Trying to purchase for years :)

[Abe B.]

Hi All,

I've been trying to purchase in RI (Providence, Pawtucket, Cranston, East Providence, etc.)  for years, and finally made 6 offers in the past few weeks - all beat out by cash offers :). 

My Realtor told me that I need to find off-market deals. This seems like an uphill battle - how would I even do this? Is it still possible to find >5% cap rates investment properties? 

Thanks!

[Luan Oliveira]

@Abe B. Are you looking at small multis or 5+ units?

I've purchased three 3-fam properties in the last three years all off the MLS and have been able to get a greater than 5% cap rate. And that's accounting for vacancy/repairs/capex/property management. In two of those cases, I had to offer close to 10% over asking to get the deal.

The rental demand out here is crazy. If you have a nice unit, you can command top rents even in the C/D neighborhoods. Renters are tired of seeing units that are in disrepair and where the landlords don't take care of the property. My most recent post for a 3 bedroom ($1650) garnered over 200 Facebook inquiries before I took down the listing. If I were you, I'd focus on nicer homes where a lot of the CAPEX has been done for you.

Don't always rely on the existing rents either. You have to be ready to ask the tenants to leave, then spruce up the units to get top rents (fresh paint and floors will make a world of difference). Alternatively, be ready to raise rents on existing tenants.