Real Estate Agent · Surf City, NC · Member since 2017 · 648 posts · 597 votes
6y
I am continuing to buy properties and help others do the same. Most investors that I am working with are targeting the B-C class neighborhoods and house hack properties. I just closed on our latest house hack deal a month ago and couldn't be happier!
I also stopped watching the news a few months ago which has helped a lot with my sanity haha
Rental Property Investor · Mount Dora, FL · Member since 2020 · 18 posts · 17 votes
6y
Hey @Paul DeSilva- Still planning on buying here in Central FL! If the deal works, then it works. I am underwriting deals with minimal to no increase in rents depending on the goals for the property. I am trying to close 5-20 units before the end of the year. I recently had 7 units under contract unfortunately the deal fell through the week of closing! :( I wish you the best on closing your 4 units.
Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
6y
I have a feeling if I wait for the market to drop again I could be waiting for ten years. All the while I would be missing out on all the wealth generators of owning real estate. So I will be buying more this year I just need to know that I can hold through some rocky times.
Investor · Columbus, GA · Member since 2018 · 9 posts · 9 votes
6y
We’re still actively pursuing deals although my partner and I have had to change how we evaluate them and the criteria we’re looking for because of the added risk.
On the underwriting side, we’re baking in a higher vacancy rate for the first two years especially when analyzing any deal because (1) some tenants are going to try to milk the system, it’s just a matter of facing reality and (2) this is going to add significant time to executing any value add plan if that involves turning units. We’re also accounting for much lower rent growth over the next few years and higher legal costs due to the expectation that we will have to go to housing court more than during “normal” times once the moratoriums have been lifted. We just had to adjust our offer price down on a property we are going under contract for shortly because of these assumptions, thankfully the seller has been reasonable though.
As for how our criteria has changed, we’re now heavily discounting properties that aren’t in the prime areas of town. We also want to make sure that the properties have essential ammenities like parking and laundry. Due to the fact that the screening process is going to become that much more important we want to position ourselves with properties that attract the most qualified tenant pool.
Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
6y
Closed on a house two weeks ago. We are going to offer it as a short term rental. The property is in a great location. Right in the middle of two universities and a major hospital. Less than three blocks from all three. I think COVID will be a net gain for my city so I am doubling down.
Rental Property Investor · Portland, OR · Member since 2015 · 96 posts · 23 votes
6y
I closed on a four-plex in late March (was under contract pre-covid) and have a two unit under contract right now (two houses on one property). I plan to use the new property as both a year round and vacation rental, with the main house serving as the year round rental and the second structure serving as a vacation rental.
@Dan Handford we have made tons of offers, most fell through for many different reasons, some almost grew legs and just one came to fruition, it's the typical deal funnel that @Brandon Turner talks about just on steroids, our market is seeing a huge boom in population growth mostly coming from people fleeing NYC and super limited inventory. Some deals are only on the market for a day or two and the others are going to bidding wars. We are not succumbing to the hype, we are making offers on the same kind of properties we always have using the same model we always have. If our numbers work we make the best offer that works for us. Maybe in 6-18 months we will pick up some of the scraps that everyone is fighting over now.
I'm absolutely not buying anything other than cash right now. And honestly, holding on cash offer buys as well unless its an outstanding deal. I've already had to deal with two tenants not paying and using Covid as an excuse when they were still working and not affected by the pandemic. One was ousted by their boss. The other tenant was ousted by their roommate. One tenant was taking the others half of the rent and not paying any of the rent to us. So aside from the guy not paying rent when he was working he was also stealing from the roommate. And yes I did my due diligence and credit/background on all these tenants.
These government blanket moratoriums are creating a huge problem with people taking advantage and testing the waters to see what they can get away with. Even with the people who are actually affected, how has it become the landlord's responsibility to bail the tenants out.
If there is a great deal, I will definitely jump on it. Otherwise, I will wait until at least they put some realistic moratorium or some form of rental assistance for those that really do need it.
We have been very fortunate and collected 100% of rents and have not had any vacancies in 6 months. Some tenants have paid 4 months in advance during the pandemic due to fear of losing their jobs. We screen very well (still some slip through the cracks from time to time) and I think that within a week or two the "blanket" moratoriums will be much more understood. There are hard and fast rules on who cannot be evicted and it has to be directly related to loss of income from COVID, not every tenant will be able to hide behind this ruling.
