how hard is it find a good deal?
Long Island NY · Member since 2022 · 49 posts · 17 votes
how hard is it find a good deal?
Most Popular Reply
Real Estate Agent · Mohnton, PA · Member since 2018 · 47 posts · 58 votes
3yHi Jace,
That can be really subjective, some people find it really easy and have more deals than they can handle. Others can't seem to find a good deal anywhere. It all comes down to practice, consistency, and repetition. There may be better ways to find good deals but if you look at Redfin and Zillow every day and analyze properties, you will start to find good deals.
The other thing to consider is sometimes you have to MAKE a good deal. The house you saw listed for $150k... if the numbers don't work for you, figure out what purchase price would make this property a good deal. $130k? Make an offer, explain your reasoning for that number, and you will be surprised how many sellers want to have a conversation with you- especially in this transitioning market.
59 Replies
- 3yMelissa HaworthBusiness MemberReal Estate Agent · The Panhandle | The Emerald Coast | Panama City Beach | Destin · Member since 2017 · 291 posts · 108 votes
I would be happy to help you find a deal that works. I specialize in helping out of state investors find properties to invest in. Feel free to message me!
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes3y
Quote from @Jace Perez:
Quote from @Paul De Luca:
I think the answer to your question strongly depends on your definition of a "good deal". The higher return/criteria you set, the more difficult it will be to find or make.
By good deal I mean around 10% coc
Sure, that's easy as all heck. I can pipe-line ya a handful per week if not daily. Only catch, it's gonna be -D properties, Sec8 tenants, and you may need to invest in a bullet proof vest and complete a conceal-carry class to visit your properties.
- Long Island NY · Member since 2022 · 49 posts · 17 votes3yI’ll go get an ar15 real quick
Quote from @James Hamling:
Quote from @Jace Perez:
Quote from @Paul De Luca:
I think the answer to your question strongly depends on your definition of a "good deal". The higher return/criteria you set, the more difficult it will be to find or make.
By good deal I mean around 10% coc
Sure, that's easy as all heck. I can pipe-line ya a handful per week if not daily. Only catch, it's gonna be -D properties, Sec8 tenants, and you may need to invest in a bullet proof vest and complete a conceal-carry class to visit your properties.
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes3y
One persons definition of a "Deal that works" is going to be VERY different from another's. It's like saying "is there any Good Food out there".
For example:
Let's take "Paul the Pediatrist from Philadelphia". Paul has done amazing things these past years, after grinding away for decades Paul is now the "Foot Fungus King", curing funky foot disease and cashing checks. Paul has $ coming out his ears. And while the "conventional" world yammered of dump it all into stocks and bonds, Paul's been around a time, long enough to see 3+ market crashes and retirees working at Walmart as greeters. Paul is NOT gonna be one of those.
So for Paul, he's all about the AAA Strategy. He want's A class properties, in A class areas, with A class tenants. And for Paul, it's more like an amazing piggy-bank, or a killer CD, because he doesn't need the active income. BUT, Paul DOES need the DEPRECIATION, heck yeah "gimmie those write-off's" Paul says with a glimmer in his eye and pep-in-his-steep!
For Paul, he needs his investments to be just that, an INVESTMENT and NOT another J.O.B. because he's got funky-feet galore to cure, no time for tenants and toilets. Paul's best deal defends his time, runs on cruise control, he LOVES the new con. unit's and there 0 inputs for maint. and cap-x, and Paul being the sharp-one, he liquidates at yr7 as his advisor advises, so can Pyramid up with more NEW Con and stay in that blissful 0-input's zone.
And than there is "Penny-Pinching-Perry". Perry is a that guy who loads his pockets with the napkins at every fast food joint he visits, quick to let one know which is the best replacement for store bought TP, and all the shekel's he saves.
Perry is the guy who says "WHAT, $100k, what do you want $90k for, come on $80k is nuts, ok, here ya go I-give here's $70k". Perry loves loves loves his sec8 properties, will tell ya all about the money the gov wastes right into his pockets. And lord save you if you murmur the words "electrician" or "plumber" within earshot of Perry, he will set you straight quick on all it takes is some duck-tape, can of fleck-seal and some effort.
