Springfield, MO Realtor says BP calc doesnt work in this market

6 Replies

I met with a realtor today to go over a portfolio that someone was selling off in our area, we definitely cant bite off the entire portfolio for a first deal, So for our first investment to kick start our future, we were very interested in only the 5 duplexes listed at $1 mill, to get close to an 8 cap with good cashflow we would have to offer around $600k and $500k was where we wanted to be after using the BP calc. This realtor said that we would definitely have to take out the 8% P.Management, 10% capx, 10% Maintenance when looking at any properties and that we would be lucky to find a property that had just $100/door after mortgage let alone Vacancy % calculated in. Is there really no market for this and is this something that you just cant use the MLS or a realtor to get into? I have listened to over 15 different BP podcasts and on one podcast there was this one energetic guy down in Florida that was only a wholesale guy and had a ton of effective ways via mailers to get his deals. Will that be the only real way to come across the "deals" that fit the BP calculator? I mean I guess if its a good deal and its listed on the MLS then it would be gone or sniped before it hit the MLS... Where there is a will there is a way, and we are going to make something of this but it feels like our first honest attempt at this was hit with a brick wall, and oh by the way that realtor said that he would be wasting every ones time if we made that offer of $500k

The BP calculator can work in any market lol

 I’m in your market, and I would tell you that realtors sell for retail. So most of the time that means you’re going to buy something at market value. If you don’t want to buy at market value, which is something that I think just about everyone on BP would suggest, then you’re going to have to go find your own deals. You may get really lucky and be able to find a realtor that can find you deals, but those are few and far between. 

 With this particular realtor I would go ahead and make that low offer.  You never know what could happen.

That kind of offer would work in KC... Right down the road lol

I would agree with @Casey Mericle that finding “deals” through a realtor is going to be tough because of their natural tendency to want to sell at retail.  If you make a $500k offer in the property then he is obligated to submit the offer. That will at least get communication started between you and the seller.  Good luck!

Thankyou all for the time and responses, I think I am going to figure out how to use listsource.com and send out mass mailers to owners of multi family properties and see if we can get anywhere with that route in finding our cash flowing duplexes. I know mailers work well for single family but do you all know anyone that has ever tried to crack the multi family owners world with mailers?

If your meeting with a realtor that is going to represent you, and they tell you an offer will waste everyone's time, then it's time for a gentle reminder.  You can always find another realtor who will happily make an offer for you, and that realtor will be the one to pick up the commission.  The majority of realtors live paycheck-to-paycheck.  

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