MLS searching seems non productive

[Scott Harper]

There are not as many posts from central Florida here, so I thought I would write one. I am sure my comments will be relevant to many area as well. I ask for thoughts on this paradox and  how do mls buyers overcome it to get cash flow or flip advantage?

if a seller lists their house with an agent, that agent pulls comps and determines a price point. The agent can make it competitive ,below market (hoping for bid up),or slightly high in hopes of lucky sale. Regardless, they have priced it according to the condition and repairs or upgrades needed. In my area $120.00 p/sq/ft  in (A) location or $100.00 or less in c/d location,if needing minor rehab to live in or rent and $145.00 for a completely remodled home that will go to only retail buyer. in A/B location.

If a house is listed for the amount, relative to the condition, it will sell within about 60 days. The problem is that they wont cash flow at that pricefor investment. So, an investor needs to get it for much less to be worthy of investment. Appreciation right now is just a little better than inflation. I will give an example of an analysis on a current listing that is very similar to one of my other properties that I have owned for 12 years.

10 days on market 3/2 block, 1600 sq feet listed $198,000 the rental market is good, close to schools .Rent $1300 to 1495.00. Other homes similar for rent now but not many. Rehab 5000.00, closing cost 3000.00 prop tax 240.00 lawn 160.00 month, vac, cap ex 150.. Month, insurance 125.00 cash mgmt 140.00 investment with dwn about 40k.  Pmt p/i about 650.00. with the 20 percent down.

A good price for investor would be more like 150 to 160k. However, it has been on the market 10 days. Why would a qualified agent even suggest accepting an offer like that when they know it will likely sell within 60 days for not less than 185,000. So, for buy and hold it seems almost impossible to find worthy, local ,wise investment on mls. I am sure there are some outliers and rhabbers can make money on streamlining rehab costs but for buy and hold it is like panning for gold in a river with one nugget.  I did make a  cash offer on another mls listing last week on a  run down manufactured home on property listed at 119k I made 80k cash offer and was told that the  seller had already declined 105k cash offer. That property would not produce good return at 105k hardly much at 80k

[RJ Reynolds]

In a sellers market where these conditions exist, there avenues other than MLS to go after. You want the discounted properties and they aren't going to make it to MLS much of the time.

Define your geographical area of interest and drive the neighborhood(s) frequently looking for the house that isn't being maintained.

Use a service that can give you home owner info such as age and length of ownership in your target neighborhood, Introduce yourself to those who haven't made the decision to sell yet and may be ready if they can get out easy. 

Then the typical tax delinquent or behind in mortgage crowd where public records searches show a home owner may be in financial distress, offer to solve their problem.

and of course... the obituaries.. 

Just some thoughts...