All Forum Posts by: Syed H.

Honestly even though you might have a case with your appraisal issue. 

$650k is a bad price for a 3 unit in that area. I'm not saying there aren't some comps to support it, but realize that your are comping against people who don't know what they are doing a lot of times. You think you are buying a 7.25 cap, but unless you own 20+ units in the area and know the exact expenses, id bet your not buying a 7.25 cap. Don't listen to sellers and agents. Sellers never tell you the full picture and agents don't know the exact numbers of running these kinds of property. Newark is not an easy place to operate. 

Just because something comps, doesn't mean it's a good purchase. I wouldn't pay the prices my buildings have appraised at. 

This. 

Sounds like a horrible idea IMO unless you do it at scale (which is also a crap idea to me). Unless you are just a financial investor in an experienced flipper. That's not flipping though.

This is why I love you Jay. Everyone talks about cash flow like it’s guaranteed. Cash flow is one of the hardest things to predict. 

The only thing that saves your *** in a downturn is 3 things: low leverage, non-recourse debt, and cash (either from reserves or other income). 

There will always be incompetent owners.  Plenty of people lost their investment homes the past 5 years during this amazing run we’ve had. I’ve bought more than a few where the owners have sold at a loss to me. 

Also, let’s not forget, distress creates a lot of value for a lot of opportunistic investors. The aftermath of the GFC made a lot of people a lot of money as well. 

When the foreclosure moratorium is over, there will be a flood of houses coming up for auction/short sales. 

Every day right here. 

People forget to see the other side of this moratorium coin. 

First, My rents have gone up more in the past 9 months than any other period of ownership in the pay 9 years I’ve owned rentals. No evictions = no supply = extremely low vacancy rates = increased rent prices. 

Second, cash out Refis have been easier because comps have sky rocketed. 

The key is to still find deals that you would have pre-covid. It's gotten much harder, I'm definitely buying less, but I'm still buying near my old numbers. & make sure you have some damn reserves and a reasonable DSCR. The idiots that preach max leverage, $0 out of pocket, blah blah blah, are the guys who don't own anymore RE after a recession.

Zoning office, but honestly most buildings won’t qualify to be converted to a MF unit. The city does not want more MF units Bc there is a parking shortage.

It's just a lack of inventory. Theres no distress in the market. The natural level of distress is gone. No foreclosures. No short sales; etc. 

I think we lose this Covid bump eventually and go back to pre-covid pricing, but I don't think it's a massive bubble that will drop below pre-covid pricing.

Also in many of the markets that I've invested, while prices have gone up 40-60% in the past few years, rents have also gone up between 20-25%. 

Congrats! I own 60 units in center city. If you ever need help, feel free to reach out

I think you deal with some crappy agents if your agents are making less than your wholesalers. So i can see why you think agents are mad. I know plenty of great agents who also wholesale. Wholesaling is only one way to sell real estate. Agents have multiple other revenue streams. 

Getting a license is simple. In many states, wholesaling is illegal without a license. So agents are mad in those states because you are doing something illegal. You don’t have the same fiduciary obligations as an agent does (not saying all agents actually meet those obligations either). So many unscrupulous wholesalers will essentially rob an old grandma for their own enrichment. Ive seen this happen before. Most people don’t get caught, but some do. You just better hope your not the one who gets caught. Ive seen whole transactions reversed. Trust me, it’s a nightmare.

The point isn’t that you shouldn’t wholesale. The point is there is a legal and ethical way to do it, that’s all.