What's the average locally?

Question

Hello all, The past week or two I've spent all my spare time listening to the BiggerPockets podcasts, currently I've made it up to the mid 60's. It has really helped me narrow down what I'm looking for! ... But then I look around and don't see anything anywhere close! So, is the 2% rule practically impossible right now? I see lots at what I perceive to be 1%-1.5%. Several years ago, after reading quite a tall stack of Kiyosaki branded books, i paid for a local investor to give me a private 2-3 (can't remember) course. I was 21-22 at the time probably, and unemployed. His advice was to become an apprentice for one of the construction trades. I just recently advanced to Mechanical Journeyman and am feeling ready to get into the market. Some creativity will be needed financially, but what's new? As he was teaching me, we looked at a house that would easily meet the 2% rule as I recall! But I don't see deals like that anymore? This got a bit long and rambling, but region specific is partly to interact with locals, right? If I never say anything, I can't interact with anybody. Thanks all Daniel

Jeff B. · Answer

Remember, they are only guidelines and your not a bad person if you go contrary :)

Mindy Jensen · Answer

@Daniel Jenkins, it depends on your market. In my market, I can't even find those 1% deals. More like .5 or .6 at best.

Curtis Yoder · Answer

In my experience I use the rules as guidelines. Rarely do I find a true 2% deal, they are out there but they are rare. Not as rare as Bigfoot or a Unicorn, more like a Lion. :) On a leveraged deal, I will only run numbers on a 15 year amortization. This makes the 2% deal even more difficult to find for me.So don't be discouraged if you find deals that don't check every single box. For instance, you may find a home in a great neighborhood with excellent schools that is a 1.25% deal. For me, I will trade off the immediate cash return for the future security of the location. A great neighborhood keeps your tenants in place and investment solid.Good luck to you, please share with the group your deal parameters when you do jump in.

Erica Bird · Answer

Just a thought, you can go to the HUD auction site, Homepath, to look for anything in your area. When they first list a property it is exclusively available for primary residence occupants before it is open to investors, so it that sense you have an advantage. I have not personally bid on the site before but there are lots of forum posts and interviews on the podcast about it you can look up. Some quirks to the process, such as the water may not be turned on for inspection, etc. Good luck!

Rhett Tullis · Answer

you can still hit 2% in mwc but you have to be patient. learn what you want and watch for the deals to come and jump on them right away when they do. they are not as easy to find as they once were here but they are still out there.

Victor S. · Answer

I haven't really seen many multis in MWC lately. Some do come up, but they're either north of Reno or just not up-to-par (my reqs). There are deals out there on SFRs, tho.

Jeff Filali · Answer

There are deals out there for sure in our great state of OklaHOMEa!! You just have to expand your search or work with others who are locating more then they can purchase themselves. Good luck and let me know if I can ever help in any way.

Daniel Jenkins · Answer

@Jon Nolen Thank you for the reply. It's good to hear that I'm not just blind. I'm thinking of focusing on Midwest City, but in my inexperience 1% just looks tight. And being a newlywed weighs heavily on reminding me that I also have to think a bit more about "security" of investing now. I live closer to Harrah than Jones, and want to house-hack. Currently I live under 1 mile from work, so the commute is blessedly short. While also living far enough out in the country that there's just less people. I don't really want to commute in to Oklahoma City to house-hack, much less some of the lower end areas. Which is where I'm finding multi-family that even remotely looks good financially with my limited deal identification skill.

Jon Nolen · Answer

@Daniel Jenkins I am by no means an expert - I've done a couple deals, but not many. So, take my thoughts for what you will. I'm not able to find anything in the 2% realm, but I also am not a wholesaler or use wholesaler techniques; advertising, sending out letters, etc. I would like to, but with my 9-5 I just don't have time. Agree with you about interacting. If you don't reach out, you certainly won't talk to anyone. If you can, try to make it to some of the REIAs or other meetings. Connections and networking can make a huge impact in the opportunities that are presented