What is the most under realized opportunity in real estate today?

147 Replies

Originally posted by @Jay Hinrichs :
Originally posted by @Jim K.:

@Amy Raye Rogers

Amy, there is no BEST opportunity. There are a bunch of low-probability ways and a few high-probability ways. So many people use the idea that they haven't found the very best opportunity, the absolute right way, as an excuse to sit on the sidelines. It's really another form of analysis paralysis: "I don't know what the best way forward is, so I'll do NOTHING."

Americans especially seem to love to say things to themselves like, "You've got to be in the RIGHT place, at the RIGHT time, with the RIGHT idea..." No, that's a dream of unearned success, or often something successful people say well after the fact. My own father lived by the lazy man's mantra: "Work smarter, not harder..." It certainly didn't work, I paid to put him in the ground.

Hard work plays a part. Persistence plays a part. Careful planning plays a part. Luck plays a part. Control what you can control. Stop pretending you can control the rest.

Sure, you should study, critically examine what you learn, and wait for what looks like a good opportunity, but at some point you have to take a risk and make a move. In the beginning, especially, you have to be willing to fail and be willing to change direction. You have to submit to the learning curve and pay your dues. The people around you will likely feel free to share their doubts to the point where you realize that they actually NEED to share their doubts with other people in order to justify their own mediocrity to themselves. Or even worse, you might surround yourself with "yes-people" who would give you a thumbs-up every step of the way off a cliff.

And in the end, your right move is guaranteed not someone else's right move. Your financial and life goals are yours, not everyone's. Those who seem most certain are often those who know the least: "the best lack all conviction, while the worst are full of passionate intensity." Yet another doubt-filled reality you have to live with to get into this business.

Good luck!

Underutilized  ??  I dont see rental properties being underutilized I see them as fully utililized.

I think forest land in the right areas are very much underutilized and not something 99% of investors have a clue about.

That would be me in the 99%. However land/lot for me is fun and absolutely the easiest money per touch but don't tell anyone. Thanks!

Originally posted by @Matt R. :
Originally posted by @Jay Hinrichs:
Originally posted by @Jim K.:

@Amy Raye Rogers

Amy, there is no BEST opportunity. There are a bunch of low-probability ways and a few high-probability ways. So many people use the idea that they haven't found the very best opportunity, the absolute right way, as an excuse to sit on the sidelines. It's really another form of analysis paralysis: "I don't know what the best way forward is, so I'll do NOTHING."

Americans especially seem to love to say things to themselves like, "You've got to be in the RIGHT place, at the RIGHT time, with the RIGHT idea..." No, that's a dream of unearned success, or often something successful people say well after the fact. My own father lived by the lazy man's mantra: "Work smarter, not harder..." It certainly didn't work, I paid to put him in the ground.

Hard work plays a part. Persistence plays a part. Careful planning plays a part. Luck plays a part. Control what you can control. Stop pretending you can control the rest.

Sure, you should study, critically examine what you learn, and wait for what looks like a good opportunity, but at some point you have to take a risk and make a move. In the beginning, especially, you have to be willing to fail and be willing to change direction. You have to submit to the learning curve and pay your dues. The people around you will likely feel free to share their doubts to the point where you realize that they actually NEED to share their doubts with other people in order to justify their own mediocrity to themselves. Or even worse, you might surround yourself with "yes-people" who would give you a thumbs-up every step of the way off a cliff.

And in the end, your right move is guaranteed not someone else's right move. Your financial and life goals are yours, not everyone's. Those who seem most certain are often those who know the least: "the best lack all conviction, while the worst are full of passionate intensity." Yet another doubt-filled reality you have to live with to get into this business.

Good luck!

Underutilized  ??  I dont see rental properties being underutilized I see them as fully utililized.

I think forest land in the right areas are very much underutilized and not something 99% of investors have a clue about.

That would be me in the 99%. However land/lot for me is fun and absolutely the easiest money per touch but don't tell anyone. Thanks!

Wait till you snag one that has Timber that NO ONE has a clue to the value !!!  