Perry is the definition of one persons trash is another's treasure. Perry ONLY get's em ugly, and will rant away on what he thinks is "just fine". For Perry, new = stupid. He can stretch a dollar like you'd never seen. Perry's vocabulary is cheap, cheap and cheap.
No deal, and I do mean NO DEAL, will ever be a "deal" to both Paul and Perry. Each loves what the other hates, and there both right! The difference is the people, there unique individual situation, interest's, comfort zones, goals and pain points.
- Member since 2020 · 1 post · 1 vote3y
For the guy that’s had success in CLE and sounds like still sees it as a honey pot, what areas do you recommend ? Ohio city, Lakewood, Cleve heights etc ? Thanks !
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes3y
Quote from @Jace Perez:
I’ll go get an ar15 real quickQuote from @James Hamling:
Quote from @Jace Perez:
Quote from @Paul De Luca:
I think the answer to your question strongly depends on your definition of a "good deal". The higher return/criteria you set, the more difficult it will be to find or make.
By good deal I mean around 10% coc
Sure, that's easy as all heck. I can pipe-line ya a handful per week if not daily. Only catch, it's gonna be -D properties, Sec8 tenants, and you may need to invest in a bullet proof vest and complete a conceal-carry class to visit your properties.
I'm not joking on the vest and carrying. I have been in the situation before. Had a PM get rushed by squatters at one, have had some properties get shot up. Break-in's are a Tuesday. And yes, homicides, they happen.
But hey, if that's your flavor, go for it. Sec8 in the getto makes great cash-flow, if you can handle the stress load of it all and put together the team of people with brazz-ballz to go into the areas and risk getting car-jacked at any given moment. Sounds like a joke but I'm not joking, I spent years in sec8, I am speaking from experience. And yes, there is guys tough enough to do it, I had em working for/with me.
But looking back, I have 0 interest doing it ever again. Every day was a gamble, maybe it would be fine, maybe I'd get shot, maybe I'd throw someone out a 3rd story window, who-knew, every day was an adventure.
Quote from @Carlos Ptriawan:
Quote from @Jace Perez:
How hard is it to find a deal that actually works? and are you able to analyze properties on redfin or Zillow and find good deals?
yes, actually better to find one in redfin/zillow because it's all an open book system.
there's deal to flip all these year around especially if you want to keep for 2 years or more.
I guess from many that I shortlisted, 10% makes me interested to contact seller again and from there usually 0 or 1 or 2 that seems 'doable'.
it's really good time to buy house in california this time aroundIn California? are you even getting positive cash flow here? Which part of CA are you referring to? would you mind to elaborate please.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Moe Khan:
Quote from @Carlos Ptriawan:
Quote from @Jace Perez:
How hard is it to find a deal that actually works? and are you able to analyze properties on redfin or Zillow and find good deals?
yes, actually better to find one in redfin/zillow because it's all an open book system.
there's deal to flip all these year around especially if you want to keep for 2 years or more.
I guess from many that I shortlisted, 10% makes me interested to contact seller again and from there usually 0 or 1 or 2 that seems 'doable'.
it's really good time to buy house in california this time aroundIn California? are you even getting positive cash flow here? Which part of CA are you referring to? would you mind to elaborate please.
i am your neighbour, i do flips in bay area, why cash flow, it's too small amount of money lol - Investor · Cottage Grove, MN · Member since 2016 · 24 posts · 11 votes3y
Quote from @James Hamling:
Quote from @Jace Perez:
I’ll go get an ar15 real quickQuote from @James Hamling:
Quote from @Jace Perez:
Quote from @Paul De Luca:
I think the answer to your question strongly depends on your definition of a "good deal". The higher return/criteria you set, the more difficult it will be to find or make.
By good deal I mean around 10% coc
Sure, that's easy as all heck. I can pipe-line ya a handful per week if not daily. Only catch, it's gonna be -D properties, Sec8 tenants, and you may need to invest in a bullet proof vest and complete a conceal-carry class to visit your properties.
I'm not joking on the vest and carrying. I have been in the situation before. Had a PM get rushed by squatters at one, have had some properties get shot up. Break-in's are a Tuesday. And yes, homicides, they happen.
