How Are You Adjusting Your Investing Approach These Days?

Real Estate Agent · San Antonio, TX · Member since 2020 · 28 posts · 8 votes

Hey everyone, I’ve been thinking a lot about how much our approach has to shift depending on what’s happening in the market. Some folks I talk to are tightening up their buy box, while others are just staying consistent and playing the long game. Curious how you’re handling things right now — have you changed what you’re buying, or are you sticking to what’s worked for you so far? Always good to hear what others are doing to keep deals working in today’s market.

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David Krulac

Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes

11mo

Buying newer properties built since year 2000, selling properties older than that. Have owned properties as old as year 1840, and 1870, 1890; they're not built to any code, sometimes built by owners with limited skills, sometimes built before indoor plumbing ( easy way to tell the only bath is on the first floor next to the kitchen and no baths on second floor where there are bedrooms. Also built before electricity, or central heat. Even houses built as late as the 1950 were built with two conductor ungrounded wire. And don't forget asbestos and lead based paint.

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David Krulac
Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
11mo
Buying newer properties built since year 2000, selling properties older than that. Have owned properties as old as year 1840, and 1870, 1890; they're not built to any code, sometimes built by owners with limited skills, sometimes built before indoor plumbing ( easy way to tell the only bath is on the first floor next to the kitchen and no baths on second floor where there are bedrooms. Also built before electricity, or central heat. Even houses built as late as the 1950 were built with two conductor ungrounded wire. And don't forget asbestos and lead based paint.
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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
11mo
We are being very conservative on pricing. Our primary focus is on buying non-performing loans which we are anticipating taking more of these properties back compared to prior years where we were able to work out more structure with the borrowers or have it sold at third-party auction that of course has other impacts such as making sure you have the right team not only internally but externally with property managers, contractors real estate agents on speed dial. This is a great question and I think a differentiator for real estate investors on being able to anticipate some of these changes and making sure you are ready if they occur. As we know, we cannot predict prices exactly on whether they are going up or going down, but they’re definitely trends you can follow and be prepared for specific situations.
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
11mo
Its become next to impossible to make ground up new construction multi-family work. Even heavy rehab multi family/mix-use has become challenging. Ground up and heave rehabs which are reliant on commercial construction codes are victims of tightening fire code requirements from sprinkler systems to fire rating separation. HVAC materials costs have skyrocketed which is another killer. These of course on top of the overall rise in labor and materials. Then you add the lengthier and more complex construction and stabilization process with higher debt costs. There's real headwinds in that space.

The one new construction multi-family that penciled for me was the result of a variance where I created significant value. Sadly, due to architect oversight there was a conflict between the zoning approvals and the building code which requires a pivot to a new design. I underwrote a ton of iterations from smaller multi-family to 22 townhomes and ultimately concluded building 15 luxury townhomes between 25-28 ft wide provided the best revenue against cost of all the options available. It was an eye opening exercise but helped reinforce why empty nester luxury townhomes/carriage homes are where companies like Toll Brothers are pouring significant resources. The numbers simply pencil better than anything else at the moment. Of course this is subject to owning land in the correct location too. At another site I pivoted from a 10 unit mix-use project to 2 luxury townhomes. Numbers simply worked better.
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