Have just under $1MM to invest over the next 2-3 months...

Buying & Selling Real Estate
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Have just under $1MM to invest over the next 2-3 months...

Joshua Hayes
Member since 2011 · 3 posts · 0 votes

I need some feedback and help:

I'm looking to invest just under $1,000,000 in the next 60-120 days in real estate. This is what I'm looking for...

1. Properties with equity that also cashflow
2. Good rehab deals with equity

I'm thinking of getting with an agent to find these deals for me on MLS, but here are my qualms...

1. How do I find an "investor friendly" agent?
2. Are there many "good" deals on MLS

Any suggestions and feedback would be appreciated.

Thanks!

PS - I'm in the Portland area.

Note from Moderator: Absolutely no ads in this thread.

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Most Popular Reply

Jon Holdman
Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
15y

I'd be very cautious about posting publicly saying "I have $1 million to invest". All sorts of deals are going to crawl out of the woodwork.

What do you know about this business? If you have RE investing experience and understand the business you'll be able to identify when an agent is offering you a deal vs. just retail deals.

It is possible to buy off the MLS. Its a LOT of work. I'd guess you need to consider at least 200 listings, actually look at 50, make 20 offers and then you'll buy one.

Don't know the Portland area at all. But decent rentals tend to be lower priced. Read in the Rental Property forum, especially about the 50% rule. That says vacancy, operating expenses and capital expenditures will eat 50% of the gross scheduled rent. You need to take that estimate and start evaluating the rents and prices in different areas. Good rentals tend to be low priced. Its very difficult to get enough rent out of a $250K SFR rental to make a profit. Much more feasible in the $50-100K range.

MLS listings, especially for nicer houses (not short sales, not REOs) are "retail" prices. You really want to try to buy well below retail so you have some built-in equity.

If you're intending to apply leverage, and you can find the right lender, $1 million in cash translates into $3-4 million in purchasing power. Even at $100K, that's 30-40 houses. Realistically, you will not pull that off in 60-120 days. Now, if you're just paying cash, and wanting to buy 8-10 houses, you might. Even then, its going to be a full time job, if you actually want deals.

If you're willing to just buy whatever's on the MLS at retail prices and aren't actually worried about finding profitable deals, this will be much easier. And you'll find many agents who will help you.

If you really want to try to buy dozens of good deals, you're going to keep at least one agent busy full time for several months.

Is moving an option? Lots of places in the US where you could turn that money into a very nice income from rental property.

Maybe you could explain a little better about your goals for these investments?

Also please note that any unsolicited e-mails or PM's offering you deals are a violation of BiggerPockets forum rules and terms of service. I see nothing in your post that is asking for any sort of solicitation. If you start getting PM's or e-mails offering deals, please let me know.

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  • Steve L.
    Investor · Rancho Cucamonga, CA · Member since 2008 · 1k+ posts · 684 votes
    15y

    What's with the time frame?
    I think if you push the envelope spending that amount of money you are likely going to make some rushed decisions.

    What rate of return are you looking for?
    If you are happy with mid-to-high single digit returns a year, I think you can make that happen in a lot of markets.

    What is your long-term real estate goal?
    You mention looking for both rentals and flips. They are completely different models.

    I think you would be better of going to a local REIA club or working with an experienced investor versus trying to start with an investor friendly agent. They will want a bigger piece of the deal, but if you securitize yourself properly the chances of you loosing money is a lot smaller then the lone-wolf mentality.

    I buy pretty much exclusively out of the MLS now. It is getting tougher but there are still deals available.

    Good luck!

    1Reply
  • Gregory Childs
    Flipper/Rehabber · Orlando, FL · Member since 2008 · 263 posts · 147 votes
    15y

    Joshua,
    Are you trying to do this in your backyard? My partner is looking to close this week on a 84 acre ranch in southern OR (Medford) so we have looked at the market in OR to see if we could do some deals - cash flow was a challenge! Your property price/rent ratio's are pretty tough.

    If you want to do business in OR you should probably look at multifamily - small appartment complex, etc. SFH would be tough.

    We invest in Atlanta and Indy and can buy correctly (to create equity and cashflow). We just didn't see that we could do that in OR. Good hunting!
    TTFN,

    Greg

    1Reply
  • Patricia S.
    MI · Member since 2008 · 17 posts · 0 votes
    15y

    Joshua,

    MLS listings have good properties.
    Thanks,
    Patti

    0Reply
  • Jeffrey K.
    Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
    15y

    I would stay away from deals from people with a low number of posts. 1mm sounds like a lot of money, but you can burn it very quickly in this business. Is that what you have for a downpayment or is that the total you can get a loan for?

    If you have 1mm to put down I would look at a large complex an use a HUD 223 (F) loan. I think they are 83% LTV these days. You should be looking for a class B building. Because of the low rate and a long note, you will be able to pay just as much as anyone else and still make a profit. I think this is the safest way to invest 1mm for maximum return. The only problem I see is your lack if experience and this play into the ability to get the loan.