But hey, if that's your flavor, go for it. Sec8 in the getto makes great cash-flow, if you can handle the stress load of it all and put together the team of people with brazz-ballz to go into the areas and risk getting car-jacked at any given moment. Sounds like a joke but I'm not joking, I spent years in sec8, I am speaking from experience. And yes, there is guys tough enough to do it, I had em working for/with me.
But looking back, I have 0 interest doing it ever again. Every day was a gamble, maybe it would be fine, maybe I'd get shot, maybe I'd throw someone out a 3rd story window, who-knew, every day was an adventure.
In your opinion, is it therefore not possible to automate the process to the point that you're removed from the day to day risk and stress and still take in higher returns on the cashflow or would the extra expenses of incurred with that type of management negate that? If not then I fail to understand why people invest in those areas at all especially when they may be sacrificing long term appreciation when stable returns can be had in better neighborhoods which might be better real returns. Do you have to be a Perry to make it work?
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes3y
Quote from @Kyle Kipka:
Quote from @James Hamling:
Quote from @Jace Perez:
I’ll go get an ar15 real quickQuote from @James Hamling:
Quote from @Jace Perez:
Quote from @Paul De Luca:
I think the answer to your question strongly depends on your definition of a "good deal". The higher return/criteria you set, the more difficult it will be to find or make.
By good deal I mean around 10% coc
Sure, that's easy as all heck. I can pipe-line ya a handful per week if not daily. Only catch, it's gonna be -D properties, Sec8 tenants, and you may need to invest in a bullet proof vest and complete a conceal-carry class to visit your properties.
I'm not joking on the vest and carrying. I have been in the situation before. Had a PM get rushed by squatters at one, have had some properties get shot up. Break-in's are a Tuesday. And yes, homicides, they happen.
But hey, if that's your flavor, go for it. Sec8 in the getto makes great cash-flow, if you can handle the stress load of it all and put together the team of people with brazz-ballz to go into the areas and risk getting car-jacked at any given moment. Sounds like a joke but I'm not joking, I spent years in sec8, I am speaking from experience. And yes, there is guys tough enough to do it, I had em working for/with me.
But looking back, I have 0 interest doing it ever again. Every day was a gamble, maybe it would be fine, maybe I'd get shot, maybe I'd throw someone out a 3rd story window, who-knew, every day was an adventure.
In your opinion, is it therefore not possible to automate the process to the point that you're removed from the day to day risk and stress and still take in higher returns on the cashflow or would the extra expenses of incurred with that type of management negate that? If not then I fail to understand why people invest in those areas at all especially when they may be sacrificing long term appreciation when stable returns can be had in better neighborhoods which might be better real returns. Do you have to be a Perry to make it work?
In the long run, yeah, I do.
Look, a "Perry", he's all about "livable" vs "nice". I may not look my age, but I got more than 3 decades in this biz. In that time I have seen the same story play out time and time again, the "mirage" that if you make it nice, sec8 tenant will "appreciate" it and all will elevate, getto-gardens will flourish, hugging circles will replace drive-bys and all will be well. Reality simply isn't so.
I have seen all kinds over the years, including gov. agencies, fall down that black-hole and the whole time that everyone is trying some jazzy new approach, improvement, tech, communications, messaging, BRIBES, while there all reliably failing again and again ONE and ONE ONLY is consistently doing A-OK, and that's the "Perry's", better known as "slum-lords".
Because the whole X-factor is property damage. Sec8 payment is via other, so that's not the crux of it all, how much beating your property can take and still post a profit is the game. And "Perry", he's got a doctorate in bare minimum for bare minimum $.
Could a person automate facets and do all of it remote, sure, of course, it's simply the most expensive way to do it and those returns will tumble. It takes a Napolian to make the "full-Monty" of sec8 work, but when it does, wow it really works.
Why do people jump into it? The simple obvious is Ego and $.
It's a hell of a cash-cow when done right, and those kind of returns get peoples ego running wild with they "Peff, I can do that, I ain't scared of nothing". Yeah, well, a few feces decorated units later, a body or two, acting an idiot to tenants happy to bash ones skull in later, that ego tends to turn into significant regret.
The world of sec8 is littered with failed landlords, all of which had the same idea, that they'd ignore what's worked for generations, do some jazzy what-ever, and slammed face-first into the brick wall of reality.
