All Forum Posts by: Charlie Nghiem

@Joseph Gozlan makes a good point. Better efficiency in numbers. You have one roof to replace on a 30 unit vs the number of MFU spread around town. And sales price is a number based on income. I would add that as important as cap rates are for comparing properties, take a better look at income and COC returns. A small MFU can be a 20% cap with 15k in returns, but a larger one can be a 6% cap with 100k in returns. Which would you prefer?

Lot of good replies. I will say that that it's going to be hard to find the perfect deal when you competing with other experienced investors with MLS access that notifies them as soon as the deals hit the market. Do you have a realtor that can setup notifications for you? Definitely check out your local REIA and talk to other investors, and check out some of the topics they discuss. There is a meetup in my area next month where they talk about analyzing a deal in 10 mins, which might be useful in your situation. You make your own luck by putting yourself in the right position to receive it. You will find your deal as long as you are constantly putting in offers everyday. Be sure to tell everyone who you are and what you are trying to accomplish. Your next deal might also come in as a offmarket referral.

@Matt Turcutto Not entirely sure how it works in your area. Typically you go to the county clerk and go through the filings yourself to build your own eviction lists. These are public record, so if available, they can be viewed through online records through the county clerks website also.

Wanted to add that if you have limited funds and an absentee list of 2300, you might want to refine those lists to mail out to the best prospects. Out of the 2300, who has done an eviction in the last year? Who has more than 60% equity. And there may repetitions where you might be mailing out 20 letters to a single investor who owns 20 properties. That will cut your list down significantly.

Matt Turcutto I think your getting discouraged way too soon. I don't know if you have read the book "Real Estate Rehab Investing Bible" during your analysis period, but there is a good chapter in there about direct mail. One thing that sticks out is mailing campaigns run at least 6 months, doing a mailing once a month with each list. Which means you don't know if a campaign is bad, until you finish the campaign. Also, before you start a campaign, figure out your budget, and mail accordingly. If you have $1200 campaign budget, you have $200 /mo to spend on post cards or letters. It also looks like you want to change your focus after the second month. In a podcast with Sam Craven, I believe, he also did a campaign and got some good leads and changed something after month 2 and the calls stopped, so he changed it back and the calls came in again. Someone correct me if I'm wrong, but his regret was not running the campaign all the way, or tweaking it too much too soon. I also would add the point of doing direct mail is getting your mail piece in front of the right people at the right time. Someone who is distressed will see your letter every month, but not do anything until their circumstances change. That could be month 4, 6, or 11 of a campaign. I'm sure that there are way better experts here that can elaborate.

The answers I have heard are some owners simply want to retire and not have to deal with a property anymore. And some want to 1031 exchange into a more expensive property with better returns, or as you explained, want to unload all their properties. I don't see it as dumping bad properties off to "the next sucker". 

If its a mom and pop place then I would say they are probably ready to retire, move to the city there kids are at. If its a company/LLC, then they sell to get a return for their investors.

Your probably only a sucker if you don't due your due diligence and you have to replace a roof as soon as you purchase. If the numbers work, the deal is always good! Just my 2 cents. 

Patrick Philip Your like the Chuck Norris of property managers.

Thanks for the share. Will be reading your other earlier posts as wells. Looks like its filled with lots of info, as well as the book Blink. Looks like a useful and interesting read. Congrats!

Michael Le Thanks for clearing that up. Figured you have been in multi family for a while and have seen the ups and downs.

@Michael Le Thanks for clearing that up. I never even took that into consideration yet. Definitely still trying to learn the underwriting process and will add that to my calculations. Does the market follow the ups and downs of the SF homes or do commercial buildings follow their own cycle, or is it just randomly based on location and economy in your opinion?