Buying in an Expensive Market
Investor · Boca Raton, FL · Member since 2020 · 111 posts · 44 votes
Buying in an Expensive Market
Most Popular Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votesFind motivated sellers that will accept less than market price and/or agree to seller-financing!
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________________________________________________
Why does everyone want to chase strangers – and ignore their own personal network?
Which do you think will be more competitive, buying from wholesalers or your own referrals?
Per this NY Times article, the average American knows around 600 people.
Per the US Census Bureau, the average American moves 11.7 time in their life, which based upon an approximate lifespan of 84 years, works out to be about every 7 years.
So, if the average American knows 600 people and they each move about every 7 years, that means that the average American knows around 85 people that move in any given year.
How many of those moves do you want to be involved in?
To maximize the number of transactions you’re involved in you will need to:
1) Be Top of Mind when they think about moving - which requires consistent reminders.
2) Be seen as an Expert – which requires a consistent message and Evidence of Success stories
3) Gain their Trust – which requires communicating with integrity
So, start out by CONSISTENTLY posting what you are doing on whatever social media channels you currently use. Not on any? You better fix that! You may also want to figure out which channels your family & friends use the most and get on those if you’re not on them currently.
What should you post?
How excited you are about what you’re doing in real estate investing! Share stories about your successes AND challenges. Then, ask them for their help!
IMPORTANT: do NOT ask people for THEIR business, ask for referrals! Why? Because they will get defensive if they feel you are pressuring them. Remember, they can always refer themselves😊
Use one of the ideas below to trigger who they know that they could connect you with:
1) Just inherited a home
4) Had a loved one pass away
5) Is behind on their mortgage or tax payments
6) Has a relative that can’t take care of their house anymore
7) Has a house they’re having trouble selling
8) Is facing bankruptcy
9) Knows a probate attorney
10) Knows a bankruptcy attorney
11) etc
Putting this in OVERDRIVE
Create a spreadsheet (Excel or Google Sheet) listing everyone you can think of that would recognize your name or face.
Why a spreadsheet? Because later, you can easily upload to a CRM like Constant Contact to create an email list!
Create columns for Name, email, cell and even Street Address, City, State, Zip and then contact info: Last Contact, Relationship, Status.
Then start calling these people. Divide the number of people on your list by 20 - and that’s how many you want to try to target daily.
Whether you get ahold of them or leave a vm, use 1-3 of the above triggers for referrals.
Why only 1-3 off the list per contact? Because on average, we can only remember three things at a time. If you try to go over the whole list, you’ll lose the attention of the average person and they won’t remember anything!
It should only take you about a month or two to contact everyone on your list and then the tough part – you start all over again.
Be sure to also ask what social media channels they are on and connect with them there.
Why the repetition? Because it takes repetition for people to remember things and you have to be top-of-mind when they encounter a potential client for you!
Have you ever been to McDonalds? Of course you have! So, why is McDonalds still spending billions on advertising?
One more tip – people remember stories that trigger their emotions. So, tell a story of how you (or a fellow wholesaler) helped a seller out with their challenge(s). Change your story each month as different stories will resonate with different people AND use each story to emphasize one of your “who do you know…” questions.
One last thing – we recommended you create a Status column on your spreadsheet, now we’ll explain why. If you find someone that seems to know a lot of people needing your services, wouldn’t it make sense to focus more resources on them? Conversely, you will run into people on your list that just seem to be a waste of time, so you’ll want to avoid them. So, create status codes for both of these and a few in-between codes to help you work smarter, not harder.
Logical Property Management4.9451 Reviews
21 Replies
- 3dArman AhmedPro MemberReal Estate Agent · Columbus Cleveland Dayton, OH · Member since 2024 · 2k+ posts · 915 votes
Quote from @Michelle Dong:
HI All,
My name is Michelle and I have a couple LTR in South Florida.
As many of you know this market is getting more and more experience.
What are some creative ways to invest in a market that is "expensive"?
In an expensive market, I’d look at ways to lower your basis rather than forcing a deal that doesn’t cash flow. House hacking, small multifamily, value-add, or even investing out of state can open up a lot more options. Sometimes the best move is simply putting your money where the numbers make more sense.