@Amy Raye Rogers

ADU's. I'm working on applying for one right now in the city of Minneapolis. The beautiful part is how much they've loosened the building codes for a more density rental population. Beauty is I don't have to pay for more land.

Originally posted by @Marcus Johnson :

@Amy Raye Rogers

ADU's. I'm working on applying for one right now in the city of Minneapolis. The beautiful part is how much they've loosened the building codes for a more density rental population. Beauty is I don't have to pay for more land.

ADUs are a burgeoning multi billion dollar industry. For example my friend converted his detached garage all in sub 30k and rents 2k. Not a bad start for his first rental.  

Good luck!

@jack Orthman No sir, not a trick question. 

You told @Joe S. "....changing your business model and mindset", to which I agree.

I didn't purchase a home for 35k, my question was about "investing 35k into a home". I invest 35k worth of furniture, set-up cost, supplies, etc, and then I allow professionals to rent the "furnished" home from me for $6,500-$7,500/month. I have 0 vacancy, and average stay is 5 months. 2 weeks prior to tenant leaving, I advertise the unit again, and within 4-5 days, we have a new professional who has signed a contract for that 6,500-7,500 range.

Why? Because I spent 2 years "selling" these companies the value of our company, and now the leads are RIDICULOUS! We can't keep up with demand. But that's not the point.

The point is, when you tell someone to change their mindset, and business model, I challenge you the same. Real estate can be accomplished in more ways then "multi-family", and I would argue, more profitable ways as well.

The larger building you purchase, the more funds you've spent. 

On the other end, 1 SFU house = 35k investment, period, and the "profit" (not income) is $1,500/monthly. I haven't seen anything close - yet. But I will continue to challenge myself to find the next best thing :)

Originally posted by @Jay Hinrichs :
Originally posted by @Matt R.:
Originally posted by @Jay Hinrichs:
Originally posted by @Jim K.:

@Amy Raye Rogers

Amy, there is no BEST opportunity. There are a bunch of low-probability ways and a few high-probability ways. So many people use the idea that they haven't found the very best opportunity, the absolute right way, as an excuse to sit on the sidelines. It's really another form of analysis paralysis: "I don't know what the best way forward is, so I'll do NOTHING."

Americans especially seem to love to say things to themselves like, "You've got to be in the RIGHT place, at the RIGHT time, with the RIGHT idea..." No, that's a dream of unearned success, or often something successful people say well after the fact. My own father lived by the lazy man's mantra: "Work smarter, not harder..." It certainly didn't work, I paid to put him in the ground.

Hard work plays a part. Persistence plays a part. Careful planning plays a part. Luck plays a part. Control what you can control. Stop pretending you can control the rest.

Sure, you should study, critically examine what you learn, and wait for what looks like a good opportunity, but at some point you have to take a risk and make a move. In the beginning, especially, you have to be willing to fail and be willing to change direction. You have to submit to the learning curve and pay your dues. The people around you will likely feel free to share their doubts to the point where you realize that they actually NEED to share their doubts with other people in order to justify their own mediocrity to themselves. Or even worse, you might surround yourself with "yes-people" who would give you a thumbs-up every step of the way off a cliff.

And in the end, your right move is guaranteed not someone else's right move. Your financial and life goals are yours, not everyone's. Those who seem most certain are often those who know the least: "the best lack all conviction, while the worst are full of passionate intensity." Yet another doubt-filled reality you have to live with to get into this business.

Good luck!

Underutilized  ??  I dont see rental properties being underutilized I see them as fully utililized.

I think forest land in the right areas are very much underutilized and not something 99% of investors have a clue about.

That would be me in the 99%. However land/lot for me is fun and absolutely the easiest money per touch but don't tell anyone. Thanks!

Wait till you snag one that has Timber that NO ONE has a clue to the value !!!  

Kind of a hybrid between ADUs and land is something I'm exploring with my more rural sfrs. Many of the homes are older and the lots are large.  Adjacent on more than one side are extra platted lots making for an enormous yard far away from their house.  Every 3 I have = an additional buildable one.  At least some to keep if I sell the rentals.

