—Birmingham, for example, gets just an inch or two of it per year.