All Forum Posts by: Peter K.

It's the typical "chicken" or the "egg" situation. There are so many ways to secure proof of funds - it doesn't always have to be "cash" sitting in your checking account. Think funds you can back your offer with: HELOC, 401k funds, stocks/bond/CDs, HML, stock options you may have, etc.

Hey David,

I primarily deal with investors out of state looking in this area. Give me a ping!

Bumping this thread for others!

Hey Nick,

In this instance, it would be difficult (as a selling point) to buyer's since sellers cover buyer's agent commissions and there are many agents out there that are willing to work with buyers w/o any retainer fees and/or guarantee of payment. At the end of the day, you'll have to make the judgment call with your buyer-client to see if it's worth your time to work with them and have the potential to lose out on a commission if they don't close. Really comes down to your comfort level and judgement call.

- Absolutely, agree with your comments there Patrick. You have to be creative in this market to stay ahead of the pack. Definitely having a GC in-house helps. 

1- Absolutely agree that is the case for you & that is OK - we each have our own comfort level :)

2- I would elaborate to say "residential real estate is an easy game to play" = IF you know what you're doing (or find one/partner with one that does). I've seen individuals going into residential RE without the foundational knowledge and really put themself in a pit. But for the most part, if you've been in this space for some time, it's definitely not rocket science. I totally get why you or your partners may rationalize a mediocre deal - it's not worth your time. On the flip side, it may be worth it for someone else - so that's subjective to different individual(s). I agree overall returns on residential homes are not the rates we've seen in the past where we easily saw 20%+ CoC returns. But hey, at the end of the day, 5% ROI is better than 0% ROI in my eyes - especially if your cash is just sitting there losing value to inflation. Just my two cents. Ultimately, it comes down to individual's goals & their comfort level.

@Chris Martin - first off, love your in-depth analysis (and your analogy - ha!)

There are key things I agree:

- "Fish in a crowded favorite spot" analogy = Absolutely. As an investor, you have to stay on top of market trends and be agile. This not only applies to RE investing but applies to any investing.

- Every investor has a spectrum of risk appetite = I agree you sticking to your own discipline and wait to play the game on your terms. You have to stick with your strategy and what you're comfortable with. It may not be the case with everyone else, but you need to stick by your strategy.

- "Raleigh and central NC is a great place to invest. The market is stable and returns mirror inflation. But timing is everything" = Absolutely. There's still room for growth in this locale and I think more and more investors are looking in this market - which makes sense to me. Only time will tell - in the meantime, numbers don't lie.

I do want to brainstorm a bit on some other key points you've mentioned:

- Opportunity cost being too high = I get where you're coming from. Saturated market, high RE prices, etc., leads to lower yields to investors and they may have better opportunities investing elsewhere/another investment vehicle. Say, for example, an investor chose to go with the stock market with an avg 7-10% return annualized - they could potentially be getting a better deal than investing in RE - yes. But if you look at the total ROI (tax savings, appreciation, tax shelter strategies, recession-proof investment, etc.) - even with the deal returning lower than 7-10%, in the end, may come out in an investor's favor. Now, there are many other variables to consider (eviction moratorium, government regulations overall, etc.), so you really gotta look at the overall risk appetite you have as an investor. Thoughts?

- "Game is over in the Residential RE investing in this area" = I'd like to play devil's advocate and ask - if it's over here (in your opinion), wouldn't most other states be on par as well? There are markets across the country that fare "worse" than NC from market trends (think Arizona, Texas, Colorado, etc.) from an investor perspective. Prices can work both ways as well - infinity (and beyond) can work in upward swing OR downward, and there's no way to predict the future - so be it. I still do see plenty of opportunities if you craft your strategy appropriately. From my observations, I see many investors actually shift their strategy from residential multi-family (2-4) to SFH's. Some are faring quite well surprisingly enough. Ultimately, if the numbers make sense (for an individual/group), I don't see why not pull the trigger. Thoughts?

Right - you just have to look at the right places for the right deals. As saturated as the market is, there are always deals to be had.

Hey @Arn Cenedella -

It seems like you're on the right track (getting educated on different strategies, doing your research, and connecting with like-minded investors). 

I honestly feel the best way for new investors to get into Multi-family investments (residential 2-4) is to dive in and do a deal. Rather that is successful or not - you'll take away a whole lot of lessons doing that single deal. Everything afterwards will just snowball and you'll grow your portfolio. You've already done your research and analyzing deals in your locale - don't fall for the "analysis-paralysis" rollercoaster. You have the knowledge, now go out there and get a deal under your belt. 

This is coming from personal experience as an investor myself. Luckily my first duplex investment was a success with adequate cash flow & appreciation. But the best advice I took away was to commit and just do a deal - I've learned so much from that.

Hope that helps and good luck! 

P.S. I've done a deal in Greenville - North Carolina (seems like you're located in Greenville - South Carolina) - ha!

In my opinion, I'd say both. We have a shortage of inventory with sellers wanting to stay put & with $ being pumped into the economy by the government, people are willing to put more $ to beat out other competition. At scale, that's what we're seeing today.