In general I like looking to repurpose commercial and industrial properties.  Offering on one now that has a mobile, large shop, outbuildings and a few orchard acres with commercial zoning for future apts maybe.  The orchard is currently leased to a grower for some yield with no work. 

Anything more interesting with less competition than vanilla houses or multis for me right now. 

Originally posted by @Steve Vaughan :
Originally posted by @Jay Hinrichs:
Originally posted by @Matt R.:
Originally posted by @Jay Hinrichs:
Originally posted by @Jim K.:

@Amy Raye Rogers

Amy, there is no BEST opportunity. There are a bunch of low-probability ways and a few high-probability ways. So many people use the idea that they haven't found the very best opportunity, the absolute right way, as an excuse to sit on the sidelines. It's really another form of analysis paralysis: "I don't know what the best way forward is, so I'll do NOTHING."

Americans especially seem to love to say things to themselves like, "You've got to be in the RIGHT place, at the RIGHT time, with the RIGHT idea..." No, that's a dream of unearned success, or often something successful people say well after the fact. My own father lived by the lazy man's mantra: "Work smarter, not harder..." It certainly didn't work, I paid to put him in the ground.

Hard work plays a part. Persistence plays a part. Careful planning plays a part. Luck plays a part. Control what you can control. Stop pretending you can control the rest.

Sure, you should study, critically examine what you learn, and wait for what looks like a good opportunity, but at some point you have to take a risk and make a move. In the beginning, especially, you have to be willing to fail and be willing to change direction. You have to submit to the learning curve and pay your dues. The people around you will likely feel free to share their doubts to the point where you realize that they actually NEED to share their doubts with other people in order to justify their own mediocrity to themselves. Or even worse, you might surround yourself with "yes-people" who would give you a thumbs-up every step of the way off a cliff.

And in the end, your right move is guaranteed not someone else's right move. Your financial and life goals are yours, not everyone's. Those who seem most certain are often those who know the least: "the best lack all conviction, while the worst are full of passionate intensity." Yet another doubt-filled reality you have to live with to get into this business.

Good luck!

Underutilized  ??  I dont see rental properties being underutilized I see them as fully utililized.

I think forest land in the right areas are very much underutilized and not something 99% of investors have a clue about.

That would be me in the 99%. However land/lot for me is fun and absolutely the easiest money per touch but don't tell anyone. Thanks!

Wait till you snag one that has Timber that NO ONE has a clue to the value !!!  

Kind of a hybrid between ADUs and land is something I'm exploring with my more rural sfrs. Many of the homes are older and the lots are large.  Adjacent on more than one side are extra platted lots making for an enormous yard far away from their house.  Every 3 I have = an additional buildable one.  At least some to keep if I sell the rentals.

In general I like looking to repurpose commercial and industrial properties.  Offering on one now that has a mobile, large shop, outbuildings and a few orchard acres with commercial zoning for future apts maybe.  The orchard is currently leased to a grower for some yield with no work. 

Anything more interesting with less competition than vanilla houses or multis for me right now. 

Love it. 

There is no one right way to make money in real estate. Anyone who says differently either has something to sell you, is self-absorbed and arrogant, misinformed, or just a fool. There's too many variables such as: access to capital; your own investing preferences; your tolerance for risk; your preferred geographic area; tax implications; ETC.

As for underutilized, I'm not sure there is/was ever anything. There's always someone who knows some way of making money :)

Originally posted by @Bob Wilson :

@jack Orthman No sir, not a trick question. 

You told @Joe S. "....changing your business model and mindset", to which I agree.

I didn't purchase a home for 35k, my question was about "investing 35k into a home". I invest 35k worth of furniture, set-up cost, supplies, etc, and then I allow professionals to rent the "furnished" home from me for $6,500-$7,500/month. I have 0 vacancy, and average stay is 5 months. 2 weeks prior to tenant leaving, I advertise the unit again, and within 4-5 days, we have a new professional who has signed a contract for that 6,500-7,500 range.

Why? Because I spent 2 years "selling" these companies the value of our company, and now the leads are RIDICULOUS! We can't keep up with demand. But that's not the point.

