Sold a property and looking to reinvest

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Sold a property and looking to reinvest

Marylynn B.
Investor · Frederick, MD · Member since 2012 · 160 posts · 31 votes

Hello everyone,

I just sold one of my properties and I am looking to re-invest. I have some cash and I am looking for the best way to utilize it to my advantages. I know there are many options but looking to leverage it as much as possible. There has been recent discussion on being "debt free". I have a small mortgage on my primary residence; own my other property and other assets outright. With interest rates so low it seems to make sense to keep money invested in either real estate or the market. I guess that "rich dad poor dad" book I read years ago made an impression. Anyway, having cash should present me with some advantages. My issue is this, is in finding the opportunities. for either buying below market value SFH or multi-families.

Question 1. I have found that opportunities found on mls, zillow, foreclosure or other "mainstream" sites are outdated and not always the best deals.  Where are these deals? Is it watching a pre-foreclosure? I have seen the tragedies in auctions and not sure I want that route :)

Question 2.  In the past year however,  my focus was multi-families for cash flow and appreciation.   I was actively viewing the mls for multi-families is the best route?

When seeing a foreclosed multi-family, it  has always puts a question in my mind if they foreclosed was it for a reason  I would be inheriting.   When it all comes down to it I can run the numbers.

Anyway, I have been out of actively purchasing investment properties for some years and times have changed, so if you could be so kind as to share where I should put my research efforts it would be so appreciated.   :)

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Liz Faircloth
Real Estate Investor · New Hope, PA · Member since 2014 · 193 posts · 113 votes
12y

Hi Marylyn,

How exciting! We have a lot of experience buying multi family properties over the years. Early on I would say the biggest mistake we made was purchasing too high. Another great strategy is to find a target area. Once you have chosen a target area, you can drive around that area and look for distressed multifamilies. Then write down the addresses and do the research on who owns the property and reach out to them. The MLS is super helpful to run comps. We have also purchased many properties through the MLS as long as you get it at the right price. We have also found that the best deals we have gotten on multi-families are ones that need a lot of work.

Hope this helps!

Liz Faircloth

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  • Liz Faircloth
    Real Estate Investor · New Hope, PA · Member since 2014 · 193 posts · 113 votes
    12y

    Hi Marylyn,

    How exciting! We have a lot of experience buying multi family properties over the years. Early on I would say the biggest mistake we made was purchasing too high. Another great strategy is to find a target area. Once you have chosen a target area, you can drive around that area and look for distressed multifamilies. Then write down the addresses and do the research on who owns the property and reach out to them. The MLS is super helpful to run comps. We have also purchased many properties through the MLS as long as you get it at the right price. We have also found that the best deals we have gotten on multi-families are ones that need a lot of work.

    Hope this helps!

    Liz Faircloth

    2Reply
  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    12y

    @Marylynn B. welcome to the site.

    1Reply
  • Marylynn B.
    OP
    Investor · Frederick, MD · Member since 2012 · 160 posts · 31 votes
    12y
    Originally posted by @Liz Faircloth:

    Hi Marylyn,

    How exciting! We have a lot of experience buying multi family properties over the years. Early on I would say the biggest mistake we made was purchasing too high. Another great strategy is to find a target area. Once you have chosen a target area, you can drive around that area and look for distressed multifamilies. Then write down the addresses and do the research on who owns the property and reach out to them. The MLS is super helpful to run comps. We have also purchased many properties through the MLS as long as you get it at the right price. We have also found that the best deals we have gotten on multi-families are ones that need a lot of work.

    Hope this helps!

    Liz Faircloth

     Yes that is my concern is overpaying.  Tell me do you do the property management or manage yourself?  I have done both and see the pros and cons of each and would be interested in your opinion.

    0Reply
  • Marylynn B.
    OP
    Investor · Frederick, MD · Member since 2012 · 160 posts · 31 votes
    12y
    Originally posted by @James Wise:

    @Marylynn B. welcome to the site.

     Thank you so much James!

    0Reply
  • Dick RosenPro Member
    Property Manager · Gilbert, AZ · Member since 2009 · 1k+ posts · 451 votes
    12y
    Originally posted by @Marylynn B.:

    There has been recent discussion on being "debt free".  I have a small mortgage on my primary residence; own my other property and other assets outright. 

    Pay it off Marylyn... be debt free and put those payments that you are use to in savings for your next purchase while your doing your research. I am a firm believer in the debt free strategy!