- Investor · Boca Raton, FL · Member since 2020 · 111 posts · 44 votes2d
Currently my 2 investments I have now is through the house hacking strategy. Many of the numbers do not make sense down here for cash flow and that is primarily what I am looking for.
- 2dV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
Quote from @Michelle Dong:
Currently my 2 investments I have now is through the house hacking strategy. Many of the numbers do not make sense down here for cash flow and that is primarily what I am looking for.
If you're looking for cash flow then don't look at physical real estate. Go buy treasury notes or bills, or dividend funds. Better yet, get a(ntoher) job.
- 3dGregory AcsPro MemberLender · MD · Member since 2025 · 153 posts · 57 votes
Michelle, that's a challenge a lot of investors are facing in higher-priced markets. I've seen investors take a few different approaches depending on their goals. Some expand into nearby markets where the numbers work better, others look at value-add opportunities like BRRRRs or properties with ADU potential, and some use creative financing or leverage existing equity to improve returns.
Whatever strategy you choose, I think it’s important to underwrite conservatively and make sure the deal works based on today’s numbers rather than hoping rates or prices move in your favor. If you’re exploring financing options or looking at different ways to structure your next purchase, I’d be happy to compare scenarios and help you evaluate what makes the most sense.
- Investor · Boca Raton, FL · Member since 2020 · 111 posts · 44 votes2d
HI Greg, thank you for your response. Since I live in South Florida I have been looking closer to central FL for deals. Ideally I am looking for a small fix to rent project or a property where I can add a ADU or even a property with some sort of land and put a trailer in the back and rent it out along with the unit in front.
- Real Estate Agent · Chicago, IL · Member since 2017 · 2k+ posts · 2k+ votes3d
In an expensive market, the trick is to buy 3 or 4 unit buildings. A single family will never make sense here. Then do cosmetic rehabs to maximize rents and take advantage of the fact tenants in area can afford to pay very high rents. On my own deals and my clients we regularly bring arv rents to 50% to 100% over what they were when a mom and pop type owner sold the building and this is with multiple over 700 credit tenants applying so the buildings operate very smoothly. You also need to look at total returns over time with rent growth factored in. Jumping into the first deal is hard but once see the long term results, it's easy to want to repeat.
- Investor · Boca Raton, FL · Member since 2020 · 111 posts · 44 votes2d
Hi Henry, thank you for the input.
- 3dAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
Michelle, in an expensive market I usually think the answer is less about “finding a cheap property” and more about finding a structure where the numbers still work.
That can mean looking at small multifamily instead of a single-family rental, buying something with an obvious value-add component, improving rents or operations after purchase, or finding a financing structure that reduces how much capital gets tied up in the deal. Sometimes the better opportunity is also a property where the current owner is under-managing it rather than a property that is simply priced low.
I’d also be very careful not to stretch the underwriting just because South Florida is expensive. If the deal only works with aggressive rent growth, very low maintenance, or appreciation assumptions, that can become a problem quickly. I’d rather see slightly lower returns with conservative assumptions than a deal that only works on paper.
From the tax side, depreciation, cost segregation where appropriate, financing structure, and the way renovations are classified can improve the after-tax return, but those should enhance a good deal rather than rescue a weak one.
I’m from Florida as well, so I definitely understand how challenging the acquisition side can be here.
Feel free to DM me, I’d be happy to send over our Turn Key Rental Analyzer and a few real-estate tax resources that may help you compare different ways to make the numbers work.
INVESTOR FRIENDLY CPA®5241 Reviews- Investor · Boca Raton, FL · Member since 2020 · 111 posts · 44 votes2d
HI Ashish, thank you for this. I would love to connect and get some more resources.
- 3dDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 12k+ posts · 9k+ votes
Find motivated sellers that will accept less than market price and/or agree to seller-financing!
Copy & paste info below:
________________________________________________
Why does everyone want to chase strangers – and ignore their own personal network?
Which do you think will be more competitive, buying from wholesalers or your own referrals?
Per this NY Times article, the average American knows around 600 people.
Per the US Census Bureau, the average American moves 11.7 time in their life, which based upon an approximate lifespan of 84 years, works out to be about every 7 years.