The point is, when you tell someone to change their mindset, and business model, I challenge you the same. Real estate can be accomplished in more ways then "multi-family", and I would argue, more profitable ways as well.

The larger building you purchase, the more funds you've spent. 

On the other end, 1 SFU house = 35k investment, period, and the "profit" (not income) is $1,500/monthly. I haven't seen anything close - yet. But I will continue to challenge myself to find the next best thing :)

Your business model, or market niche sounds great. I commend you for your persistence to convince other companies. I am guessing that you mean it took two years to convince other property owners? If I am correct, you are renting homes from other property owners, putting your furniture in those homes and you are renting the homes to people like nurses and doctors who stay for for up to 5 months and they pay $6500 to $7500 per month.  

I went to a REIA club about 3 or 4 years ago where they brought in one of those gurus who sell their secrets, books and videos pertaining to exactly what you described, if I am correct, Virtually, I never purchase those types of courses, but I did pay $900 for this course and it described exactly what you described.

I got all excited and even wrote about the concept on another forum telling people that they didn't have to actually purchase property and could use other people's property, buy some furniture, jack up the rent and make a profit.

I will give you credit for following through. As for challenging me to change my business model to do the same, I'm all ears and have no problem with that, I suppose all I need to do is furnish some of the units I already own and see if people are willing to pay a significant amount more for the rent.

I tried doing what was in my $900 course and there was two snags I ran into. One was that there was a significant cost to make the units ADA compliant because I would have to make doorways and bathrooms larger for wheel chairs and the other was I tried to contact the list of agencies provided with the course and I hit a dead end on that after sending letters written exactly like a template provided with the course and I never received one response. So, when you challenge  me to change my business model I am exactly the type person who will re-write my business model to add to it and do what you do providing I can learn exactly what you are doing and I have to feel very confident before I commit to spending $35,000.

What you are doing is sort of a market niche, your arena and now your forte. I need a lot more information and have absolutely with adding one more arm reaching out to increase my profits. Who knows? Two of my brats just left for colleges in Columbus Ohio and Fairbanks Alaska and I don't have a very good feeling about their liking the universities they are going to. Especially my daughter who went to Alaska where the temperature drops to 50 below zero. I am always thinking it would be nice to have them help or work in the real estate business and what you are doing is a market niche that seems viable and profitable.

Share more information, if you would like to.

Thank you very much.

Every market is different.  It just depends on the individual's financial situation and personal goals.

In Los Angeles, I look for properties that have issues that can be fixed.  For example dysfunctional floorplans, excessively dark inside when it can easily be solved, etc.  I had a house hacking client buy a condo for $15K less than another unit in the building and it is larger!  All because the condo didn't present well.  We knew it was a great deal because she was able to get an appraisal waiver.

You don't know what you don't know…

When I was 24, my sister-in-law was going to University that year with 5 friends, I bought a house in a University town that year and rented it to them. Looking back I made some glaring mistakes trying to figure it out.

  • I bought it too far away from school.
  • I paid too much for the property, and
  • the basement flooded 3 times.

I spent an entire summer of my life fixing this house that was literally 2 hours away.

Yet little by little I started to figure it out. After a couple of semesters I knew

  • how much rent to charge,
  • The better locations,
  • how to structure the lease

and ….most important

how to fill the property with students !

I’ve bought 11 student houses since then,

the key was jumping on the opportunity when it presented itself.

Opportunities come around every day (SF, Multi, commercial) 

The secret is… being able to spot them


Originally posted by @Jack Orthman :
Originally posted by @Bob Wilson:

@jack Orthman No sir, not a trick question. 

You told @Joe S. "....changing your business model and mindset", to which I agree.

I didn't purchase a home for 35k, my question was about "investing 35k into a home". I invest 35k worth of furniture, set-up cost, supplies, etc, and then I allow professionals to rent the "furnished" home from me for $6,500-$7,500/month. I have 0 vacancy, and average stay is 5 months. 2 weeks prior to tenant leaving, I advertise the unit again, and within 4-5 days, we have a new professional who has signed a contract for that 6,500-7,500 range.

