Are people finding it harder to find deals these days?

[Adriaan Sierra]

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

[Eliott Elias]

I had a slow month as well, but because I was a lot more picky. I changed my buying formula and will not be buying unless my metrics are hit. More quality than quantity right now.

[James Wise]

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

 market goes up, market goes down. Buy low and sell high playa.

[Carlos Ptriawan]

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

 recipe: I am focusing on DOM>30 days, probate sale only or fixer-upper. I still see lot more deals compare to early 2022. Actually there're so many deals for fixer upper esp Nov. last year. 

[Carlos Ptriawan]

Quote from @James Wise:

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

 market goes up, market goes down. Buy low and sell high playa.

 this is the most professional answer , buy low and sell high in almost everything.

Not necessarily just for real estate, lot of things are considerably very cheap these days, but folks are focusing on the expensive part only lol

[Steve Vaughan]

Yeah, if you are struggling to find deals in Cleveland... 

you might be a.. er, want to sell some of your least favorite and invest in a different asset class altogether.  

Buy low and sell high.  Some of us sold a ton last year.   

[Brad Jacobson]

Even though prices are definitely lower, affordability (our in the investor world, cashflow) has remained the same.  Prices are only lower because of the rate hikes, there's been no change in demand.

Finding deals is about the same level of difficult as it has been for the past few years.  However, it is better to buy lower with a higher rate than higher with a lower rate because the real wealth you will build is in asset appreciation!  Keep working, keep buying, good luck!

[Shane Kelly]

I've been wondering who the people buying in Lakewood are myself. From what I've been able to gather, it's out of country or sometimes out of state buyers who really don't care what they're paying or making for that matter. They buy cash and they pay stupid prices. I don't try to compete in Lakewood anymore. I make use of my knowledge of the submarkets to try to find the only good deals that are left (which is not many nowadays).

[Neil Cronkrite]

It's tough for multifamily sellers to envision cap rate decompression on properties they bought on very low interest rates. The feeling then was: cost of capital is cheap, buy when you can! Now, the cost of capital is relatively much more expensive. I get it - it's tough to take a haircut, but expenses are up and rent growth has slowed. As others write, buy low, sell high. Or as Buffett said: be fearful when others are greedy. Be greedy when others are fearful. Or my new favorite phrase: run down the hall of indifference. 

[Joe Richissin]

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

 Definitely seeing the same pattern. The most frustrating part is seeing a MF occupied with tenants under a lease with 6+ months left, and the price of the mortgage would bury your cash flow based on the current rents. Yet, people are still buying.

[Nathan Harden]

Everything will Cash Flow with a large enough Down Payment.

Some investors are running to the hills right now, others are cleaning house. 

Personally, I would rather buy with high interest rates like now because the prices are down, down big in certain markets. 

Like others have said, Buy low, sell high.

Pick your poison. Buy with high interest rates, low prices and less competition. Or buy with low interest rates, over ask purchases and ample competition. 

[Ace Kaspar]

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

With how the market is right now, with high property values and higher interest rates than past years, it will be difficult to find those deals.

It was easy when interest rates were 2.5-4.0% but now that were around 6.5% it's not looking to hot in most areas.

You can always refinance but make sure your numbers make sense. Maybe your market is not the best to buy in right now and that is alright. There is always an area to buy in across the US, you just need to do your research and run the numbers.

[Balkar Singh Kang]

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

 @Adriaan,

I am new investor and purchased my first property in Garfield Heights area after struggling with the competition and fear being first time buyer. I waited until I found the property what meet my buying criteria. The property is generating about 13+ CAP at purchase. I am targeting 1 duplex at min this quarter.

[Bob Stevens]

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

 I can get as many as I want, BTW, BIG mistake focusing just on the west side, not a good strategy. 

[Bob Stevens]

Quote from @Ace Kaspar:

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

With how the market is right now, with high property values and higher interest rates than past years, it will be difficult to find those deals.

It was easy when interest rates were 2.5-4.0% but now that were around 6.5% it's not looking to hot in most areas.

You can always refinance but make sure your numbers make sense. Maybe your market is not the best to buy in right now and that is alright. There is always an area to buy in across the US, you just need to do your research and run the numbers.

 ALL my deals are cash as are my clients 10% ++ net caps are to be had. 

