All Forum Posts by: Jason Thompson

For sfam high end purchase are you able to get rents that will pay back the piti and positive cash flow?

Quote from @Jason Thompson:

With so much speculation about the market and its direction, are you waiting on the sidelines, ready to pounce, or are you still pushing forward with conservative underwriting regardless of what the market does? 

 this market is extremely good for ............ high end SF primary purchase.

In many markets the prices have not declined enough to compensate for the rate increases for financed purchases.  From below 3% to 6.5% results in ~50% increase to the mortgage payment.  The effect of this is that for buy and hold, it is harder to find properties that provide a return that is better than more passive returns.

Note interest rates are less critical for short holds such as for a flip, but flippers have to be cognizant of potential RE price reduction  

We only do buy and hold.  Am I against buying?  No!   if you find a property that meets your return goal with conservative under writing, then purchase. If the rates fall enough to justify a refinance, this purchase could be a great purchase but do not under write expecting a rate decrease. 

I am being cautious and have high expectation on return (if return does not hit $1k/month I am disappointed so my expectation is lofty).  My last purchases were Dec 2021 (I purchased $4m of RE that month with good loan rates).  However I still look at my offerings from wholesalers, agents, etc and if one meets my criteria I would pursue it. 

In summary, just like always if you find a RE that projects a return that satisfies your minimum expectation then pursue the purchase.  

Good luck

I'm making offers, as I always have. I'm currently under contract on a commercial property that was priced stupid low and am also making offers on SF and MF. 

In my market SF/MF inventory still isn't high and so properties are still selling pretty well - multiple offers and prices really haven't dropped. 

I’ve bought 5 properties in the last 7 months. It’s all about “time in the market, not timing the market.” If it cash flows, then I’m interested. I don’t buy for appreciation. That will happen over time. As well as market rent. So I’m ok buying now, then holding for decades and letting my tenants pay off my properties.

Quote from @Jason Thompson:

With so much speculation about the market and its direction, are you waiting on the sidelines, ready to pounce, or are you still pushing forward with conservative underwriting regardless of what the market does? 

The only ones that make money on the sidelines are coaches :) Always deals. When buying at about all in 65% of the ARV, with 15% or better net caps, ( cash buys ) who cares about up or down 5- 10%

Good luck 

Quote from @Jason Thompson:

With so much speculation about the market and its direction, are you waiting on the sidelines, ready to pounce, or are you still pushing forward with conservative underwriting regardless of what the market does? 

It’s impossible to know what’s next, so I personally am sticking to our long term plan of continuing to acquire. However I'm
underwriting extra conservatively and holding more reserves. I personally believe sellers are more willing to offer credits now to help buy down your rate and you’re facing less competition (depending on market). Plus inventory is still low so I think when (hopefully) rates go down, the competition will be back and potentially drive up prices. Again who knows what happens but my biggest priority is moving forward and underwriting safely.