All Forum Posts by: Anna Sam

Hello Everyone 

I am Working on our goals for the next 12 weeks in order to come up with strategies and a market to buy properties in. I am located in Florida and own some smaller multi family properties here. But market is super hot still in Florida and not seeing too many deals on MLS. I have not yet started marketing anywhere else yet considering the very high prices.

I wanted to ask for market suggestions where there is good cashflow. Open to NC,GA, SC and TN. Looked on MLS for some GA and NC properties but prices still high and no positive cashflow. I would be an out of state investor and would need a good property management company too if I buy outside Florida.

Please share your thoughts.

Quote from @Jason Malabute:

It is more important than ever to underwrite deals conservatively and stick to your numbers in today's market. The federal government printed so much stimulus money that society is paying the price of inflation. With so much money floating around in the marketplace, people are looking for assets to invest in. People buy stocks, crypto, and real estate without properly evaluating the deal. “Investors” are looking to park their money in assets and most times are overpaying.

I am looking at C vintage properties B and C+ neighborhoods in Indianapolis and KC. We can push up the rents to $800-900 after rehabbing the units. It will cost $12k per unit to raise the rents to $800-900. My underwriting shows I can pay $40-60k per unit. I submitted a few offers and every time, the seller laughed at me and said they had offers for $100-120k per unit. Sellers have told me I should use a 5% vacancy and 5% operating expenses ratio (this is not a typo) to make deals work. Other investors have suggested using unrealistic rent growths or rent projections for future years to make the numbers work. I’m here to tell you not to do it. Stick to the rules of conservatism. Being conservative means using data that is probable. Remember that real estate is cyclical, and there will be a day when the market will punish those that disobeyed the fundamentals of investing.

Even I doubted myself. After being rejected deal after deal, I questioned whether I was too conservative in my underwriting. I stopped doubting myself after I got off the phone with several more experienced investors, and even they said my underwriting was not the problem and they don’t know how other sponsors are making the numbers work. My advice is to trust the process and not let society pressure you into a bad deal. Remember these two mottos:

• “Men lie, women lie, accurate numbers don’t”
• “Be fearful when others are greedy. Be greedy when others are fearful”

Awesome post Jason. Having similar experience in a few markets I am looking at as well. i was close to making an offer on a property last week. Tried few different ways to even come up with an offer where it cashflows But unless they reduce price by 30 k to 40 k per unit didnt see any cashflow on that deal. Mostly money out of my pocket. 🙂
Have seen few crazy boom / bust cycles in a few markets. Hence decided to keep looking.. 

Hello BP friends

I am currently looking for smaller Multi family opportunities in a few states and for the most part seeing very high prices per unit. On the one hand I feel like its better to wait for a correction and on the other want to leverage best opportunities that are currently available at the current prices. 

It seems smart to wait for a correction but in these crazy times not sure how many more years to wait for it and lose precious time.

Its sometimes hard to find too many cash flowing properties at this time . Any of you in the same boat and wondering about it. Kindly share your thoughts. 

Kindly share best ways to assess sec 8 rental rates . Trying to look at some new areas and wanted to get a feel for the rents. Thanks

Congrats! You cant beat 0%. LOL... 

Hi

I need to find a good Insurance Broker or agent who is competent and give me some good quotes. Please share any good suggestions on the best ways to find a good insurance Broker for my Rental multi family properties.

Thanks

Hi

I am pondering how I can reduce the unreasonable expenses spent on my property and I see that there a many calls from my tenants every month . I try to be a good landlord and fix up and/or replace and try to pest control every quarter or so.

But feel that every time a plumber, A/c guy stops by it starts eating into my cashflow. $75 to 100$ a pop.

So looking for ways to cut down on the calls. 

Would it be a good idea to pass the first $50 to the tenant in case they called for any maintenance?

Please share any suggestions regarding how you are handling similar issues and keeping the properties cashflowing.

Thanks

Originally posted by @Nick L.:

How many units are in the complex? Would you have a majority share? 

I have the same concerns as @Jamal Okon. If you (and perhaps other investors) own enough units to control the HOA, it might be a good deal. If you are at the mercy of a regular homeowner-controlled HOA I would be much more skeptical.

 Hello Nick

I am going to start looking into the condo HOA details and will keep you all posted.

Thanks

Originally posted by @Gerald Harris:

What are expenses? Taxes? 

Fully occupied?   Vacancy? 

looks like a solid deal as long as the numbers work.   

Can the seller do less down and carry for  longer period?   So you can keep as much in pocket.   Get as low a monthly payment as possible.   

Let us know how it goes.  

 Hello Gerald

My cashflow number mentioned is after expenses. Fully occupied.

Thanks

Originally posted by @Marko Cvetkovic:

HOA?

 Hi Marko

Yes there is HOA but it covers outside maintenance, roof etc.