[Adriaan Sierra]

Quote from @Bob Stevens:

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

 I can get as many as I want, BTW, BIG mistake focusing just on the west side, not a good strategy. 

 oh?

do tell :)

[Bob Stevens]

Quote from @Adriaan Sierra:

Quote from @Bob Stevens:

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

 I can get as many as I want, BTW, BIG mistake focusing just on the west side, not a good strategy. 

 oh?

do tell :)

 Over the last 10 years, GH, MH, WH. CH, Euclid, Lee Harvard have doubled tripled or more. East Cleveland also has doubled at least. EC is about to grow just like UC did. 10 years ago it was a war zone around the Clinic, now try finding anything under 100k.We are trying to buy as much as we can there. just no inventory. I did pick up a 7 unit last week, and a SF behind the RTA last month, but want more just cant find anything. Again why focus on one area when it seems all of Cleveland and the burbs have skyrocketed on top of the 25% or more ( 6. 7 years ago ) net caps? 

Watch what happens with EC over the next 5 years , ( in certain areas, ) again we are buying everything we can. Already have an 81 unit there. We were told we were crazy 7 years ago. Well we are now turning down 3x what was paid, so who was crazy :) 

All the best 

[Adriaan Sierra]

Quote from @Bob Stevens:

Quote from @Adriaan Sierra:

Quote from @Bob Stevens:

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

 I can get as many as I want, BTW, BIG mistake focusing just on the west side, not a good strategy. 

 oh?

do tell :)

 Over the last 10 years, GH, MH, WH. CH, Euclid, Lee Harvard have doubled tripled or more. East Cleveland also has doubled at least. EC is about to grow just like UC did. 10 years ago it was a war zone around the Clinic, now try finding anything under 100k.We are trying to buy as much as we can there. just no inventory. I did pick up a 7 unit last week, and a SF behind the RTA last month, but want more just cant find anything. Again why focus on one area when it seems all of Cleveland and the burbs have skyrocketed on top of the 25% or more ( 6. 7 years ago ) net caps? 

Watch what happens with EC over the next 5 years , ( in certain areas, ) again we are buying everything we can. Already have an 81 unit there. We were told we were crazy 7 years ago. Well we are now turning down 3x what was paid, so who was crazy :) 

All the best 

 nah fam. You just underestimate how much of a tin-foil hat, chicken little type I am :D

I'm pretty happy with my risk adjusted returns so far.  All I see on this forum is people buying headaches that will come either from the PM or tenants. All I know is that today my cashflow is about to meet my expenses, so I don't really need to work anymore.

Could I be better off by buying on C-D neighborhood? sure. Are we going to own significant portions of Cleveland? Probably not.

There is also this chance that we might pick up more inventory in the next few years, when all the people that are FOMOing now are underwater...

[Bob Stevens]

Quote from @Adriaan Sierra:

Quote from @Bob Stevens:

Quote from @Adriaan Sierra:

Quote from @Bob Stevens:

Quote from @Adriaan Sierra:

Just wondering how y'all still managing to find good deals out there. I've had a strong focus on West Cleveland, with an appreciation component on my play (e.g. Lakewood) and the last quarter we only close on one property. This is the lowest number we had since we started. 

All of the available inventory is way outside our buy box, and I recently saw a MF sold for twice what our highest bid would have been.  Most of the deals that are currently available for MF on the regions where I buy would have you at negative cashflow. Last year, we were aiming for a 10% cash on cash at a minimum. 

All to say, who are the crazy people that are buying at these prices / rates !?  I cannot understand most of the current buys unless you plan to house hack or something like that. 

Just curious if you are seeing the same pattern. 

 I can get as many as I want, BTW, BIG mistake focusing just on the west side, not a good strategy. 

 oh?

do tell :)

 Over the last 10 years, GH, MH, WH. CH, Euclid, Lee Harvard have doubled tripled or more. East Cleveland also has doubled at least. EC is about to grow just like UC did. 10 years ago it was a war zone around the Clinic, now try finding anything under 100k.We are trying to buy as much as we can there. just no inventory. I did pick up a 7 unit last week, and a SF behind the RTA last month, but want more just cant find anything. Again why focus on one area when it seems all of Cleveland and the burbs have skyrocketed on top of the 25% or more ( 6. 7 years ago ) net caps? 

Watch what happens with EC over the next 5 years , ( in certain areas, ) again we are buying everything we can. Already have an 81 unit there. We were told we were crazy 7 years ago. Well we are now turning down 3x what was paid, so who was crazy :) 

All the best 

 nah fam. You just underestimate how much of a tin-foil hat, chicken little type I am :D

I'm pretty happy with my risk adjusted returns so far.  All I see on this forum is people buying headaches that will come either from the PM or tenants. All I know is that today my cashflow is about to meet my expenses, so I don't really need to work anymore.