Like I said before, it takes a certain personality.
A 10 cap, it's not realistic in a simple stabilized property. A 10 cap, is a 10 cap, for a reason. If it were that one could just get any B+ property and get that great average Jane/John Doe tenant and post 10cap+, Wallstreet would be bankrupt because all the $ with half a wit would be a landlord.
You get what you pay for. That is the reality of it.
- 3yJoe VilleneuvePro MemberPlymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
The problem isn't finding good deals. The problem is twofold:
1 - When you find a potential deal, you're not the only one that finds it, since your not the only one that's looking for it. This means when you all find it, by the time everyone is done bidding on it, it isn't a deal anymore.
2 - You're looking for deals. See #1. Start looking for opportunities, and not deals. When you find the opportunity, turn it into a deal.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Joe Villeneuve:
The problem isn't finding good deals. The problem is twofold:
1 - When you find a potential deal, you're not the only one that finds it, since your not the only one that's looking for it. This means when you all find it, by the time everyone is done bidding on it, it isn't a deal anymore.
2 - You're looking for deals. See #1. Start looking for opportunities, and not deals. When you find the opportunity, turn it into a deal.
smart as usual :)
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @James Hamling:
Quote from @Kyle Kipka:
Quote from @James Hamling:
Quote from @Jace Perez:
I’ll go get an ar15 real quickQuote from @James Hamling:
Quote from @Jace Perez:
Quote from @Paul De Luca:
I think the answer to your question strongly depends on your definition of a "good deal". The higher return/criteria you set, the more difficult it will be to find or make.
By good deal I mean around 10% coc
Sure, that's easy as all heck. I can pipe-line ya a handful per week if not daily. Only catch, it's gonna be -D properties, Sec8 tenants, and you may need to invest in a bullet proof vest and complete a conceal-carry class to visit your properties.
I'm not joking on the vest and carrying. I have been in the situation before. Had a PM get rushed by squatters at one, have had some properties get shot up. Break-in's are a Tuesday. And yes, homicides, they happen.
But hey, if that's your flavor, go for it. Sec8 in the getto makes great cash-flow, if you can handle the stress load of it all and put together the team of people with brazz-ballz to go into the areas and risk getting car-jacked at any given moment. Sounds like a joke but I'm not joking, I spent years in sec8, I am speaking from experience. And yes, there is guys tough enough to do it, I had em working for/with me.
But looking back, I have 0 interest doing it ever again. Every day was a gamble, maybe it would be fine, maybe I'd get shot, maybe I'd throw someone out a 3rd story window, who-knew, every day was an adventure.
In your opinion, is it therefore not possible to automate the process to the point that you're removed from the day to day risk and stress and still take in higher returns on the cashflow or would the extra expenses of incurred with that type of management negate that? If not then I fail to understand why people invest in those areas at all especially when they may be sacrificing long term appreciation when stable returns can be had in better neighborhoods which might be better real returns. Do you have to be a Perry to make it work?
In the long run, yeah, I do.
Look, a "Perry", he's all about "livable" vs "nice". I may not look my age, but I got more than 3 decades in this biz. In that time I have seen the same story play out time and time again, the "mirage" that if you make it nice, sec8 tenant will "appreciate" it and all will elevate, getto-gardens will flourish, hugging circles will replace drive-bys and all will be well. Reality simply isn't so.
I have seen all kinds over the years, including gov. agencies, fall down that black-hole and the whole time that everyone is trying some jazzy new approach, improvement, tech, communications, messaging, BRIBES, while there all reliably failing again and again ONE and ONE ONLY is consistently doing A-OK, and that's the "Perry's", better known as "slum-lords".
Because the whole X-factor is property damage. Sec8 payment is via other, so that's not the crux of it all, how much beating your property can take and still post a profit is the game. And "Perry", he's got a doctorate in bare minimum for bare minimum $.
Could a person automate facets and do all of it remote, sure, of course, it's simply the most expensive way to do it and those returns will tumble. It takes a Napolian to make the "full-Monty" of sec8 work, but when it does, wow it really works.
Why do people jump into it? The simple obvious is Ego and $.