Why? Because I spent 2 years "selling" these companies the value of our company, and now the leads are RIDICULOUS! We can't keep up with demand. But that's not the point.

The point is, when you tell someone to change their mindset, and business model, I challenge you the same. Real estate can be accomplished in more ways then "multi-family", and I would argue, more profitable ways as well.

The larger building you purchase, the more funds you've spent. 

On the other end, 1 SFU house = 35k investment, period, and the "profit" (not income) is $1,500/monthly. I haven't seen anything close - yet. But I will continue to challenge myself to find the next best thing :)

Your business model, or market niche sounds great. I commend you for your persistence to convince other companies. I am guessing that you mean it took two years to convince other property owners? If I am correct, you are renting homes from other property owners, putting your furniture in those homes and you are renting the homes to people like nurses and doctors who stay for for up to 5 months and they pay $6500 to $7500 per month.  

I went to a REIA club about 3 or 4 years ago where they brought in one of those gurus who sell their secrets, books and videos pertaining to exactly what you described, if I am correct, Virtually, I never purchase those types of courses, but I did pay $900 for this course and it described exactly what you described.

I got all excited and even wrote about the concept on another forum telling people that they didn't have to actually purchase property and could use other people's property, buy some furniture, jack up the rent and make a profit.

I will give you credit for following through. As for challenging me to change my business model to do the same, I'm all ears and have no problem with that, I suppose all I need to do is furnish some of the units I already own and see if people are willing to pay a significant amount more for the rent.

I tried doing what was in my $900 course and there was two snags I ran into. One was that there was a significant cost to make the units ADA compliant because I would have to make doorways and bathrooms larger for wheel chairs and the other was I tried to contact the list of agencies provided with the course and I hit a dead end on that after sending letters written exactly like a template provided with the course and I never received one response. So, when you challenge  me to change my business model I am exactly the type person who will re-write my business model to add to it and do what you do providing I can learn exactly what you are doing and I have to feel very confident before I commit to spending $35,000.

What you are doing is sort of a market niche, your arena and now your forte. I need a lot more information and have absolutely with adding one more arm reaching out to increase my profits. Who knows? Two of my brats just left for colleges in Columbus Ohio and Fairbanks Alaska and I don't have a very good feeling about their liking the universities they are going to. Especially my daughter who went to Alaska where the temperature drops to 50 below zero. I am always thinking it would be nice to have them help or work in the real estate business and what you are doing is a market niche that seems viable and profitable.

Share more information, if you would like to.

Thank you very much.

I don't know much about the Blackstone thing everyone is talking about.  Probably because I've not listened or watched the news in over a year.  Send me a link about that, seems interesting.  

I know volume covers a multitude of sins, and 6 billion seems like pretty good volume.  

Its not just about ROIs and Cap rates and such.  Opportunities come in all types, some might lend more to someones strengths, and that's a good investment.  I know people that have gotten into real estate and even though they made money, said they didn't like it at all.  

the most under realized  opportunity is the one that everyone is probably taking a dump on right now.  Just have to wait on it to recognize the potential.  Time is the real estate investors friend.  And his buddy - Timing

Originally posted by @Andrew Maxion :

I love how many folks are pointing out ADUs! Either attached, JADU, detached ADU, this is a wonderful way to take advantage of land you already own and scale your portfolio!

 When you consider what it would cost to buy a lot from scratch if it even existed in the area and build in LA or SF a free standing small sqft rental. 

Idk what that would cost but 400-500k after everything I think is min. To be able to have close to samething rent wise for lets say 50k on the very cheap with a existing detached garage style, the math starts to make a lot of sense there. 

Granted you need the primary first and in calif 6.8 million already do. In total it might represent the biggest land grab of all time value wise. However the land in theory is already grabbed, roads and utilities already paid for. Classic value add built in times 6.8 mil. State is likely loving all the reassessments coming. 

Wow, fascinating feedback regarding the REIA club experience and $900 course.

