How Picky Should I be when making offers on multi-units?

Question

Hello..new to this website...great info and topics.

Have a local agent who deals with buying multi-units (duplex, tri plex, quadplex etc)

Located in Fresno, CA.  Have probably reviewed approx 20 or so potential units.  Each potential listing, was steered away because of location, rough areas, bad tenant potential, etc.

The agent has been in the business very long time, and i feel he has my best interests in mind, since he could easily just "sell" me a listing im interested in.

My question for those who have experience...is this the path to stay on? Being very selective, patient, etc.  Or sometimes do you just need to take the chance?

Thanks!

Jeff Zimmerman · Answer

@John Otto.  I like your question, the answer is yes and no.  I’ve found a number of my clients who DONT buy anything for a long time struggle with one or a combo of these things 1. Fear, which is real, but if fear makes the decisions there will never be a property good enough.  2.  Inability to see the big picture, the actual numbers may not look good now but what COULD they look like after you take over and also what is happening in the overall MFH market, does it keep moving up or down? 3. Unrealistic expectations, they want a return that is rare to get and they need to lower them or take their money into another asset type. These clients think they should write low offers but the reality is that all of us agents have someone we can “dump” a property to who will do a smooth transaction at a low ball price.  So a newbie doesn’t really stand a chance to get this until they are in good standing with an agent.

I’d say, just make sure you know what you want and that your expectations are realistic, then stay the course.  Good luck.

John Otto · Answer

Thank you for your insight Jeff!

Those points make sense and definitely understood.

As a newbie to Fresno MFH..any tips, advice , dos /donts, insights I could bum from you?

Thanks👍

John Otto · Answer

Amanda

thank you for that great insight.  Agent has been in industry 25+ years and does own multi units himself.  I understand without great detail of area, properties info, it would be difficult for you to advise on properties.

Thanks!!

Amanda Wirch · Answer

That is extremely difficult to say.  Without knowing too much about your specific market, or about those particular properties, I cannot say whether any of the deals you have looked at were worth "taking a chance".  To be fair, an agent does get paid when a purchase is made, so this agent is certainly not in it 'just' for the commission it would sound like :)If you are questioning the choices on nixing some of those properties, I would suggest adding a property manager to your team.  A property manager (ideally from a different company/team than your agent) can add a lot of insight into current conditions and areas of need or growth in your market.  They would also add a second set of eyes/perspective that may help reveal further to you the issues/concerns with the properties that your agent has, and whether or not they are simply personalized preferences, or a true issue.  My other question is, does your agent actually own properties?  Also if he has been in the market a long time, is he overly cautious in areas that might be undergoing a shift or change?  Areas that were problematic 20 years ago in a town often bear undo reputation for many years after they start to improve.  He may be trying to pick properties that he would buy, which can be hard to do if you two don't share the same vision or preferences in properties.