All Forum Posts by: Breanna Mason

I've been running a local meetup for Real Estate Investors here in Reno, NV for about 4 years now, mostly focused on flipping, wholesaling, finding off-market deals, talking to sellers, etc. (I can only teach on the things we do every day.) Every month, we start the meetup with a quick intro for all the attendees - Who you are, what you do, what you need, etc.

The networking at the meetup is some of the most valuable opportunities I can provide. I try to remember to tell the attendees beforehand "This is your chance to speak up and tell everyone what you're looking for so when we open it up for networking, the right people can approach you and help out." Anything I can teach is already out there. You can learn it online. The local CONNECTIONS are where the real value comes from.

At the meetup this Wednesday, it seemed like over HALF of the attendees mentioned that they are looking for a good deal to buy. Makes sense... its an investor's meetup... but I've never heard that many people actively wanting to buy something right now. A lot of people are always stuck in the learning stage, and that's what they say when their time comes to speak.

An obvious take away from this is that the Buyers are back. Our market got hit pretty hard last June - December. We basically lost 10% overnight in some areas in June (trust me, losing 10% hurts when you're buying flips on 8% margins 😭 😭 😭).

I couldn't GIVE a wholesale deal away in Q4 2022. I couldn't blame the Buyers, we weren't buying either, but these were fat deals with conservative ARV's and realistic rehab numbers we would have all been foaming at the mouth for just 6 months prior. That changed mid Q1 2023.

Does the local market have room to keep going down? **** if I know, but it seems that the majority of flip Buyers are more confident in the interest rate environment and price stability than they were a few months ago.

With so many people hungry to buy ath the meetup, my first reaction is... WTF is everyone waiting for? Well... they're waiting for a good deal, right? Yes... But I hate to break it to you guys. You're probably going to have to increase your 'deal-finding effort' tenfold to get one... at least in our local market.

As always, a million caveats to this - what's your strategy, which price point are you target, areas, rehab cost, financing, etc - but again, speaking from the perspective of sourcing off-market SFR/Condo/Townhouse/Manufactureds mostly for flips... this **** is competitive. It always has been since I started in 2017, and it's probably not going to get any easier.

Being in the dispo seat at the company, I talk to Buyers all day long... seasoned, brand new, flippers, rental guys, true cash, private money, mom-and-pop, several hundred per year... everything you can think of.

Especially from the younger/newer investors, I get the feeling pretty often that they think they are going to just wait and a 'good deal' is going to fall into their lap. Or now that they are on our Buyers List, they've got a smoker coming their way later this week. Some of the old guys actually CAN pull this off and I envy them for it... but that's what they deserve for being in the game for the last 40 years.

The stars might align and something does fall into your lap with no effort, but if you truly want to buy something and buy it soon, you need to start taking more action and be READY to pull the trigger when the time comes. Get aggressive and get your contractor, partners, underwriting, and financing in order. More often than not, even our off-market wholesale deals have several Buyers that are interested in them at our asking price.

Our local market is NOT a heavy wholesale market. Our market is saturated with real Buyers that have to source their own deals through marketing. We have competition on just about every deal we put in contract, but often it's not with a new wholesaler that doesn't know what their doing... it's with other Buyers.

Again, be prepared. Go in with the mindset of "I'm going to have to talk to a **** LOAD of people to get a deal." Have your purcahse agreement ready. You go on appointments to CLOSE, not to take photos. Be ready to FOLLOW UP with the Sellers and get some deals coming in later.

Are there deals on the MLS? 100% yes, but again... effort and volume. The deals are 'free' (no marketing spend) but they are likely going to be the most competitive, so be prepared to make a LOT of offers to get one.

It always comes back to volume guys. This isn't rocket science. There's nothing we are doing that is a secret or even 'the best', we are always improving and changing things as we go. It's just hard work... but WTF are you waiting for? You NEED to take enough action to take down that first deal. It's everything. So just remember when the phone looks heavy... pick it up any way. The next call might be a $20k wholesale, or a $40k flip... then it's 🚀

Hello!