It's a hell of a cash-cow when done right, and those kind of returns get peoples ego running wild with they "Peff, I can do that, I ain't scared of nothing". Yeah, well, a few feces decorated units later, a body or two, acting an idiot to tenants happy to bash ones skull in later, that ego tends to turn into significant regret.
The world of sec8 is littered with failed landlords, all of which had the same idea, that they'd ignore what's worked for generations, do some jazzy what-ever, and slammed face-first into the brick wall of reality.
Like I said before, it takes a certain personality.
A 10 cap, it's not realistic in a simple stabilized property. A 10 cap, is a 10 cap, for a reason. If it were that one could just get any B+ property and get that great average Jane/John Doe tenant and post 10cap+, Wallstreet would be bankrupt because all the $ with half a wit would be a landlord.
You get what you pay for. That is the reality of it.
I love James presence, as he bring 'actual experience', not the bongo-bongo answer from typical BP realtors :)
"automate process" ? hell yea :) LOL
If I can tell you how many "tech co" try to automate these real estate into more like "AI-Engineered robot investments" (and failed misrably), you will invest a new ChatGPT.
And my office is in front of Google HQ so i know what i'm talking about, listen to James bro :) - Long Island NY · Member since 2022 · 49 posts · 17 votes3y
Quote from @James Hamling:
Quote from @Jace Perez:
I’ll go get an ar15 real quickQuote from @James Hamling:
Quote from @Jace Perez:
Quote from @Paul De Luca:
I think the answer to your question strongly depends on your definition of a "good deal". The higher return/criteria you set, the more difficult it will be to find or make.
By good deal I mean around 10% coc
Sure, that's easy as all heck. I can pipe-line ya a handful per week if not daily. Only catch, it's gonna be -D properties, Sec8 tenants, and you may need to invest in a bullet proof vest and complete a conceal-carry class to visit your properties.
I'm not joking on the vest and carrying. I have been in the situation before. Had a PM get rushed by squatters at one, have had some properties get shot up. Break-in's are a Tuesday. And yes, homicides, they happen.
But hey, if that's your flavor, go for it. Sec8 in the getto makes great cash-flow, if you can handle the stress load of it all and put together the team of people with brazz-ballz to go into the areas and risk getting car-jacked at any given moment. Sounds like a joke but I'm not joking, I spent years in sec8, I am speaking from experience. And yes, there is guys tough enough to do it, I had em working for/with me.
But looking back, I have 0 interest doing it ever again. Every day was a gamble, maybe it would be fine, maybe I'd get shot, maybe I'd throw someone out a 3rd story window, who-knew, every day was an adventure.
Oh damn I thought u were joking lol, I will definitely not be investing in those areas.
- Member since 2019 · 7k+ posts · 4k+ votes3y
Quote from @Nathan Harden:
Quote from @Jace Perez:
Quote from @Nathan Harden:
It all comes down to your own specific criteria. Some investors are incredibly stingy when it comes to their numbers so when they are trying to find a deal it might take a little more time and effort because they are going for quality over quantity.
say someone is looking for a 10-15% coc, im not sure if this question really has a specific answer, but if you were to estimate how long do you think would it take to find a deal like that?
It all depends on the market. If you're looking in San Diego California, you will be searching forever, may not ever find one with those numbers honestly. If you're searching in Cleveland Ohio, I could find a property in about 3 minutes with those returns.
This kind comparison is like do you want to invest in stable REIT or FANG stock.
Quote from @Jace Perez:
How hard is it to find a deal that actually works? and are you able to analyze properties on redfin or Zillow and find good deals?
Easy I get 10 a week in the Cleveland markets with not less then 20% NET caps, ITS ALL about your network, Long Island is terrible. I lived there my entire life, left about 5 years ago,
- 3yJay ThomasPro MemberReal Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
Real Estate investing is not easy but it's a great way to create significant wealth over time. There are no shortcuts and it takes an attitude of persistence, practice and repetition to be successful in the Real Estate game. If you're willing to put in the work, Redfin and Zillow can be excellent resources for finding deals - but don't forget that sometimes you have to make your own good deal by doing research on properties and making an offer that works for you! It may take some trial and error at first, but with patience and a little bit of ingenuity, Real Estate investing can be incredibly rewarding.