Hey @Paul DeSilva- Still planning on buying here in Central FL! If the deal works, then it works. I am underwriting deals with minimal to no increase in rents depending on the goals for the property. I am trying to close 5-20 units before the end of the year. I recently had 7 units under contract unfortunately the deal fell through the week of closing! :( I wish you the best on closing your 4 units.
Thank you Sir! we are not raising rents on any existing tenants and only plan on raising rents on turnovers in the near future. Good luck with your goals. We have also had several deals fall through. There is a good story on the current 4 unit but I am waiting to tell it until I close. Keep tuned in!
I have a feeling if I wait for the market to drop again I could be waiting for ten years. All the while I would be missing out on all the wealth generators of owning real estate. So I will be buying more this year I just need to know that I can hold through some rocky times.
We don't know what we don't know and no one knows when the market will drop, can we use best judgments and look at indicators, yes but we never really know and I would hate to miss out on anything while sitting on the sidelines.
Investor · New York, NY · Member since 2017 · 148 posts · 252 votes
6y
Originally posted by @Account Closed:
We’re still actively pursuing deals although my partner and I have had to change how we evaluate them and the criteria we’re looking for because of the added risk.
On the underwriting side, we’re baking in a higher vacancy rate for the first two years especially when analyzing any deal because (1) some tenants are going to try to milk the system, it’s just a matter of facing reality and (2) this is going to add significant time to executing any value add plan if that involves turning units. We’re also accounting for much lower rent growth over the next few years and higher legal costs due to the expectation that we will have to go to housing court more than during “normal” times once the moratoriums have been lifted. We just had to adjust our offer price down on a property we are going under contract for shortly because of these assumptions, thankfully the seller has been reasonable though.
As for how our criteria has changed, we’re now heavily discounting properties that aren’t in the prime areas of town. We also want to make sure that the properties have essential ammenities like parking and laundry. Due to the fact that the screening process is going to become that much more important we want to position ourselves with properties that attract the most qualified tenant pool.
Investor · New York, NY · Member since 2017 · 148 posts · 252 votes
6y
Originally posted by @Account Closed:
We’re still actively pursuing deals although my partner and I have had to change how we evaluate them and the criteria we’re looking for because of the added risk.
On the underwriting side, we’re baking in a higher vacancy rate for the first two years especially when analyzing any deal because (1) some tenants are going to try to milk the system, it’s just a matter of facing reality and (2) this is going to add significant time to executing any value add plan if that involves turning units. We’re also accounting for much lower rent growth over the next few years and higher legal costs due to the expectation that we will have to go to housing court more than during “normal” times once the moratoriums have been lifted. We just had to adjust our offer price down on a property we are going under contract for shortly because of these assumptions, thankfully the seller has been reasonable though.
As for how our criteria has changed, we’re now heavily discounting properties that aren’t in the prime areas of town. We also want to make sure that the properties have essential ammenities like parking and laundry. Due to the fact that the screening process is going to become that much more important we want to position ourselves with properties that attract the most qualified tenant pool.
We are seeing no vacancies and rents are going up dramatically in our area (we are not raising any rents right now) because of lack of inventory. Apartments have gone to bidding wars in some complexes from what I am hearing. Renters are leaving NYC in droves, by the thousands, most of them with good wfh jobs. The only reason that we would raise rents is because of increased costs of doing business, Apartments.com is now like highway robbery I might have to get a second mortgage just to list with them, Zillow is charging per day on market, Property management software prices are up, taxes and legal fees are going up, so on and so forth, but we are sticking to our guns and not raising rents on any of our existing tenants.
Closed on a house two weeks ago. We are going to offer it as a short term rental. The property is in a great location. Right in the middle of two universities and a major hospital. Less than three blocks from all three. I think COVID will be a net gain for my city so I am doubling down.
Cngrats! Personally we are staying away from STR's the rules have not been very owner friendly in our area lately, and we are staying far away from college rentals. The schools in NY still do not know what they are doing and how many students will be taking in person courses. I'm sure that you have done your due diligence and I most likely will work in your market, for us it's too risky here.
Investor · New York, NY · Member since 2017 · 148 posts · 252 votes
6y
@Todd Ashley Awesome and that sounds like a great strategy!
@Scott Garrels For sure lots of FOMO and the media is one of the biggest culprits during all of 2020!
@Account Closed I think anyone who has done their due diligence and following their plan. I believe that this will pass and we will come out stronger and more knowledgeable, I never bet against America!