I have cash to buy, now what?

Question

Hi all,

I'm really willing and able to buy SFH or MFH, STR properties (assuming the deal is right) and have been for the past couple of years. I was able to scoop up a nice STR which has decent cashflow. I am a real estate sales person in CT, but also own some homes. Just sold a home after $150k renovation and pulled a 4.5x on capex investment the investment. I analyze 20-30 homes (on paper) every couple of weeks to see if I can make sense of them. I know it is not the best time to buy and it will be challenging to find the right deals but I wonder if i am just being to over analytical? I have cash, plus great portfolio lender willing to lend, my own team for property management, construction etc. Additionally I have been taking into consideration partnerships to buy larger parcels in the north east as well.

Any thoughts?

Nathan Gesner · Answer

Too many investors are running numbers trying to eek out another small percentage of a return. You probably passed up dozens or hundreds of deals in the past two years that would have generated some serious returns . . . if you had acted.

I know people that analyze with spreadsheets and pass on deals because their data tells them it's not a "good enough" investment. Someone else buys those same properties and makes a killing. Real estate is a very forgiving investment to the one that holds on.

Another thought: get out of the market. You should know the market well enough to know what it takes to make a deal, so go out and find the deal instead of waiting or it to show up on the MLS. If you want a brick fourplex with 1:12 roof, shared laundry room, off-street parking, and a live oak tree in the back yard, start spreading the word to everyone and their brother that this is what you're looking for. Tell everyone, all the time. Make business cards and pass them out to everyone, all the time. Someone will hear of something and bring it to you.

Drive for dollars. If you don't know what it is, search BP or Google. Direct mail marketing. Try different markets than your own. There are lots of options to get creative and find what you're looking for instead of sitting behind a computer crunching data. I have 33 units and I found all of them off-market and purchased them below market value.

John Schiaroli · Answer

Thank you @Samuel Eddinger I'd welcome a conversation. Thank you

Samuel Eddinger · Answer

@John Schiaroli - In this game, you are either deal limited or cash limited. In this case, you cannot find a deal so you are deal limited. You have two options, lower your CAP rate or cash on cash threshold, or change what you invest in that will meet your threshold.

I own a PM company and 21 income properties and have become deal limited. I choose to expand my search to commercial properties and now I have additional opportunities again. I can also choose to expand where I will buy. I am investing in some flips. This has again made me cash limited.

I live in CT and invest exclusively in CT. Happy to have a phone call if interested.

Drew Sygit · Answer

@John Schiaroli start networking to find motivated sellers BEFORE they get to a real estate agent!

John Schiaroli · Answer

Bill,

Great advice. I agree it is easier now with less buyer running to drive up prices. Really appreciate it. Do you use the analysis tools here or something else work for you with your years of experience?

Best

John

Bill B. · Answer

Maybe try analyzing 10x as many deals? 1-2 per day just seems like it won’t get the job done.

As a realtor and a property manager you should be able to make deals work others can’t. Maybe start calling investors and ask them if you can shadow them or if they’d be willing to help you get started again?

This should be the easiest you’ll ever have it. 2 months ago you were up against a dozen buyers, half paying cash the other half offering over asking.

I have cash to buy, now what?

I have cash to buy, now what?

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