Good luck out there Real Estate investors! You've got this!
- Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes3y
In this market, very hard. But stay diligent and practice patience and you will be fine. STAY READY :)
- 3yJohn WilliamsBusiness MemberProperty Manager · Clarksville, TN · Member since 2018 · 443 posts · 210 votes
I'm buying properties right off the MLS in my market!
Rent My Home - Property Management4.8212 Reviews - Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes3y
Quote from @Jace Perez:
Quote from @James Hamling:
Quote from @Jace Perez:
I’ll go get an ar15 real quickQuote from @James Hamling:
Quote from @Jace Perez:
Quote from @Paul De Luca:
I think the answer to your question strongly depends on your definition of a "good deal". The higher return/criteria you set, the more difficult it will be to find or make.
By good deal I mean around 10% coc
Sure, that's easy as all heck. I can pipe-line ya a handful per week if not daily. Only catch, it's gonna be -D properties, Sec8 tenants, and you may need to invest in a bullet proof vest and complete a conceal-carry class to visit your properties.
I'm not joking on the vest and carrying. I have been in the situation before. Had a PM get rushed by squatters at one, have had some properties get shot up. Break-in's are a Tuesday. And yes, homicides, they happen.
But hey, if that's your flavor, go for it. Sec8 in the getto makes great cash-flow, if you can handle the stress load of it all and put together the team of people with brazz-ballz to go into the areas and risk getting car-jacked at any given moment. Sounds like a joke but I'm not joking, I spent years in sec8, I am speaking from experience. And yes, there is guys tough enough to do it, I had em working for/with me.
But looking back, I have 0 interest doing it ever again. Every day was a gamble, maybe it would be fine, maybe I'd get shot, maybe I'd throw someone out a 3rd story window, who-knew, every day was an adventure.
Oh damn I thought u were joking lol, I will definitely not be investing in those areas.
I had a Maint. Tech who was a former Spetsnaz. My other main Maint. Tech did 17yrs for manslaughter, with his bare hands. These were the guys a-ok with working in the area. I had a leasing guy ok with it but he wore a vest half the time, and had a 9mm gloc strapped to his hip at ALL times, and every time entering a unit his hand was on it like a cop doing a traffic stop.
Working sec8 in the "getto" is not a joke. It's all funny videos and interesting stories but people do get harmed, even killed working in that segment. It's all about vigilance, being trained and prepared, knowing the risks and consciously accepting them.
This is arguably why that segment is a "cash-cow", because it's gotta be for intelligent people to accept the risk of it all.
As i have said, plenty do great at it, it's totally possible, but easy it is not, nor simple or risk free. BIG returns come with big risks, responsibilities etc.., that's why there big returns. There is no free-lunch.
- Investor · Cottage Grove, MN · Member since 2016 · 24 posts · 11 votes3y
Quote from @James Hamling:
Quote from @Kyle Kipka:
Quote from @James Hamling:
Quote from @Jace Perez:
I’ll go get an ar15 real quickQuote from @James Hamling:
Quote from @Jace Perez:
Quote from @Paul De Luca:
I think the answer to your question strongly depends on your definition of a "good deal". The higher return/criteria you set, the more difficult it will be to find or make.
By good deal I mean around 10% coc
Sure, that's easy as all heck. I can pipe-line ya a handful per week if not daily. Only catch, it's gonna be -D properties, Sec8 tenants, and you may need to invest in a bullet proof vest and complete a conceal-carry class to visit your properties.
I'm not joking on the vest and carrying. I have been in the situation before. Had a PM get rushed by squatters at one, have had some properties get shot up. Break-in's are a Tuesday. And yes, homicides, they happen.
But hey, if that's your flavor, go for it. Sec8 in the getto makes great cash-flow, if you can handle the stress load of it all and put together the team of people with brazz-ballz to go into the areas and risk getting car-jacked at any given moment. Sounds like a joke but I'm not joking, I spent years in sec8, I am speaking from experience. And yes, there is guys tough enough to do it, I had em working for/with me.
But looking back, I have 0 interest doing it ever again. Every day was a gamble, maybe it would be fine, maybe I'd get shot, maybe I'd throw someone out a 3rd story window, who-knew, every day was an adventure.