    For this you need to find a commercial broker who does multis.

    1Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    15y

    I'd be very cautious about posting publicly saying "I have $1 million to invest". All sorts of deals are going to crawl out of the woodwork.

    What do you know about this business? If you have RE investing experience and understand the business you'll be able to identify when an agent is offering you a deal vs. just retail deals.

    It is possible to buy off the MLS. Its a LOT of work. I'd guess you need to consider at least 200 listings, actually look at 50, make 20 offers and then you'll buy one.

    Don't know the Portland area at all. But decent rentals tend to be lower priced. Read in the Rental Property forum, especially about the 50% rule. That says vacancy, operating expenses and capital expenditures will eat 50% of the gross scheduled rent. You need to take that estimate and start evaluating the rents and prices in different areas. Good rentals tend to be low priced. Its very difficult to get enough rent out of a $250K SFR rental to make a profit. Much more feasible in the $50-100K range.

    MLS listings, especially for nicer houses (not short sales, not REOs) are "retail" prices. You really want to try to buy well below retail so you have some built-in equity.

    If you're intending to apply leverage, and you can find the right lender, $1 million in cash translates into $3-4 million in purchasing power. Even at $100K, that's 30-40 houses. Realistically, you will not pull that off in 60-120 days. Now, if you're just paying cash, and wanting to buy 8-10 houses, you might. Even then, its going to be a full time job, if you actually want deals.

    If you're willing to just buy whatever's on the MLS at retail prices and aren't actually worried about finding profitable deals, this will be much easier. And you'll find many agents who will help you.

    If you really want to try to buy dozens of good deals, you're going to keep at least one agent busy full time for several months.

    Is moving an option? Lots of places in the US where you could turn that money into a very nice income from rental property.

    Maybe you could explain a little better about your goals for these investments?

    Also please note that any unsolicited e-mails or PM's offering you deals are a violation of BiggerPockets forum rules and terms of service. I see nothing in your post that is asking for any sort of solicitation. If you start getting PM's or e-mails offering deals, please let me know.

    4Reply
  • Darryl Dahlen
    Commercial Loan Officer · Southern Maine, ME · Member since 2009 · 782 posts · 415 votes
    15y
    Originally posted by Jeffrey K.:
    I would stay away from deals from people with a low number of posts. 1mm sounds like a lot of money, but you can burn it very quickly in this business. Is that what you have for a downpayment or is that the total you can get a loan for?

    If you have 1mm to put down I would look at a large complex an use a HUD 223 (F) loan. I think they are 83% LTV these days. You should be looking for a class B building. Because of the low rate and a long note, you will be able to pay just as much as anyone else and still make a profit. I think this is the safest way to invest 1mm for maximum return. The only problem I see is your lack if experience and this play into the ability to get the loan.

    For this you need to find a commercial broker who does multis.

    Good thought, but Fannie's DUS program might be a better fit. Similar terms through a cheaper loan to obtain.

    1Reply
  • Kevin Kaczmarek
    Real Estate Investor · Fishers, IN · Member since 2009 · 408 posts · 196 votes
    15y

    I would second what Jeffrey and Gregory have said.
    I have found that it is much better to go without an agent, yet work with a solid, local wholesale company in the area. Depending on where you are looking to invest there are several on here with great reputations. Again as Jeffrey said, make sure they have contributed for a while.
    By identifying that you are looking to invest $1Mil, your post is going to attract a lot of natural attention.

    Are you looking to do commercial or residential? If you are looking to do residential, then you should look where Gregory mentioned, ATL and INDY. Both were as recent as last week mentioned as the two best undervalued cities in america by Harry Dent Jr. on his weekly address.

    I have been accumulating Indianapolis properties for a while now and am in the midst of buying over 30 as rentals for my investing partners and myself, and let me tell you, it is work to find the right deals, get them closed, do the repairs if necessary, and then find good tenants.
    I say all this to suggest you don't put yourself under the time constraint of 2-3 months if you are looking to do residential as that will just lead to some bad deals.
    This market is soft enough that you can work hard to find the right deals and if you find your best stuff 6 months from now, its not as if you missed a good market.

    If you are looking to do commercial, you will want those 2-3 months to do your due diligence before making a purchase decision.

    It sounds like you are going to have a fantastic time building up your portfolio. Have fun with it!!

    0Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    15y

    I have to second what Jon said, about announcing publicly that you have a large sum of money (even a small sum gets this same admonishment BTW), and that all sorts of offers will be coming your way.

    And you will find that people making suggestions to you will be pushing things that they personally have invested in (hmmm, maybe you'll be a willing "sucker" to take some "top quality" / dog deals from them) ... No offense intended or directed toward anybody who has made such suggestions or offers already - I am simply warning the OP to be on his toes, and really explore and investigate any opportunity that anybody presents. And without trying to sell anything here myself ...

