All Forum Posts by: Jim Pellerin

I am so close to being ready to get my first wholesale deal. The only problem is I am struggling a lot to figure out if it is a good deal or not. I am looking at on-market properties. I feel like every time I see a potential house I have the repair price too high, but I could be off on my repair cost. Any tips for me? Thanks!

It's a numbers game. Look at 100 properties. Analyze 25. Put offers on 5. Close on 1.

Use the 70% rule to analyze and go from there.

1. Find comps in the area.
2. Calculate ARV based on comps
3. Take 70% of the ARV
4. Subtract the repair costs
5. Subtract your fee
6. The number left is your maximum allowable offer (MAO) and what you can offer the seller.

This number can be higher if you have a buyer that is buying and holding and not flipping. This is because they dont have any selling costs.

Use a free version of dealcheck and it will do all this for you. Also, Jerry Norton has some free tools in his flipping tools. This is different from his flipster software.

1 Vote

Quote from @Patrick Drury:

@Tay Lovett
I do a lot of cold calling to find off-market deals. The best part is it doesn't cost anything.

I think the question is, where do you find your properties to cold call.

3 Votes

Atlanta, Georgia

Quote from @Account Closed:

Hello everybody! Can anyone help me decide what would be a better option financially in the current market / with current interest rates. I have around 500k cash and would like to buy an investment property in South Florida area. I could buy a 3/2 SFH for cash or a multi-family (2lex, 4lex) for up to 1 Mio. and get it financed. The rate of return would be similar in both cases, but not quite sure if it is worth getting a multi-family and pay so much in interest (ca. 8%). Thank you so much in advance!

That doesn't make sense that the return is the same. Usually a leveraged property provides a much better return. Did you factor in appreciation?

For example, if you buy a $2m property with your $500k, and the property appreciates 10% over 5 years, the property is now worth $2.2M so the return on your $500k is $200k / $500k which is 40%.

If you paid $500k cash and the property appreciates 10%, that's only $50k and only 10% appreciate.

Then you factor in all the cash flows for the same period to get the total estimated return.

This is why people use IRR to figure out the total return. Excel has a built in IRR calculator.

And there are a lot of other benefits of multifamily.

0 Votes

Fort Lauderdale, Florida

What do you mean, " you have a property for sale".

Do you have an exclusive agreement with the seller?

0 Votes

New York City, New York

Check out dealcheck. I have had a lot of success finding comps for most properties. It's free.

1 Vote

Quote from @Tay Lovett:

How much do you spend on marketing to find off-market properties? If you are not marketing, how do you come across your off-market deals?

I did a post on this

https://www.biggerpockets.com/...

4 Votes

Atlanta, Georgia

Quote from @Tanner Weaver:

Hello BP community!

I’ve started learning about real estate investing about 2 years ago and I’ve struggled to get past the first step in getting started. I’ve been debating going small such as a single or duplex just to get my feet in the water but would like to get into small apartment complexes. Here’s what I’m working with and any advice for my situation would be much appreciated!

I’m 23 and live in Minnesota but travel working on the Pipline throughout the mid west most of the year so self managing I could see being difficult. I have 70k saved up and should have about 100k by the end of the year. I was late in building credit with a current credit score or 661.

What is it you would like to achieve? What are your goals?

0 Votes

Quote from @Chris Mierzwa:

My partner and I are looking to expand our rental portfolio in the greater Pittsburgh area with homes for sale in CASH. We have completed our latest cash-out refinance and are ready to buy again. Our portfolio consists of multi-family homes but would also consider single family homes if the price is right! - Chris

Just curious. Any reason why you would be considering SFHs? I would think you would be interested in larger multi-family bldgs. 10+ units for example.

0 Votes

Pittsburgh, Pennsylvania

Access to money is more important than the cost of money. But it depends on the impact to the cashflow of your deal.

1 Vote

Phoenix, Arizona

Quote from @Martin Herrera Jr:

Hey guys I got a 6 plex with 2 houses and 14 apartments for sale but I just wanted to hear yall's opinions on what's a good cap rate for multi family properties here in the Rio Grande Valley.

I always go here. https://apartmentloanstore.com...

2 Votes

Rio Grande Valley, Texas

All Forum Posts by: Jim Pellerin

Jim Pellerin has started 8 posts and replied 870 times.

Post: Figuring out if you have a good deal or not

Post: Off-Market Properties? How do you acquire them?

Post: Buy single-family home in cash or finance a multi-family property

Post: I have a $250m hotel for sale… how do I sell it

Post: How do you find comps in the country?

Post: Off-Market Properties? How do you acquire them?

Post: Newbie that’s in analysis paralysis

Post: Wholesalers & Fixer Uppers Wanted - Cash on Hand, Ready to Buy!

Post: Question about HELOCs

Post: What's a good cap rate for apartments/ multi family?