Leads in the mls in my market

[Kevin Pereira]

Looking at 3 families in my area. The list price does not match the rents. I understand the market for 3 families is higher, but it’s crazy. I’m not sure it will even appraise for that much, will only find out until I take several steps forward, and I’m running into existing tenants paying well below market price for rent. Seems like these landlords are trying to cash out in this market. I’m going to keep analyzing, and putting in offers that make sense to me. Any advice on any other strategy???

[Russell Gronsky]

Not much advice to give, @Kevin Pereira. Everyone is in this boat right now when they look at the MLS. This is a good lesson for your REI future. You know you're near the top of the market when people are willing to buy on projected pro formas rather than actuals. Don't let this discourage you. Keep analyzing deals, keep making offers that only make sense to you. Today, you'll probably not hit much but once the correction comes (no one knows when it will, but rest 100% assured, that it will most definitely come) , all these people buying off projected numbers will be the first ones putting these properties on the market at hefty discount just to get out from underneath the liability.

Most people who are in it today, got into the RE game AFTER the 2008 crash. So they have only seen the bull run of the market. They haven't seen the side where your projected rent/value increases never happen, and instead, you have tenants moving out mid-month due to job loss and it takes you 6 months to find another tenant, only to have them do the same thing 4 months later. The guys who poured every penny into a deal based off projected earnings, making $100 a month per door today, won't be able to weather the storm once they wipe out 3-5 YEARS of earnings off a single 6-month vacancy. And guess what....those mortgage payments are still due, every month! 

Be patient, save cash and be ready when these deals start popping up.