All Forum Posts by: Fallon Gilbert

... and, of course, avoid HOAs where ever possible. No one but the owner should assert control over a property.

My $0.02 ...

Exactly what Joe said! Is it plausible to self manage? That would save you 10%...just a thought!

@Fallon Gilbert

Nope there's nothing wrong with your numbers but there's 2 things that are wrong. 1 the number of deals you're analyzing. It needs to be more, obviously because you haven't found a deal yet. Analyze 100 units, find 10 that are deals and drill down into them you'll find 3 that you'll want to offer on and you may get 1. Also when I analyze deals I do the 2% rule. It's just a quick analysis. Property seller wants $50k for their unit and it will yield $1000 in rent. That's 2% return. I'm doing that deal. I then drill down into the real numbers T12 all insurances, class taxes etc and offer if it's a deal or pass when it's not. I can analyze hundreds of deals a day. 2 where are you finding these properties? If you go looking where everyone else is looking then there is a lot of competition. Go where no one is looking and you turn into a big fish in a small pond. So you go direct to the seller then you can talk one on one and get the best deal for both parties. Cut out any middle men that can inflate the price. Don't let anyone tell you that these deals aren't out there because there are and their wrong. Many people on here do them everyday but they're not bragging about it. You're just going to have to work for it.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $260,000
Cash invested: $17,000

This is my first investment property which is a duplex.

What made you interested in investing in this type of deal?

House hacking which will open up doors to become financially free.

How did you find this deal and how did you negotiate it?

I found this deal on Zillow and I wasn’t very aggressive with my negotiations but I did get the price down 20k.

Lessons learned? Challenges?

Run my numbers and to actually walk to property with a purpose, also I got the first time jitters out of me!

Two things about this.

First, in general MOST properties aren't going to be good rentals. The life of the investor is a life of searching through all of the bad deals and opportunities to find good ones. Even the very best have this problem, so don't lose hope there. As you get better, you'll start to develop a better understanding for what's a good or bad deal without having to go through a whole analysis. 

Second, with debt as expensive as it is and values as high as they are, even MORE properties are going to have trouble making the cash flow work. Interest rates are so high that a lot of deals aren't going to look very good. Seller financing may not even help you that much, as the seller will likely demand an even higher interest rate than the bank will. 

It's just a tough time to make deals work and if you're going to find good deals you have to be prepared to search hard for them. 

...and that should be fine. The goal is to make money, not just buy properties. The two greatest attributes a REI must have are discipline and patience.

That's where this website comes in handy. I've had several OOS investors each out to me with questions on my local market. Try searching on BP for investors local to the area you're looking at, find one that's fairly active on the website, and then send them a message. If they don't respond, oh well. If they do, then great!  

I'd suggest finding a local investor to sit down with and chat about this. Show them exactly how you're running numbers and they'll tell you if you're missing anything. I had the exact same thoughts before buying my first deal, but after analyzing a bunch, I've come to realize that my numbers aren't wrong and most properties in my area just won't work out for me. 

If your numbers are right, and if you want to buy a property soon, you have to pivot your strategy or you might end up waiting for a very long time. 

That's not uncommon right now.  With interest rates where they are, it's difficult to find properties that look good on paper from day one.  Keep searching and eventually, something will pop up!