Are there really this many bad deals?

139 Replies

Originally posted by @Eduardo Medina :

@Antonio Cucciniello

It’s not difficult at all. It’s an obsession!!! Something that consumes your time. Energy. And sleep. And still you enjoy every minute of it. To succeed you must obsess happily ever after. Hope this helps. 😉

No doubt about it, I have been seeing different properties in my dreams 

Originally posted by @Daniel Kent :

@Antonio Cucciniello I have been searching in South Jersey and also feel that more properties are not deals than are deals. It is tough to resist the itch and buy and bad deal, but definitely be patient! The BP experts say, “every no gets you closer to a yes” so maybe every bad deal gets you one more closer to a good deal. Good luck in your search!


Hello Fellow New Jersey Investor! Yes, seems that way, but this may just be a patience thing, how many offers have you made so far?

 

Originally posted by @Jordan Moorhead :

@Antonio Cucciniello almost no deals are good deals as they’re listed. You have to offer below or find a way to add value.

Thats what I have aimed to do, it seems when I make an offer using those numbers I get beat to it! It’s ok though I will keep offering 

Originally posted by @Ola Dantis :

@Antonio Cucciniello On larger Multifamily deals that we underwrite, it's a ratio of 1:100 to find that one gem 💎

So I gotta work to see and analyze more properties! 

Originally posted by @John DeFreitas :

If you're serious about doing this consider investing long distance. I live in Miami and spent a year of time wasted looking for a property. I went elsewhere in the state and have purchased 7 in the past 3 years.

I have considered that but I do not know the areas. That is the issue. And investing the money and time to learn another area will only set me farther back in time

Originally posted by @James De Stefano :

Some great posts so far. It may have been mentioned prior, but MLS is loaded with overpriced listings in Texas, as I assume it is nation wide. But that's to be expected.

Yet, every single house is a good deal... at a certain price. 

Are they motivated to move? 

Is the house badly outdated?

Do they have a serious problem that needs to be solved?

Answering these questions is simple enough.  Just not EASY to do.  



Without knowing who the seller is, is it possible to get answers to these questions? If so how?

 

Originally posted by @Herndon Davis :
Originally posted by @Antonio Cucciniello:
Originally posted by @Herndon Davis:
Originally posted by @Antonio Cucciniello:

A lot of it is a  function of where you live and currently looking. However, if you are looking in the Midwest or Southeastern fly over states, you can find deals there a lot cheaper and that will cash flow to your delight.  But when you're paying market value  or close to it AND at a much higher dollar value  for property then it makes it a lot harder to cash flow especially if you need to make repairs.  Try new locations.

How do you feel about Austin, TX? It’s the only other area I know of than the areas in New Jersey/NYC.  Would you consider it great place for cash flow?

 

Austin is growing quickly.  It's the high tech mecca for Texas. It is NOT new undiscovered territory.  But there's still room for growth given the expansion of major Tech companies there.  You won't be adhead of the curve on that one but you can still find deals there but hurry up!



Would Katy, TX be a better option?

 

Originally posted by @Antonio Cucciniello :
Originally posted by @Herndon Davis:
Originally posted by @Antonio Cucciniello:
Originally posted by @Herndon Davis:
Originally posted by @Antonio Cucciniello:

A lot of it is a  function of where you live and currently looking. However, if you are looking in the Midwest or Southeastern fly over states, you can find deals there a lot cheaper and that will cash flow to your delight.  But when you're paying market value  or close to it AND at a much higher dollar value  for property then it makes it a lot harder to cash flow especially if you need to make repairs.  Try new locations.

How do you feel about Austin, TX? It’s the only other area I know of than the areas in New Jersey/NYC.  Would you consider it great place for cash flow?

 

Austin is growing quickly.  It's the high tech mecca for Texas. It is NOT new undiscovered territory.  But there's still room for growth given the expansion of major Tech companies there.  You won't be adhead of the curve on that one but you can still find deals there but hurry up!

Would Katy, TX be a better option?


Yes, Katy, Cinco Ranch, Spring Branch

 

Originally posted by @Christopher Brian :

@Antonio Cucciniello I'd start with several BP podcasts to answer you on this one. First, try out BP321 then 260: 
https://www.biggerpockets.com/blog/biggerpockets-podcast-321
https://www.biggerpockets.com/blog/biggerpockets-podcast-260-ultimate-guide-negotiating-with-fbi-hostage-negotiator-chris-voss

Then I'd go to this for a direct answer to your question: 
https://www.biggerpockets.com/blog/why-choose-seller-financing
Here's my story: I had a seller financing deal accepted partially because the owner didn't want to be the one to collect the rent from the tenants every month and also have to deal with maintenance. They wanted steady, easy, repeatable cash flow. They originally wanted 85k. I got them down to 63k, seller financing, 30 year term. How: I used a spreadsheet to show them that over time they'd receive more because of interest payments than they would have received if they accepted the next best offer at 75k. They didn't want to receive a big chunk of money for the house because they were going to immediately get hit with a capital gains tax.  Ultimately, in the inspection I discovered some major mechanical issues that killed it for me. But, there's an example of how you can go in and, using seller financing as a tool, present a deal that is a better fit for you and the seller. Focus on what they want more than you focus on what you want and you'll generally come out on top. 
Oh-the other thing - never lead off with your number. Never offer up your number too soon. Try and get the seller to give you their best price first. Then negotiate. You got this. 
 
 First off amazing story. Thank your for that insight.  Negotiation was never a skill of mine but I am definitely working on it. Thank you for the links, already went through the article and some great stuff I had not thought about.

If you can achieve an 9% Cash on Cash return in Y1, and if held for 5 years at hit a 16% IRR you are doing great or following simple rule after paying everything I want to make $250 a unit per month in my pocket but still look at your Cash on Cash return. Underwrite correctly and speak to a PM in the area you looking at.

Originally posted by @Jordan Moorhead :

@Antonio Cucciniello how long have you been looking? Typically it takes 3-6 months in a competitive market in my experience when you're just getting started.

2 months, but what measurements would make something a competitive market vs an uncompetitive one?

 

A competitive market still has house selling in 48 hrs or less. It's still happening in my market given the property is priced correctly for the location. I'm a firm believer in making deals, not stumbling upon them on the MLS>.

Originally posted by @Antonio Cucciniello :
Originally posted by @James De Stefano:

Some great posts so far. It may have been mentioned prior, but MLS is loaded with overpriced listings in Texas, as I assume it is nation wide. But that's to be expected.

Yet, every single house is a good deal... at a certain price. 

Are they motivated to move? 

Is the house badly outdated?

Do they have a serious problem that needs to be solved?

Answering these questions is simple enough.  Just not EASY to do.  

Without knowing who the seller is, is it possible to get answers to these questions? If so how?


 

Mostly depends on the RE  listing agent. It never hurts to ask questions, the worst they can do is say no or ignore you. 

Have you received many offers so far?    

And if the D.O.M. is high, likely they have received dozens of low ball offers ( but.. many could be verbal only). A real, written offer w/ POF has a decent chance to be taken seriously. Good luck