So, if the average American knows 600 people and they each move about every 7 years, that means that the average American knows around 85 people that move in any given year.
How many of those moves do you want to be involved in?
To maximize the number of transactions you’re involved in you will need to:
1) Be Top of Mind when they think about moving - which requires consistent reminders.
2) Be seen as an Expert – which requires a consistent message and Evidence of Success stories
3) Gain their Trust – which requires communicating with integrity
So, start out by CONSISTENTLY posting what you are doing on whatever social media channels you currently use. Not on any? You better fix that! You may also want to figure out which channels your family & friends use the most and get on those if you’re not on them currently.
What should you post?
How excited you are about what you’re doing in real estate investing! Share stories about your successes AND challenges. Then, ask them for their help!
IMPORTANT: do NOT ask people for THEIR business, ask for referrals! Why? Because they will get defensive if they feel you are pressuring them. Remember, they can always refer themselves😊
Use one of the ideas below to trigger who they know that they could connect you with:
1) Just inherited a home
4) Had a loved one pass away
5) Is behind on their mortgage or tax payments
6) Has a relative that can’t take care of their house anymore
7) Has a house they’re having trouble selling
8) Is facing bankruptcy
9) Knows a probate attorney
10) Knows a bankruptcy attorney
11) etc
Putting this in OVERDRIVE
Create a spreadsheet (Excel or Google Sheet) listing everyone you can think of that would recognize your name or face.
Why a spreadsheet? Because later, you can easily upload to a CRM like Constant Contact to create an email list!
Create columns for Name, email, cell and even Street Address, City, State, Zip and then contact info: Last Contact, Relationship, Status.
Then start calling these people. Divide the number of people on your list by 20 - and that’s how many you want to try to target daily.
Whether you get ahold of them or leave a vm, use 1-3 of the above triggers for referrals.
Why only 1-3 off the list per contact? Because on average, we can only remember three things at a time. If you try to go over the whole list, you’ll lose the attention of the average person and they won’t remember anything!
It should only take you about a month or two to contact everyone on your list and then the tough part – you start all over again.
Be sure to also ask what social media channels they are on and connect with them there.
Why the repetition? Because it takes repetition for people to remember things and you have to be top-of-mind when they encounter a potential client for you!
Have you ever been to McDonalds? Of course you have! So, why is McDonalds still spending billions on advertising?
One more tip – people remember stories that trigger their emotions. So, tell a story of how you (or a fellow wholesaler) helped a seller out with their challenge(s). Change your story each month as different stories will resonate with different people AND use each story to emphasize one of your “who do you know…” questions.
One last thing – we recommended you create a Status column on your spreadsheet, now we’ll explain why. If you find someone that seems to know a lot of people needing your services, wouldn’t it make sense to focus more resources on them? Conversely, you will run into people on your list that just seem to be a waste of time, so you’ll want to avoid them. So, create status codes for both of these and a few in-between codes to help you work smarter, not harder.
Logical Property Management4.9451 Reviews- Investor · Boca Raton, FL · Member since 2020 · 111 posts · 44 votes2d
Hi Drew, wow this was amazing and full of gems. Sometimes I overthink of the basics but thank you for breaking everything done to actionable steps.
- Specialist · I give advice - [email protected] - I focus on states where investing is profitable, reasonably safe & secure · Member since 2026 · 15 posts · 3 votes2d
Quote from @Michelle Dong:
HI All,
My name is Michelle and I have a couple LTR in South Florida.
As many of you know this market is getting more and more experience.
What are some creative ways to invest in a market that is "expensive"?
If you have decent cash flow and expect that to continue, you could find people who are wanting out of the mess they are in and do what we call an all inclusive trust deed or wrap. That actually solves several problems, you buy the house, the seller sells, the county gets their taxes, contractors get paid to fix up the house and people get to rent and have a place to live.
- MD/DC · Member since 2024 · 1k+ posts · 1k+ votes2d
There is a bit of mental gymnastics here and in some ways living in a HCOLA area insulates you from the difficulties that come with cheaper entries, and tenants who struggle financially. The operating costs are similar but with lower rents, less anticipated appreciation and likely more tenant issues. I would rather 4 properties in class A neighborhood that is familiar and close to where I live than 12 class C or D properties out of your area that you will need to pay a property manager, do significant repairs every time someone moves out and will be difficult to sell. Consider the overall bottom line and hassle factor. I suspect less may actually be more.