In your opinion, is it therefore not possible to automate the process to the point that you're removed from the day to day risk and stress and still take in higher returns on the cashflow or would the extra expenses of incurred with that type of management negate that? If not then I fail to understand why people invest in those areas at all especially when they may be sacrificing long term appreciation when stable returns can be had in better neighborhoods which might be better real returns. Do you have to be a Perry to make it work?
In the long run, yeah, I do.
Look, a "Perry", he's all about "livable" vs "nice". I may not look my age, but I got more than 3 decades in this biz. In that time I have seen the same story play out time and time again, the "mirage" that if you make it nice, sec8 tenant will "appreciate" it and all will elevate, getto-gardens will flourish, hugging circles will replace drive-bys and all will be well. Reality simply isn't so.
I have seen all kinds over the years, including gov. agencies, fall down that black-hole and the whole time that everyone is trying some jazzy new approach, improvement, tech, communications, messaging, BRIBES, while there all reliably failing again and again ONE and ONE ONLY is consistently doing A-OK, and that's the "Perry's", better known as "slum-lords".
Because the whole X-factor is property damage. Sec8 payment is via other, so that's not the crux of it all, how much beating your property can take and still post a profit is the game. And "Perry", he's got a doctorate in bare minimum for bare minimum $.
Could a person automate facets and do all of it remote, sure, of course, it's simply the most expensive way to do it and those returns will tumble. It takes a Napolian to make the "full-Monty" of sec8 work, but when it does, wow it really works.
Why do people jump into it? The simple obvious is Ego and $.
It's a hell of a cash-cow when done right, and those kind of returns get peoples ego running wild with they "Peff, I can do that, I ain't scared of nothing". Yeah, well, a few feces decorated units later, a body or two, acting an idiot to tenants happy to bash ones skull in later, that ego tends to turn into significant regret.
The world of sec8 is littered with failed landlords, all of which had the same idea, that they'd ignore what's worked for generations, do some jazzy what-ever, and slammed face-first into the brick wall of reality.
Like I said before, it takes a certain personality.
A 10 cap, it's not realistic in a simple stabilized property. A 10 cap, is a 10 cap, for a reason. If it were that one could just get any B+ property and get that great average Jane/John Doe tenant and post 10cap+, Wallstreet would be bankrupt because all the $ with half a wit would be a landlord.
You get what you pay for. That is the reality of it.
Makes sense, thanks for the reply. The market kind of seems like a sliding scale of cashflow/appreciation and how much crap you're willing to put up with haha
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes3y
Quote from @Kyle Kipka:
Quote from @James Hamling:
Quote from @Kyle Kipka:
Quote from @James Hamling:
Quote from @Jace Perez:
I’ll go get an ar15 real quickQuote from @James Hamling:
Quote from @Jace Perez:
Quote from @Paul De Luca:
I think the answer to your question strongly depends on your definition of a "good deal". The higher return/criteria you set, the more difficult it will be to find or make.
By good deal I mean around 10% coc
Sure, that's easy as all heck. I can pipe-line ya a handful per week if not daily. Only catch, it's gonna be -D properties, Sec8 tenants, and you may need to invest in a bullet proof vest and complete a conceal-carry class to visit your properties.
I'm not joking on the vest and carrying. I have been in the situation before. Had a PM get rushed by squatters at one, have had some properties get shot up. Break-in's are a Tuesday. And yes, homicides, they happen.
But hey, if that's your flavor, go for it. Sec8 in the getto makes great cash-flow, if you can handle the stress load of it all and put together the team of people with brazz-ballz to go into the areas and risk getting car-jacked at any given moment. Sounds like a joke but I'm not joking, I spent years in sec8, I am speaking from experience. And yes, there is guys tough enough to do it, I had em working for/with me.
But looking back, I have 0 interest doing it ever again. Every day was a gamble, maybe it would be fine, maybe I'd get shot, maybe I'd throw someone out a 3rd story window, who-knew, every day was an adventure.
