Finding Deals that make sense

[Christopher Alan Rush]

Hi all, 

I took a break from looking at anything the last few months and see that nothings changed in the last year or so in terms of, not being able to make the numbers work for anything. Specifically for SFHs and 2 to 4 unit properties. I even experiment with what-if's, like if the purchase price was 10% lower or the rents were higher, or i factor in no property manager, etc. Even in those scenarios the numbers still suck (ie negative IRR and/or negative CoC).

I’ve mostly looked in the Anchorage and Fairbanks areas but occasionally I’ll get curious and look up some of the “really good markets” noted for having good appreciation and cash flow often mentioned here, like Columbus, KC, Austin, etc. i think every time I’ve ever searched Zillow for 2-4 unit rentals in those markets I’ve only ever received 0 results or, results where they’re $1M+ with very poor rental income relative to the price. I am curious how anyone actually finds any deals in that sort of climate? I have seen the driving for dollars , mail flyer campaign, behind on taxes search, abandoned property or senior citizen looking to sell etc ideas. But in those hot markets, aren’t all of the big institutional and foreign investor firms also doing that, as well as dozens if not hundreds of other smaller investors? You’d just be 1 more inquiry on top of dozens of others they’ve received?  I am genuinely curious as to how you’re able to pull off good deals in a world where so many people are willing to buy something even when the numbers show it’s an obviously poor investment.  If it were a good property, wouldn’t they just keep it, or, put it on the market at a very premium price in which case the numbers don’t seem to work if you’re trying to buy it?

Curious of others thoughts or any feedback. Maybe I am not looking in the right places? 

[Stephen Stokes]

@Christopher Alan Rush to find a good deal for you you need to look for a way that you can help a seller in ways that others (your competition) is unwilling or unable. For example, I am working to help pro-foreclosure situation to avoid foreclosure and complete a short sale when they are deeply under water (yes this exists and is quite prevalent in many fha home buyers still to this day). Remember that houses require a lot of upkeep as they actually depreciate and If not properly maintained many properties can be worth less even with land values increasing significantly. Small banks still make mistakes and over lend to investors and even retail home owners. The big guys are and have been pretty tight for past several years so those loans are usually right side up. People still fall behind on taxes every day and that can cause negative equity situations as well and can be found if the state you are looking into has public tax lien certificates or even just posts the delinquent properties online. Additionally, some sellers just prefer not to work with real estate agents and want to avoid commissions, don’t like working with big firms and want to do business with local buyers. Whatever the situation, you are likely looking for difficult situations where you can actually help solve a problem if you want to find good deals in this market. Whenever I am not able to create a win-win I know it is not a good deal. Looking at the mls listed properties in a everything bubble economy like we have right now is not going to do you justice in the long term. The alternative is that you sit on the sidelines and wait for the winds to shift in favor of buyers but timing the market can be a difficult task as patience is a virtue that many of us do not have the luxury. Look for ways that you yourself can add value in ways your competition is not and you will find that your investing will not only be profitable but also rewarding to yourself and to the community as a whole.