    0Reply
  • Liz Faircloth
    Real Estate Investor · New Hope, PA · Member since 2014 · 193 posts · 113 votes
    12y

    Hi Marylyn,

    Glad to help.  Yes, we do manage over 100 units ourselves. We have a team (book-keeper and property manager) that is on the front lines of dealing with tenants , etc.  We have always managed our own properties.  We have worked hard to set up systems and processes to help. My husband's (Matt Faircloth) blog contribution this week is actually sharing tools and services that we use to help us streamline and improve our image as a Landlord over the years.  And I am in the process of pulling together a Property Management manual that is where we have all of our forms, processes and documents on managing our properties. 

    I would be happy to connect here on Bigger Pockets and help further! Let me know!

    Best,

    Liz

    1Reply
  • Marylynn B.
    OP
    Investor · Frederick, MD · Member since 2012 · 160 posts · 31 votes
    12y
    Originally posted by @Dick Rosen:
    Originally posted by @Marylynn B.:

    There has been recent discussion on being "debt free".  I have a small mortgage on my primary residence; own my other property and other assets outright. 

    Pay it off Marylyn... be debt free and put those payments that you are use to in savings for your next purchase while your doing your research. I am a firm believer in the debt free strategy!

     Interesting, why is that?

    The funds I have in the market are making more than the interest  on my mortgage-would you suggest that one takes it out of the market to pay off their mortgage?  In addition capital gains tax has risen this past year. I am just curious as to your reasoning perhaps I am missing something. I appreciate your insight.

    0Reply
  • Anita Oakley
    Real Estate Investor · Manhattan Beach, CA · Member since 2012 · 22 posts · 3 votes
    12y

    @Marylynn B. 

    For buy and hold, I have had success with Loopnet. 

    0Reply
  • Anita Oakley
    Real Estate Investor · Manhattan Beach, CA · Member since 2012 · 22 posts · 3 votes
    12y

    @Marylynn B. 

    I am also a big fan of being highly leveraged. This strategy allows for more dollars to be out there working for you instead of being trapped in the walls of a structure. I understand the desire to want to have property paid off too though, it just doesn't make sense for me. 

    1Reply
  • Marylynn B.
    OP
    Investor · Frederick, MD · Member since 2012 · 160 posts · 31 votes
    12y

    Thank you @Anita Oakley, I appreciate your input!

    0Reply
  • Shane Pearlman
    Rental Property Investor · Las Palmas de Gran Canaria · Member since 2014 · 220 posts · 256 votes
    12y

    @Marylynn B. I just went through this exact debate with my partners. I leave in 20m to sign the closing papers on a single family property which has turned a really solid profit. Do we apply the funds to an existing loan or increase our leverage and buy up? After a lot of debate, we decided that I'd like to control more profitable assets with 4-5% loans while the opportunity remains. The 1031 aspect gives us so much more reach, although that time limit freaks me out (tick tock, tick tock).

    It sound like you know how to hunt down properties. It is a matter of how much you trust your spreadsheets, how much buffer you give yourself, and knowing what the risks are in the properties. I mostly see people on BP talk about getting in trouble when they skip the steps or compromise their rules for "a deal". The other key in shifting to MF is to figure out what you want out of the experience for your lifestyle. 

    I personally need additional time more than I need a small / mid size increase in revenue at this point in my career. That is a big change from where I was at 7 years ago when I started investing in properties. When I look at deals then, they have to have both property management and the maintenance / capex built in correctly. I'm also cautious about the tenants we inherit.

    I look forward to hearing about what deal you decide to chase.

    1Reply
  • Marylynn B.
    OP
    Investor · Frederick, MD · Member since 2012 · 160 posts · 31 votes
    12y

    Thank you @Shane Pearlman, and @Anita Oakle.  A factor in no interest of paying off my primary residence is my plan to move in 2 years and do not want funds tied up in that property.  I guess if I planned to live there forever I might feel differently.  As you said with interest rates as low as they are, it is difficult to not take advantage of it.

    It is interesting @Shane Pearlman  about how things changed over the past 7 years for you.  I know when I did my very first investment 18 years ago I was much more tolerant for risk, of course I had nothing to lose. ( Ahh the beauty of youth) Now I find I am not only much more conservative, I also am less tolerant of time taken away from my family and other pursuits.  I hate wasting time as much as money.  You bring up some excellent points that I need to consider, thank you.

    0Reply
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