Could I be better off by buying on C-D neighborhood? sure. Are we going to own significant portions of Cleveland? Probably not.

There is also this chance that we might pick up more inventory in the next few years, when all the people that are FOMOing now are underwater...

 Best part I know investors that do nothing 99% have never even been to Cleveland, yet have tripled their value on top of the 20% net caps to each is own, All the best 

If you come across anything where you do not want them, let me know I will buy it. especially East Cleveland, near the RTA, west to Little Italy, I take as much as you get   

[Nicolas Looman]

I am heating up if anything! Once a week I will go through the Cleveland and Akron markets and break down a list into an actual usable pool. Multi family that is already present in the 1 percent rule and high DOM that are within 10k of the 1 percent rule on current rents. I shoot the list over to each active client and they find it really helpful when they know that what they are looking at is at least close to the cashflow at the market price while knowing the rents should be higher than they currently are.

These owner sellers are investors too and they understand that you need to see cashflow from the getgo. If you can show minor cashflow at the beginning of the negotiation then getting the current rents up to market rent is just an added bonus that will get you into the 10 cap mark. 

I have been having the majority of my luck lately in the Akron market over the Cleveland market because of a couple of factors. Taxation is inherently higher in Cleveland than Akron and the market is slower in Akron making it easier to snag up those properties without the competition.

[Lucia Rushton]

@Carlos Ptriawan what market do you focus on ?

[Carlos Ptriawan]

Quote from @Lucia Rushton:

@Carlos Ptriawan what market do you focus on ?

 Bay Area

[Connor Kaplan]

Quote from @Neil Cronkrite:

It's tough for multifamily sellers to envision cap rate decompression on properties they bought on very low interest rates. The feeling then was: cost of capital is cheap, buy when you can! Now, the cost of capital is relatively much more expensive. I get it - it's tough to take a haircut, but expenses are up and rent growth has slowed. As others write, buy low, sell high. Or as Buffett said: be fearful when others are greedy. Be greedy when others are fearful. Or my new favorite phrase: run down the hall of indifference. 

@Neil, when you connect with multifamily owners, how do you break it to them that their property isn't worth what is was 1 year ago? I'm finding some sellers are becoming emotional with their sales price and cap rates

[Alecia Loveless]

@Adriaan Sierra Stuff is flooding my market some ok some overpriced. I lost one to a cash buyer that I outbid by $20,000 due to me needing financing.

About to close on my best deal yet. It’s overpriced but once the current manager is gone it will flourish. The listing agent showed the property before he listed it to about 7 people and then he sat on it for four weeks doing nothing and not listing it and I just finally made an offer and his broker made him present it to the owner and I got it. Needless to say I found cash for this deal. Not losing out again.

[Neil Cronkrite]

Quote from @Connor Kaplan:

Quote from @Neil Cronkrite:

It's tough for multifamily sellers to envision cap rate decompression on properties they bought on very low interest rates. The feeling then was: cost of capital is cheap, buy when you can! Now, the cost of capital is relatively much more expensive. I get it - it's tough to take a haircut, but expenses are up and rent growth has slowed. As others write, buy low, sell high. Or as Buffett said: be fearful when others are greedy. Be greedy when others are fearful. Or my new favorite phrase: run down the hall of indifference. 

@Neil, when you connect with multifamily owners, how do you break it to them that their property isn't worth what is was 1 year ago? I'm finding some sellers are becoming emotional with their sales price and cap rates

I'm not actually focused on multifamily. I am niched down in healthcare real estate like medical office, surgical centers, and medical retail centers. Two tactics have been helpful for us. First, we always schedule a 20-30 min call with the broker to explain our thought process. This allows us to make sure the listing broker isn't making assumptions or communicating a creative offer without fully understanding it. Second, the best negotiation tactic is walking away. We looked at an urgent care and dental retail deal in Wisconsin where we were about $150K away from agreeing on a roughly $2.8M purchase price. But one can't argue with DSCR and underestimate tenant buildouts. Tough to let it go and walk away. It wouldn't surprise me if that property is still on the market. The thing about market price is that it only takes 1 person out of 10, 20, 50+ offers to set the "market price." My goal is to be the last syndicator standing, not to be the one closing deals left and right.