To answer your initial question, the 2 years was to convince companies to trust our brand, vs using the hotels they currently were using. We landed a minor league sports contract, and the rest was history because we name dropped (as you can imagine) when pitching other organizations, and credibility was instant based on the "sports team" acquisition.  

True, I'm over-simplifying the foundation (initial 2 years), because it was A LOT of work, but I felt the vision could be successful based on the data sample my wife and I performed in 2017 with corporate housing. Long story short, we earned about 9k, in about 30 days, and I said that's it! I think this is a viable real estate business. 

While not opposed, we've never knowingly rented to a medical professional, yet. No reason, just circumstantial. Our clients have been professionals in other industries, and we have a nice SEO team that gets us phone calls weekly from general google searches, so that's been nice. 80% of our traffic is word of mouth and relationships now. We've spent time getting on weekly fliers inside these organizations, and get calls weekly from this. Again, A LOT of work, but it has truly paid off.

To answer your 2nd question, we like purchasing homes, but recently due to Covid, one investor (colleague) who owns 2k homes, told us that he got screwed through Covid, and he was changing his model. He asked can he diversify, and allow us to rent 25% of his homes vs his traditional tenants (corporate lease w/our company). Obviously the conversation was much longer, and in depth, this is cliff note version. So we tried this early 2021, and its been FANTASTIC. We don't cover any major cost in repairs, but lock in 3 year lease contracts with owner, and our expenses average $2500-3k out the door. That leaves our company with a 3-4k profit. That's typical.

When investors pay the 35k set-up, we split profits, hence the $1,500 profit number mentioned earlier. This part is new for us, because for 3 years now, we've invested the 35k per unit. Now we're open to working with investors to expand quicker....and because now we have a colleague throwing homes as us, so he can lower his risk.


As far as REIA and that $900 course, I've never been to such a conference, my origin story is a bit unique, I won't bore anyone, we can talk offline about this. As far as "snag", we haven't turned any home into a ADA compliant space. Curious as to the background on this topic.


Overall, you are correct, there is much more info involved in this operation, a forum isn't the platform to break it all down, but if you want, let's connect offline for context. We can cover much more info quickly via phone call/zoom then typing. 

Down the road, can't wait to hear how the Alaska journey was for your daughter, sounds like an experience :)

Looking under rocks or just getting lucky finding deals like this. 23 cap set of 4 plex off market find. 

Originally posted by @Joseph Hammel :

Looking under rocks or just getting lucky finding deals like this. 23 cap set of 4 plex off market find. 

I never saw something like this. Where is this so I can go but 50 of them?

Attached, is an image showing how you will come out if you raise the rents only $40 when you close escrow and raise the rents only $40 per year and I used a Gross Multiplier of 15 that may be a little lower. In California we are using 18 to 21 for middle income properties. Back in 2001, when people did not know so much about multi-unit properties and they were not so sought after the Gross Multiplier was 6 to 9 for middle income properties. The Gross Multiplier is only a Rule of Thumb view for indicating the sale price of a property, but it does have a strong impact when buyers are searching through listings.

Personally, I like the Gross Multiplier much better than the Cap Rate because the Gross Multiplier tells me instantly how the price compares with the income of similar properties in the neighborhood. When buying a property we look for a lower Gross Multiplier meaning we buyers would rather pay 6 times the Annual Gross Income vs. 15 times and when we are selling a property we want a higher gross multiplier meaning we want to sell our property for 15 times the Annual Gross Income.

Theoretically, at the end of 5 years you should earn about $306,480. Not bad. Especially with such a low down payment. 

Can't do that with a single family home. Sorry! Just like to rub it in so people start to see the light!!!

Missed a serious point. You put only $32,000 down on this property and made a profit of $59,000 your first year. That means you recovered $59,000 / $32,000 = 84%. That means you recovered 84$ of your down payment the first year and if you really want to get serious with the math you recovered about 50% of that 84% when you raised the rents only $40 the day you closed escrow. This is not a fluke. This happens all the time. Show me a single family house where you recover 50% of your down payment the day you close escrow and 84% by the end of the first year. By the and of about 15 months your recover 100% of your down payment. I get excited doing the calculations for this property and I've been doing this for several years.

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