In your opinion, is it therefore not possible to automate the process to the point that you're removed from the day to day risk and stress and still take in higher returns on the cashflow or would the extra expenses of incurred with that type of management negate that? If not then I fail to understand why people invest in those areas at all especially when they may be sacrificing long term appreciation when stable returns can be had in better neighborhoods which might be better real returns. Do you have to be a Perry to make it work?
In the long run, yeah, I do.
Look, a "Perry", he's all about "livable" vs "nice". I may not look my age, but I got more than 3 decades in this biz. In that time I have seen the same story play out time and time again, the "mirage" that if you make it nice, sec8 tenant will "appreciate" it and all will elevate, getto-gardens will flourish, hugging circles will replace drive-bys and all will be well. Reality simply isn't so.
I have seen all kinds over the years, including gov. agencies, fall down that black-hole and the whole time that everyone is trying some jazzy new approach, improvement, tech, communications, messaging, BRIBES, while there all reliably failing again and again ONE and ONE ONLY is consistently doing A-OK, and that's the "Perry's", better known as "slum-lords".
Because the whole X-factor is property damage. Sec8 payment is via other, so that's not the crux of it all, how much beating your property can take and still post a profit is the game. And "Perry", he's got a doctorate in bare minimum for bare minimum $.
Could a person automate facets and do all of it remote, sure, of course, it's simply the most expensive way to do it and those returns will tumble. It takes a Napolian to make the "full-Monty" of sec8 work, but when it does, wow it really works.
Why do people jump into it? The simple obvious is Ego and $.
It's a hell of a cash-cow when done right, and those kind of returns get peoples ego running wild with they "Peff, I can do that, I ain't scared of nothing". Yeah, well, a few feces decorated units later, a body or two, acting an idiot to tenants happy to bash ones skull in later, that ego tends to turn into significant regret.
The world of sec8 is littered with failed landlords, all of which had the same idea, that they'd ignore what's worked for generations, do some jazzy what-ever, and slammed face-first into the brick wall of reality.
Like I said before, it takes a certain personality.
A 10 cap, it's not realistic in a simple stabilized property. A 10 cap, is a 10 cap, for a reason. If it were that one could just get any B+ property and get that great average Jane/John Doe tenant and post 10cap+, Wallstreet would be bankrupt because all the $ with half a wit would be a landlord.
You get what you pay for. That is the reality of it.
Makes sense, thanks for the reply. The market kind of seems like a sliding scale of cashflow/appreciation and how much crap you're willing to put up with haha
Yup, it is.
Actually it's a kind of double scale.
As cash-flow goes UP, appreciation tends to fall. And as risk goes up, so does returns and vice versa.
But a time-scale also changes how the math plays out.
For example, I have been buying with clients in a regional zone we call "path-of-progress" and most of these had near to $0 returns yr1 on COC. BUT appreciation was through the roof, often more than $1k per mnth. But those rents ALSO were appreciating. So step into yr3, and now all of a sudden the COC is actually looking rather nice, really nice actually, some touching on that 10 cap, some just a bit over. BUT it was not there day 1.
Some TIME has a big impact. What things are at acquisition time are not eternal. If done correctly, a person can get an AMAZING investment property, that only requires a touch of patience for it to come into it's "zone".
Yet another reason I don't do sec8's today, because there is simply no reason to, I can hit better returns with B+ properties.
Sometimes a net-0 property on the COC at time of purchase can absolutely be your "cash-cow" in just a few years.
- Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes3y
Quote from @Joe Villeneuve:
The problem isn't finding good deals.
Start looking for opportunities, and not deals. When you find the opportunity, turn it into a deal.
Exactly. Good deals are created, not found.
- New to Real Estate · Castle Rock, CO · Member since 2014 · 172 posts · 66 votes3y
How hard is it to find. It depends. It comes down to one, what market are you in. What kind of financing are you doing. What are you willing to deal with in a property(full gut rehab or just a touch up etc.)
Personally I invest in the Southeast, I analyze about 3-5 deals a week. Out of those, I can put in about 1 - 2 offers a month. Now I invest in cities that are less than 30,000 people so there aren't as many properties out there. Can I find deals that work, it is difficult but yes I can. Again, just depends on where and what you are looking for.
- 3yPatrick DruryBusiness MemberReal Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
@Jace Perez
Pretty easy if you hop on the phones and cold call off-market sellers.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.