- Investor · Boca Raton, FL · Member since 2020 · 111 posts · 44 votes3h
Thank you Jules for this!
- Investor · Tampa · Member since 2026 · 8 posts · 3 votes2d
Hi Michelle,
Picking up on what you said further down the thread, about an ADU or putting a second unit on a lot with some land. There are 3 parcel specific factors I would check out before moving forward:
- Florida has no statewide ADU right, so whether a second dwelling is allowed at all is county by county and zoning district by zoning district.
- On a rural parcel the septic system and lot size often decide it before zoning does, since a second dwelling needs the capacity to support it.
- Counties charge impact fees per new door, which in central Florida can run into five figures. This often catches people, because it lands after you've bought the lot and it can be most of the value you were adding.Its definitely worth a call to the county on any specific parcel before you commit to a scope.
I'm based in Tampa, my family runs vacation rentals on the Gulf coast, and I'm building a tool that pulls Florida public records to help assess carrying costs. If you have a specific parcel in central Florida in mind, send it over and I'll pull what the records show. No cost or catch, the tool is in development and I'm looking for real deals to run it against.
- Investor · Boca Raton, FL · Member since 2020 · 111 posts · 44 votes3h
HI Noah,
I had no idea. Thank you for bringing this up to my attention regarding impact fees per new door and septic tank systems.
For the tool you are building is it only for Central Fl or is it also applicable for south Florida?
- 1dHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
OP. Visiting my son in San Diego in the Navy. Frame of response.
Charge more.
Lower your operational costs
Lower your lost unit turnover revenue
Lower your collection costs
This will make your numbers better in an Expensive market.
What has that got to do with my son?
A. Military pays BAH housing payment's. Guaranteed. He is getting $2,800 per month. Times 5 rooms.
B. Rent rooms and not houses, more income.
C. Know their commanding officer. No collection issues or damage payment issues. They will collect for you.
D. Lower turn over costs. Less damage and clean up.
E. Have a great place. Get the roommates to fill for you. Example. Contract is $10,000 whether 5 or 1. Get them to fill spots. Give them rental benefits for filling spot. For both keeping that unit clean and finding new tenant.
Make sure it is both a great unit, great
Location, great facilities.
- Investor · Boca Raton, FL · Member since 2020 · 111 posts · 44 votes3h
HI Henry,
With this strategy is the house close to a base?
- 1dHenry ClarkPro MemberDeveloper · Member since 2020 · 4k+ posts · 4k+ votes
OP. Same as above but different angle. Everyone is after a great 3/2. You’re in Florida.
Go with renting Yachts out. Whether short term or long term rental. Why are you different? Why do you charge more? Because your yacht.
Check out 10 to 15 year old yacht prices, dock fees, sump fees, resident regulations, etc.
I looked at San Diego for my son. $1.2mm was the low range. Checked out yachts. $300,000 to $500,000 plus about $600 dock fee. No property tax. Used so resale value no major drop off in say 5 years. What 25 year old wouldn't want to live in a Yacht? Or family STR?
Key is, try a
Different angle.
- 1dJorge VazquezBusiness MemberReal Estate Broker · Tampa, FL · Member since 2017 · 1k+ posts · 682 votes
Michelle, I’d definitely look into Pasco and Polk County, south St Pete, University area in Tampa, Ybor . I like buying the ugliest house in an area that has signs of improvement or future gentrification, as long as the numbers work today. I’d stress test every deal for lower rents, higher expenses, vacancy and repairs. and if it still works, then buy.
I’d also look beyond just negotiating price. With sellers who are motivated, sometimes you can give them closer to the price they want, but structure seller financing at a lower rate so you get the monthly payment and cash flow you need. Novations, subject-to, seller financing and other creative structures can also open up deals that don’t make sense with traditional financing. The key is buying right and creating equity, not just hoping the market goes up.
Graystone Investment Group4.6268 Reviews- Investor · Boca Raton, FL · Member since 2020 · 111 posts · 44 votes3h
HI Jorge when you stress test a deal. What are the average numbers you will put in?
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