My wife and I are just working on building up some equity. We have a little bit of a suicide-run plan to try to buy a multi-family, and looking for a reality-check if we're going to hard, or perhaps into something that isn't possible for us. I totally welcome all opinions, positive or negative!

On the north shore of MA, we currently own a ~1500 Sqft Condo with about $70k of equity, but the value of our home has increased from about $500k to $630k via local comps & my realtor's estimate.

We are looking to purchase a multi-family local to us. The numbers seem to be in our favor, as well as some changes to local zoning. The home is listed at $720k, but we think we could get in at $680k. There are two units, currently TAW- rented below market value. The units are in tough shape and we'd like to finance additional money for reno & an ADU addition- I assume that we could refresh the interior and convert the attached garage space (200sqft) into a 350-400sqft rent-controlled ADU. I am pretty well locally connected and am not overly concerned about permitting/zoning.

Once complete- even with zero down I estimate- $5092 monthly mortgage (including financed rehab). Both units would potentially rent for 2600/unit. The ADU would additionally add $1500 (set by local ordinance) of potential rental income. Totaling $6738 monthly rent collected. Even budgeting for $1600 of monthly expenses (including vacancy and repairs) we still end up in the clear.

-We aren't overly concerned about turning a huge profit. I figure, in time, as rent increases & we are able to refinance, our profit margin will grow.

-Average yearly increase in property value of a little over 6% makes this feel like a small risk as we could cash out.

-We have just enough income to float the second mortgage in case hell lets loose. Renting our current home in an emergency scenario would help too.

-We have some cash on hand, but I'd prefer to hold it as it's our emergency fund.

Am I insane? If not, would a lender ever agree to do this with me? There is risk there, but plenty of escape plans.

I appreciate you and your husband sharing your unique situation. Without looking at the numbers, I’ll share my thoughts.

1. It’s been back and forth on the market for years without any major updates to be livable (it seems). This may cause additional maintenance issues if the property has been vacant for years without use.

2. Why have a six month closing while you work on a property you don’t technically own? What happens if something goes wrong in the middle of renovations?

3. Who will carry the note for six months while you make updates (if there is a mortgage)?

4. If the ARV is so high (recommend speaking with a realtor and contractor to get numbers), why not get a hard money or private loan?

This seems to be a lot to take on from what you provided…and the juice may not be worth the squeeze.

I’m active duty Air Force and I always appreciate properties that help our Service men and women. However, I believe there are other properties out there that are less complicated.

Someone smarter than me may say otherwise here, but I wanted to share my initial thoughts after reading. Maybe I missed a thing…or seven.

Getting the help of a commercial real estate agent and contractor will bring things into focus. Maybe speaking with previous owners might help to get started.

I wish you all the best.

Chances are the people calling are wholesalers who will lowball you. If you are cash flowing $400 a month and have seller financing, I'm also guessing you have lower interest rates.  I wouldn't sell.

If you want to stay in rentals, the only time I'd consider selling is if you can do better with your money in another property after factoring in all of the costs of buying and selling or if you have problems with the house/tenants (eg want to buy a better type of property).  I've only sold one of my rentals so far and it was a condo I bought while in grad school. I sold it after about 20 years because I was tired of how the building was managed, there were massive (multimillion $) renos/repairs they were talking about, and the value of the condo had almost tripled. I used that money to buy two other properties.

@Breanna Mason in my market a cash flow of $400 a month if you’re paying your mortgage and saving maintenance, vacancy, and Cap Ex as well as the other bills would be solid. A low interest rate would be a bonus. Depending on how much it’s appreciated you will likely find the cost of entry into a similar market will be much greater and at a higher interest rate and your cash flow amount may drop overall.

Also if it hasn’t been your primary residence 2 of the last 5 years you may end up owing lots of capital gains taxes on your sale unless you do a 1031 exchange which while helpful for reducing taxes has its own set of rules and regulations.

 Bre, have you every played Robert Kiyosaki's cash flow game? I think it is such a great way to start understanding investing and whether or not you are ready to sell an asset and buy a big deal or more small deals to further your goals. 
 

What are the offers and what do you still owe?