All Forum Posts by: Jonathan Makovsky

@Seyed Javaheriwelcome to BP. I'm not sure I understand the question so I will do my best to answer each part.

1. I need to be convinced that 70% formula works in most cases.

You should not want to be convinced. The 70% ARV (less repairs) is a guideline and it is a far cry from a "formula". It is there to help investors when other factors are not present. Happens to be it works many times, however, if you look at the extremes it will likely dispel any myths about it being formulaic. For example, if you are selling a house with an ARV of $10M, you will probably do okay if you go above 70%; and on the flip side, if you are selling a house with an ARV of $25K, I would probably advise that you don't want a razor thin 30% (or $7.5K) to pay off all of your other expenses (outside of fixing the home) and feel good about walking away with a profit. 

With that said, in our market of homes from $300K - $600K we will gladly buy 70% ARV (less repairs), we will even buy homes closer to 75% ARV (less repairs).

2. In my humble mind, how can you convince the seller to accept the offer since the listing price drop will be substantial.

Most of the time the seller will not sell at a steep discounted price. However, sometimes the seller needs help and if you can help solve their problems the price is not the only consideration they are thinking of. 

3. What is the maximum acceptable number?

I assume you are asking about the maximum offer you can make to a seller. [Assuming I understand your question correctly,] the max offer you should ever make to a seller for an investment property is the amount that if the seller were to accept your offer you can hit your minimum return you were looking to make. For example, if you would be happy with no less than a $5K return, then your max offer should reflect that you will not make less than $5K after completing the deal.

Hope this helps clarify some of your questions. Best of luck!

@Jose Martinezhope you can get the ball rolling soon. 

$10K is a nice start, but unless you can use that money for marketing to find more deals, it may not get you very far. Being that the $10K is not yours - and I don't know if your family members are okay with you trying to use that money for marketing - you will need to get shifty.

So my advice is to find a local investor that is doing deals and get involved in any way you can with her/him. Do at least one deal with that person and don't get caught up in how much money you're going to make. Your one focus should be completing a successful deal AND learning everything you can with that person.

Once you have experience, doors start to miraculously open and money will begin to appear in places you will least expect it. 

Happy investing and hope to see you get there.

@David Voznyukwelcome to the club and you're in the right place to learn.

Real estate is very local, so what is going on in one part of the country - or even within your own county - might be very different than another part of the country/county, so even if one area is crashing, another area might be booming.

My feeling is that if you're buying real estate with sound economics behind it, you can ride out many of the ebbs-and-flows that are inevitable in the real estate market. Whereas, if you buy based solely on speculation then you are at the market's mercy.

Hope you find your niche in real estate, there are so many ways to get involved! 

PS: Listen to the podcasts if you can: they're fun, enjoyable and will teach you a lot.

Hi @Account Closed, great to hear the feedback and glad you were inspired! You might want to post this on the show notes: https://www.biggerpockets.com/show124

Thanks @John Robyand @Anthony Zeolla. Please PM me with your email addresses and I will add you. Thanks and we're all looking forward to meeting you.

Reminder for this Wednesday's meet-up in Fairfield, CT.

For anyone that hasn't been to the meet-up yet, it is filled with experienced Connecticut investors, and if you are already invested in some of the CT counties (like Fairfield, New Haven, Hartford, Litchfield) or are thinking about getting in the game, I think you will benefit from coming.

Two housekeeping notes:

1. If you would like to be on the email list - please email me.

2. Please post below if you can make it. It helps to attract more great investors to the meet-up. Thanks.

@Natasha Streitzwelcome! 

Are you an attorney? Looking forward to seeing you around BP and possibly CT.

@Jason Natelle, either option works for the right person. Personally, I prefer to implement @Michael Noto's strategy for myself as we are invested in CT because I can gain an edge in this market - something that wouldn't be as easy for me at a distance.

Any thoughts on getting stainless steel (SS) vs black appliances for student rentals?

I was leaning more towards black appliances since it will (likely) be more aesthetically durable; especially considering that since it's a student population and we will likely not have one long-term tenant.

The flip side is that SS is popular and I think students will appreciate having SS (as long as it shows nice) and we might be able to squeeze a few extra rent dollars marketing the place.

Thanks in advance for your input.

@Amanda HanOrdered the book earlier today, and like you, I also started as a CPA at one of the Big 4. While it was a great experience, I never thought I would be excited about reading tax strategies on the weekend, until now!

Looking forward to it - thanks again.