Investor · Ewa Beach, HI · Member since 2016 · 68 posts · 26 votes
So we've spent the last 7 months looking at deals daily. We have run the calculator on this site to the point I don't even need to think to put in the numbers...but literally nothing has panned out. 5 cities, 600+ properties looked at, ~50 offers made using numbers that make sense (~10 at full asking) and literally nothing.
What to do now? I am all for "keep on trying" but something isn't right. Am i being naive or are others having the same issue? I go to meet ups or listen to podcasts and webinars and see all of these deals out there everyone is getting but not one has worked out using realistic numbers for us.
Money is also not an issue for us as it is for some...at this point we have enough to pay cash for some of these places we offer on but obviously that doesn't make sense for an investment property...
At this point I am wanting to give up on the buy and hold option and find something else...thoughts?
So we've spent the last 7 months looking at deals daily. We have run the calculator on this site to the point I don't even need to think to put in the numbers...but literally nothing has panned out. 5 cities, 600+ properties looked at, ~50 offers made using numbers that make sense (~10 at full asking) and literally nothing.
What to do now? I am all for "keep on trying" but something isn't right. Am i being naive or are others having the same issue? I go to meet ups or listen to podcasts and webinars and see all of these deals out there everyone is getting but not one has worked out using realistic numbers for us.
Money is also not an issue for us as it is for some...at this point we have enough to pay cash for some of these places we offer on but obviously that doesn't make sense for an investment property...
At this point I am wanting to give up on the buy and hold option and find something else...thoughts?
It sounds to me like your expectations need an adjustment.
What are your goals when it comes to owning rental property? Is it to quit your day job or to leverage additional capital to build long term wealth?
You won't be raking in cash by buying a few rental properties. Instead you will benefit long term by building wealth and lowering your tax burden in the process. Think long term, think OPM
OPM (Other People's Money)
You can obtain up to 10 30yr mortgages in your name. If you are married that's 10 for you & 10 for your wife. Assuming you both live in your own home that puts you as a couple at 19 residential mortgages. You will need to put down between 15-25%. The rest will be lent to you by the bank and the bank will be paid by your tenants.
Assuming you purchased 19 single family homes at 100k a piece that would be a capital output of $285,000 to own a portfolio valued at $1.9M. When you are ready to retire assuming zero appreciation & zero rental cash flow throughout the years you will still clear $1.6M+ more than what you paid.
I would lean on your network of contacts (wholesalers, real estate agents, etc) and put them to work to find you a deal. I'm not sure exactly how you're finding the houses you make offers on, but let someone else do the work and bring you something that works where they can also get a piece of the action. You may not get quite the 'buy' you were looking for, but you also didn't spend 7 months making 50 offers with no result. I would rather pay someone a fee to bring me a deal than spend dozens or hundreds of hours trying to find one for myself.
Also, your idea of what makes financial sense might be a bit unrealistic for the current market. So if you want to keep buying and investing (most successful investors I know invest in every market), you have to adjust to the current market.
@Farakh Zaman I agree that maybe you're not doing it right--are you providing proof of funds/preapproval with your offers? Are you working with the listing agent? This might improve your chances of snagging a deal.
Also, you could house hack in Hawaii with a VA loan, then rent out the whole house once you leave. You will win long-term in appreciation, and as long as the rents cover the costs, can't lose.
Or the vacation rental idea will make you money and allow you a place to vacation with write offs!
Re: insurance USAA can't be beat for condos, but in Hawaii they are way overpriced for SFH. Try State Farm instead.
Hey @Farakh Zaman, I spent a week in Ewa Beach a couple years ago with a friend who was local and I can't wait to go back. I live in Fort Collins now and I hear you, it is a struggle to lock down a property anywhere in Colorado. When I was making offers last year, what I experienced was that most of the other investors were cash buyers so that really isn't a differentiating factor the way it could be in other markets. My idea has been to 1. Do the market research, 2. Make a plan, 3. Take action, 4. Be flexible, 5. Revise plan, 6. Repeat
Since you're open to other markets I think you should find a market where you can purchase a property that will help you meet your goals. After going through what you went through in Colorado I chose Memphis and it has been very good to us.
I am curious why you would try to invest in a town like Springfield, MO? Do you have family from that area or are you originally from that area? It's kind of an odd town to just randomly pick to invest in especially given the crime rate.