All Forum Posts by: Brian Adams

I wouldn't bother until you have MLS access.

Unlike other sources, you will have full access to critical information like the Agent-to-Agent remarks. You don't want to use a comp that had foundation problems only disclosed in the Private Remarks. There is a lot of critical information, and if the purpose is just "practice", then you would be practicing wrongly. IMO. 

There are a lot of brokers who source deals from the MLS. E.g. Entera in Houston. They analyze MLS deals and are one of the primary acquisition sources for institutional SFR like Invitation Homes.

With the market turning, they have cut headcount by something like 50% last I saw. 

Those are not wholesellers, obviously. They are licensed brokers who make their money on the commission, I assume. But they ARE your competition if trying to wholesale, unless it's a big flip. They tend to prefer stuff in decent condition and in their buy box. You can compete with riskier stuff outside common buy boxes and in tertiary markets.

If you aren't already licensed, is the plan to use a Realtor to make offers on your behalf, given it is already listed on the MLS, and then shop around for a buyer? You may have a hard time finding a Realtor willing to do that, and savvy listing agents are wary of any contracts that include "...or assignees" for the buyer's name.

There was a local investor meetup for Killeen, but I don't think they've met in a long time now. I guess it kind of petered out. Used to be a group or 6-15 folks or so. 

A lot of the buy-and-hold investors I worked with in the past in Killeen did fantastic. Bought for cash flow, got appreciation, and then exited with their winnings. 

Killeen is still a great market for rentals and flips, but not the same gold mine it was 10 years ago. That's true of every market now, I suppose, with interest rates and supply problems, until either prices go down or rents go up. Problem is knowing which of those two are going to happen before buying!

AVM models like House Canary and the Zillow Zestimate should be used very carefully. 

I worked for Zillow Offers. I'll always remember what one of the data scientists told us. "The Zestimate is accurate enough for about 80% of the buy box, and s***s the bed on the other 20%"

Is your home in the 80% or the 20%?

Zillow does have a Price my Rental Tool that allows you to manually review rental comps in the area, and I highly recommend it when setting prices. But I don't think there is, or will be for quite some time, an AI that can set prices on real estate well enough to be "automated" for at least another decade or more. 

It's not a red flag in the sense that they are doing their best, it sounds like, to make you fully aware of it. 

The title company will show you any liens on the property. You'll want to review what that amount is. If you are using a lender, I believe they would insist that it is paid off at closing so that you have a clear title. So, if the seller is unable to do it from their proceeds or something, then I would budget for that amount out of pocket if it is still a good deal at those terms? 

But I also want to add that I would speak to a local agent or even an attorney if you have questions, in case I am wrong, which happens often enough.

In my underwriting model, I would have to stretch every assumption to the most ridiculous breaking point in order to come up with a 10% CoC return even on a distressed asset.

I think a lot of investors you may be competing with are going to break even or even have negative cash flow initially on their buy and hold investments. The cash flow is usually much lower than the actual return on the asset. So an 8% IRR might have a negative cash flow of -3% in year 1, and it might take half a decade of NOI growth before the cash flow is even break even. And some investors will be happy with that return on what is a relatively low risk SFR asset they can exit to retail buyers.

If cash flow is the most important thing to you, then you may want to focus on things you can purchase all cash. You also would perhaps want to focus on value add investments that you can get at a discount but only need cosmetic repairs?

@Bruce Lynn

I had Unlock open, not NTREIS. Duh. I knew that didn't pass the sniff test. Thank you for the correction!

I'm a single family guy, but one part I know a little about is the underwriting. 

I don't think you need to know how to underwrite your own deals, but knowing what commercial underwriting looks like and the metrics mean would be a good place I would recommend starting. 

I would check out the YouTube channels:

https://www.youtube.com/@BreakIntoCRE

https://www.youtube.com/@tacticares

https://www.youtube.com/@adventuresincre

Wage growth HAS kept up with inflation, to my understanding. https://www.axios.com/2024/02/05/wages-outpacing-inflation

But I still think the market is soft and there is a lot of people wanting to sell who can't. Supply inching up. DOMs getting longer. Failed listings higher. 

I think prices still have room to fall and rents still have room to rise until we are at an equilibrium again. Maybe?

@Caleb Brake

I just published my DFW 2-4 family report for 2024 here on my Bigger Pockets blog. 

https://www.biggerpockets.com/member-blogs/10185/103320-dfw-...

Same as what @Bruce Lynn said, duplexes and fourplexes ARE very rare in DFW, at least compared to most other Texas markets. 

Fewer than 100 fourplexes sold on the MLS in the DFW MSA in 2023, a population of 6M people!

And none of them in Collin or Denton counties. 

Not sure if my MLS is broken or something crazy, but apparently ZERO duplexes OR fourplexes have sold in Collin in Denton counties in the past year.

I even checked in Cross Property Search to make sure these aren't being advertised in a different category. 

There may be some new construction duplex neighborhoods that are not in the MLS in N Dallas. But I am not aware of any myself.

So if you are looking to house hack in N Dallas, I would focus on a value add SFR you can get under market, perhaps.