All Forum Posts by: Dave DeMarinis

@Mindy Jensen Sorry, much better answer. Use your status as a Biggerpockets (one word @Joshua Dorkin) celebrity and do what @Brandon Turner does and tell everyone you meet, podcast to, etc. what you are looking to purchase. Given the reach of your platform, you should get plenty of opportunities coming to you and just pick the best one. If that doesn't work, tell Brandon he has 45 days to find a TIC for you to trade into with him or you will shave his beard. Two full proof options.

You guys are amazing and it is so great to see how many investors the BP platform helps. Thank you, thank you, thank you!

@Mindy Jensen I'm surprised how often people run into this issue when they could have controlled the closing date on the sale. A great example is selling to a tenant. If doing that, I think nearly all of them would happily give you a delayed close until you opened escrow on the replacement. Similar to what @Dave Foster said on floating close. 

The Opportunity Zone is an interesting idea but has some major differences from a 1031. 

1. If you have a lot of depreciation recapture, the OZ won't do anything to help you
2. Remember you will eventually owe 90% or 85% of the cap gains taxes in 5 or 7 years and you will need to have that money available at that time
3. For estate planning, you (your heirs) won't be able to take advantage of the step up in cost basis available for 1031's

On the huge positive side for OZ, if the Opportunity Zone investment performs, you can avoid (not defer, AVOID) any cap gain taxes for the new appreciation if you hold at least 10 years. The other big positive is you can have immediate access to your cost basis so you can make a smaller investment in the OZ vs. having to go bigger than the existing sale with a 1031. Of course, be careful what you do with that released capital because you will need to pay the taxes in 2026 ...

@Steven Foster Wilson I assume the triplex was found off market or maybe a wholesaler? That sounds very strong for Columbus.

@Sam Foltz the Huntsville market is very attractive for all the reasons the main stream press is talking about it. Educated work force, high employment growth, income growth and population growth. The real esate market is extremely diverse in Huntsville and even more so once you bring in the surrounding suburbs. There are literally homes from $50K to $500K and everything in between within a mile and sometimes even blocks of each other. 

As you can imagine, the returns and strategies vary significantly across those asset classes. Let us know what specifically you are planning or would like to know. There is also a pretty active group of Huntsville investors. As the addage goes, "ask and you shall receive."

@Account Closed Yes, we are not affiliated, so mods, please don't pull any posts. I'm SFH in Huntsville and my target was minimum $800 rent for a 3 bed home and 1.1% rent/all in cost and wanting total cost to be <80% ARV. Rents are growing pretty quickly and I'm certainly seeing appreciation as well. As an example.

$60K purchase plus $12K rehab, rent at $800 and ARV of $90K. That same deal in today's market probably rents for $900 and ARV is $100K+.

OK, I'm going to spill the beans. Huntsville completely violates one of the best arguments on BP. Cash flow OR Appreciation? Huntsville takes advantage of the beauty of the AND (as author Jim Collins says).

I don't know the suburbs (other than Madison which is definitely A/A+) but in answer to what I hope you are thinking, I think your model would be very interesting in some of the suburbs.

The short answer is too low of rents. In Huntsville, the small MF are renting in the $450 to $675 range for the most part. SFH are in the $800 to $950. The small MF I see are pretty isolated and not mixed in with SFH. That creates a neighborhood of ~$500 rents which creates a challenging tenant pool. There isn't enough headroom to push up the rents and those low rents make for challenging cash flow when you include appropriate CapX, maintenance, vacancy, etc. On top of that, small MF purchase prices are being pushed up which is allowing higher returns on SFH. However, I do not know the suburbs of Huntsville for Small MF. I'm betting there are opportunities there.

@Account Closed opened my eyes to the opportunities in the suburbs of the major markets. I think his thesis makes so much sense - broad macroeconomic trends are the same/similar as the big city, way less competition and generally better rent/price ratios for a higher class of product. If you are interested in small MF, I would definitely look at what Elliott offers in secondary and tertiary markets. 

There are a lot of threads asking about specific markets which always generate great discussion. I love data, so below is a data driven answer. They seem pretty optimistic with "average flip profits at 20% to 33%" but it was an interesting, data driven approach that I think is useful. I also really like that they included the surrounding towns of the major markets in their analysis.

@vincent chen - a data driven answer.
@remington lyman @sara elford  - the data agrees with you about Columbus. A lot of usual suspects, but some surprises both on and off the list. 

Which do you think is the best?

https://www.realtor.com/news/trends/10-best-places-to-buy-investment-real-estate/

Talking about Dayton the actual city, it is not a flip market. However, there are good flip opportunities in the nicer suburbs like Beavercreek. 

I think we are confusing advertising and negotiating. You can not advertise different prices for different tenants. Even if you find some narrow area where it isn't illegal, it is bad business and complicated to advertise it. However, you can negotiate individually with each tenant. 

If you have two "identical" units, advertised for the same price and you qualify a Section 8 tenant for one and a non-section 8 for the other. You can negotiate to different prices for each of them and that is totally fine. Hopefully that helps.

While we're on the topic - you really need to have a written process for how you process applications and qualify applicants. Do the same thing for all applicants every time and you won't have a fair housing problem.

@Eric Roloson The asking price has nothing to do with the value to you. I skimmed the thread, but it seems like working with the listing agent (and hoping your old agent didn't even present your offer :-) is the way to go. There is one way to present your offer without offending them.

Be straightforward and explain how you are coming up with your offer. Show what you think is wrong with it and how much it will cost to fix those things. You can also say if the well passes inspection, you'll increase your offer by X, if the septic passes, you'll increase your offer by another Y ... Let us know how it goes.