All Forum Posts by: Robert Frazier

There is a narrative among real estate investors that they can go it alone and just need someone to do the paperwork when it comes to negotiating deals. Most deals I work, I find that the most inexperienced party in a real estate transaction will end up losing 4-10% of the value of the home in the transaction because they don't know what they are doing. 

This past week I helped two investor clients buy sfh for investments. One is a non-conforming duplex, the other is a flip with lot split-development opportunities. The non-conforming duplex was on the market for just $430k. A cash-flowing, large lot, alley loaded duplex that needed a new roof, painted and new floors. The agent listing the home has only done one deal. The house has been on the market for 26 days when we made an offer. 

My client and I settled on an offer of $405k with all contingencies in place (inspection, appraisal, financing). That is a 5.8% discount on the price. The listing agent and seller did not counter on price and went under contract at the offered price. My client would have been willing to pay up to the whole listed price because the property will be worth ~$525k ARV.

The inexperience doesn't stop there. After the initial inspection we sent a response to the inspection asking for $21,500 in seller credits to cover the roof and furnace (both needed replaced).  The listing agent did respond with a counter on this amount and offered $15,000 in seller credits. But my client would have moved forward with the deal for as little as $5-10k in concessions. 

The seller will end up with $35,000 less because the agent did not understand the market or the process of selling. That is an 8% expense for inexperience. 

An experienced agent would have worked with the seller to do the repairs before they sold, and captured the forced equity in the sale. If the seller would have spent $10k for a new roof, $8k in paint, $7k in flooring and $5k for a furnace they could have sold the house for $120k more. a $30k investment for $120k higher sales price. I've even seen agents that will finance repairs with a lien to maximize sales price for their seller.

Who you work with matters and will mean the difference between a quality BRRR that cashflows or a property that doesn't work.

I love to talk real estate. Tell me your favorite deal that you negotiated and where you found it.

Looking at our situation locally here in Southwest Idaho (Boise Metro), we might be in a once in a generation perfect moment for new projects to develop and single/small-multi rentals.

When you look at the next couple of months:

-we have a higher inventory than we've seen in a while (up 12% yoy)
-alot of buyers waiting on the sidelines for lower interest rates
-housing starts are down 60% over the last 2 years as interest rates cut MFA permits by 93%
-growth to medium sized cities has continued post covid with an average of 25000 people moving to our valley every year
-Steep income growth (Idaho has the 4th fastest growing family incomes in the country) from $69k to $91k in 3 years.
-Re-zoning Boise with +/-50% increase in density
-Stock market returns have soured since the election and the turmoil of a Trump presidency is keeping investors on the sidelines.

What I am telling my clients is that before the spring rush this year, January and February may be the best possible time to buy in a long time.

We are looking for small multi-family opportunities, infill lots and financial partners to create housing and take advantage of this timing opportunity. 

What are you looking for in 2025? Where do you see opportunities in your local markets? 

Now it is postponed again. Texas Federal circuit is drunk this holiday season.

 Welcome to the community. Let's connect.

Nice work Zach. Hoping you find a partner.

 Welcome to BP! Let's connect.

 For vertical we're getting 120-135

 GC's have been great. Helpful and knowledgable. 

Our new permitting/entitlement company is killing it on our second project. 

 We're doing multi-family redevelopment and the architect is taking 6 months with constant hounding to respond to notes from the plan reviewer. It's not unreasonable expectations.