All Forum Posts by: Brian Ellis

@Brian Ellis You mentioned you've had issues on the larger properties due to not having enough cash, have you considered looking for a partner who has the cash to make those deals work to give you the purchasing power you want?

@Joe Villeneuve I agree--deals are usually made (not found), and often, this can require some creative thinking...

@Brian Ellis I definitely get the frustration--it has been a very challenging market for buyers for a long time...that may be changing--it certainly seems possible that the market may look very different in the next 6-12 months (we've already seen a big increase in inventory and DOM in my market, so perhaps more and more sellers will start coming back to reality over the next 6-12 months).

As for making deals; pretty much every deal I've ever done had some weird issue that drove other buyers away. For instance, I bought a place that is a fantastic rental (cashflows $1,000/mo), but it has a staircase awkwardly placed right inside the main entrance. The staircase is completely functional, and doesn't really bother tenants, but it turned off buyers, so I was able to get it at a good price.  ...I have another rental that turn-key cashflowed $1,100/mo when I bought it (and today cashflows $2,200/mo) that turned off buyers because it was on a busy street (again, that issue hasn't turned off renters).  ...another time, I found a property with a funky floorplan that was turning off buyers, but I could see that with some fairly easy changes, the floorplan could be made much more appealing--the changes I made transformed the property from a place that would have lost about $400/month into a place that now cashflows $1,200/month!

...and BTW; ALL of those properties were on the MLS, and all were acquired during the worst buyer's market in the city's history!

So, for me, the key has been being flexible and imaginative enough to see the opportunities that nobody else can see, and finding a property that does not work for most other buyers, but which can work for my purposes.

The irony is that we're often told to have a strict "buy box"--which, I think can be a double-edged sword. On the one hand, a strict buy box cuts down on time chasing properties that don't fit your goals, but on the other hand, it can blind you to the types of opportunities I described above... Every time I've bought a property, I've gone into the market with some idea of what I was looking for, but I also had the mindset of "if I find something that pencils out, I'll take it--even if it's not the exact type of property I'm trying to find"  ...and sure enough, most properties I've bought are actually quite different than what I was looking for at the start of my search!

Good luck out there!

But you have to think about your competition. Someone that’s going to live there thinks, this place is worth $350k after we fix it up and they only want $275k. I can do a boatload of work for $75k. So to that buyer $275k is a good deal. Worst case they agree that it might need $125k to make it perfect. So they offer $225k. $50k more than you. 

But most likely you get people who can afford $275k but not $350k. Their “plan” is to live in it as is until they scrape up enough to fix it up. 5 years later they’re living with it as it. But $275k was still a steal. You can’t put a $50k profit in it for yourself and then say the realtor is crazy not to taking your offer. 90% of buyers are owner occupants. 

40% off is a big ask in any market I’ve invested in. Either you’ll get the last laugh in 6-12 months when they drop 40%. Or it will sell for $250k plus and you’ll have to look at your calculations. 

But you have to think about your competition. Someone that’s going to live there thinks, this place is worth $350k after we fix it up and they only want $275k. I can do a boatload of work for $75k. So to that buyer $275k is a good deal. Worst case they agree that it might need $125k to make it perfect. So they offer $225k. $50k more than you. 

But most likely you get people who can afford $275k but not $350k. Their “plan” is to live in it as is until they scrape up enough to fix it up. 5 years later they’re living with it as it. But $275k was still a steal. You can’t put a $50k profit in it for yourself and then say the realtor is crazy not to taking your offer. 90% of buyers are owner occupants. 

40% off is a big ask in any market I’ve invested in. Either you’ll get the last laugh in 6-12 months when they drop 40%. Or it will sell for $250k plus and you’ll have to look at your calculations. 

OK.  I can understand everything said, except 2 things:

1 - The selling agent saying, "nobody cares about the ARV". After I stopped laughing, ...

2 - Why are you fed up?  You know things will level off, and everyone (I'm guessing even that moron of an agent) will come back to reality island, and all will balance out.  It ALWAYS does.