    2Reply
  • Dale Osborn
    Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
    15y

    MLS is mainly for SFR. Wealth is built faster in the commercial arena so MLS will not help you there. Being in favor of Mobile Home Parks - I know that if I had a million to invest, I would look for a nice quiet senior MHP to invest in!

    Good Luck & Best Wishes on getting this done in your short time frame.

    0Reply
  • Will BarnardPro Member
    Moderator
    Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
    15y

    I too agree with the advice Jon has provided you. It sounds to me (from your post) like you lack the experience and knowlede in RE investing. If that is the case, there is no hurry to invest your funds (unless you are required to through an exchange like 1031). Learn the ropes and the best strategy for that amount of funds which will deliver the highest returns while mitigating risk factors.

    Podcast Guest on Show #130
    0Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    15y

    Joshua is this your money or part of a group or a partners money???

    If there are other decision makers involved it's best to know it upfront.

    If you are buying commercial it does not have to be in your own backyard.

    If you are buying a larger facility the property management company will be running it day to day.

    Are you a business professional looking for money to invest or do you want to be more hands on in the process??

    There are value add plays where you can increase equity but they are much more intense in scope of work and do not qualify for conventional lenders most of the time.

    A fully performing property will be able to get lending easier.

    Podcast Guest on Show #47
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    3Reply
  • Sam Ferris
    Homeowner · San Jose, CA · Member since 2011 · 29 posts · 6 votes
    15y

    Solicitation REMOVED. This is not a thread for making deals.

    0Reply
  • Jeffrey K.
    Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
    15y

    Sam here is a prime example of what they said was going to happen. There a lot of these types on BP so watch out. At least he comes out and tells you he has no job and wants money.

    2Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    15y

    Sam,

    You forgot to include your Social Security Number... How do you expect somebody to give you a loan without that piece of information? :wink:

    0Reply
  • Dave R.
    Residential Real Estate Broker · Fishers, IN · Member since 2011 · 2 posts · 1 vote
    15y

    Hey Joshua,
    I have low posts right now but that is because i started this profile for my brokerage. My experience has been to work with investors in the area and know where to find the deals. I'm located in Indy and have been working with Kevin K. on some of his deals.
    I have been working the good areas in Indy for over 7yrs and can give you advice on both sides of the fence, as a realtor and as an investor. Don't go with the first "investor" realtor you come across, most of the time they are just REO brokers. They will find you cheap deals but not in the best of neighborhoods.
    I wouldn't necessarily go with any wholesaler in town either. Make sure they know the ropes and are not trying to just blow smoke up you pants.
    Have fun and if you have any questions please feel free to message me!

    0Reply
  • Jeffrey K.
    Real Estate Investor · Milwaukee, WI · Member since 2008 · 1k+ posts · 671 votes
    15y

    I would also stay away from wholesalers until you know what you are doing. It is best to find a commercial broker.

    0Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    15y

    I think the Moderator edited my post by mistake instead of the post below mine.

    The post below mine has a telephone and e-mail.Mine didn't have anything like that in it.

    No biggie.If Joshua wants to contact any of us he can along with showing proof of funds before anyone goes further.

    All the best.

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    1Reply
  • Joshua Hayes
    OP
    Member since 2011 · 3 posts · 0 votes
    15y

    Thanks for all of the replies...

    To answer some general questions I've received:

    1. What is your real estate background?

    I have some experience with residential real estate... A couple of rehabs and lease options.

    2. Is this money your money or investors?

    It's both mine and a silent partner's. I don't want to get into the ins and outs of details in a public forum, but if I work with anyone, I am the decision-maker and have POF.

    3. Are you looking for residential or commercial real estate?

    My experience falls on the residential side, although I'm exploring some commercial options.

    Thanks,

    Joshua

    0Reply
  • Sam Ferris
    Homeowner · San Jose, CA · Member since 2011 · 29 posts · 6 votes
    15y

    If I could qualify for the debt/income ratio then, given the equity and income from the property and my high FICO, I would just go to the bank that has the first......

    I am a lot better investment then a CD thats for sure.

    Although the property value did go down a lot during the bust the rental income has never ever gone down since 1999.

    0Reply
  • Joshua D.Pro Member
    BiggerPockets Founder · HI · Member since 2008 · 16k+ posts · 5k+ votes
    15y

    Lots of solid advice here. That said, any solicitations will be removed as they have been already above.

    Podcast Guest on Show #100
    0Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    15y

    To add to that, asking Joshua to contact you is considered a solicitation.

    0Reply
  • Jon Holdman
    Rental Property Investor · Mercer Island, WA · Member since 2008 · 22k+ posts · 14k+ votes
    15y

    Apparently Josh and I were unclear. Let me be clear:

    You post an ad of any sort, no matter how blatant or subtle, in this thread and its going to be deleted.

    0Reply
  • Marc Freislinger
    Flipper · Phoenix, AZ · Member since 2009 · 973 posts · 679 votes
    15y

    My mistake.

    Different account name. Same name.

    1Reply
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