All Forum Posts by: Wayne Kerr

What is y'alls favorite way of finding deals?

Quick background: I have a few rentals at the moment - kind of used the brute force method and put 20-25% down on each of them and a couple of them turned into BRRRRs (left some $$ in the deal but not as much as I would have buying at market price). That being said one of the quick realizations I made was how using your own money slows your velocity down significantly. So I've come to the crossroads where I am hoping to get more deals faster (ie: more leads).

Here's what I've got so far:

Cold calling - not going to lie, I straight up don't have the time, discipline or willpower to do this lol

Websites: Auction.com/HUDhomestore (just closed on a HUD home for a new primary residence - awesome place!). Foreclosure.com (I think it basically compiles a list of foreclosures for a monthly fee).

Sheriff Sale/Auctions - don't know how comfortable I am bidding on places that I can't verify the title on. I would be comfortable doing this through auction.com, I just need a way to verify there are no existing leins on the property. I'd have to offer a very low price since the property is "As is" and unseen. 

Propstream (will likely start a direct mail campaign and door knock on the properties that are close to where I live) - I will have this narrowed down by neighborhoods I am interested in. Still need to research on what criteria to use to filter properties and make lists, then skip trace. Costs $99/mo for the service plus I will probably budget 4-5k for initial marketing. 

Other investors - (FB Marketplace/Property Managers/Bandit signs) - Searching places that are for rent on FB marketplace and calling the owner, talking with my current PM and seeing if any landlords are looking to sell their properties, calling the number on bandit signs and seeing if they have anything for sale 

MLS - decent deals seem to be rare or I need my realtor to start essentially low balling very frequently until something sticks

Wholesalers - My networking is the lacking part - I'm on a few FB groups but 99.9% of the stuff is complete garbage. Got one guy that is pretty good, but he only sends a deal every few months. 

I'm about to finish the rehab on my new primary home and will have a sweet office set-up. Hoping to really get going once we get settled in so I'm trying to get prepared and set up now. 

What methods do you all like the most? Which seem to have the most success? How do you formulate your lists on propstream? Favorite criterias to use to filter the best properties? Any insight you all have on any of the methods you personally like to use would be awesome. Thanks!!

For a rehab I typically use a HML, then refi into a 30 year fixed rate, around 6.5% as of right now. I always do a fixed rate because I need the predictability, even if it means lower cashflow

Haha looks like a bathroom I just had redone - I'd tile it since you're living in it and the other 2 bathrooms are already tiled. Tile will last a long time and 5 years from now the extra cost of tile vs tub surround will come out in the wash. 

I'd leave the tub, it looks fine - then just demo down to the studs, redo the tile (cement backer board, sealer, tile, grout, adhesive) and faucets/valve and move on with it ($200 in parts). May cost around 2-3k for materials and labor (for everything, tile and faucets) but should last a long time. Get yourself some bigger tile, like 12x24 to make the installation easier/cheaper and get a little wall shelf/niche to put in there. 

So how would this work for regular people like me?

I bought a couple multi family deals in 2021, a SFH rental house that was a good value add, and a HUD foreclosure that will be my new primary residence. So a bit of an interesting unique year.

Kind of wished I would've gotten in the STR market or something that appreciated highly but ah well, just don't feel I have the knowledge/experience to do long distance yet.

That being said, I'm watching the market closely right now. I've got to steal it to buy it. You've got this weird combination of rising interest rates, still high prices, and lots of people with FOMO that will still buy stuff for crazy prices. If a place does not cashflow well with conservative underwriting then I'm out. My market has a lot more places hitting the market, but the prices are still a bit too high, so you have this crowd of last minute people trying to get in. 

For me personally, I don't care how high interest rates get - places will still cashflow then can be refinanced in 5-10 years or however much in the future. Most of my places I plan to hold for 10-20 years. 

@Scott Trench

I agree with what I can understand lol - Got a question for you though...so we have inflation right now, we have high asset prices (insane "appreciation" in the past couple of years), and we had, what seemed to me very high demand over the past couple of years. 

What do you think is the primary cause of the high demand right now? (I'd guess interest rates were the primary driver)

Other argument I hear is "supply is low", prices will stay high and continue to rise cause supply is low. I'm not overly sure this is the case myself. It seems like the extraordinarily high demand is what caused prices to rise. The demand can change quickly (by lowering interest rates, creating money) whereas the supply side takes MUCH longer to move (ie: we did not have a meteor that wiped out half of the houses in the US). 

What say you on how supply/demand will effect home prices in the coming years?

Why is the fed raising rates? Have you seen the prices of nearly everything in the past 2 years? That's why. Imagine being on this track for another 2 years, 5 years. You wouldn't be able to afford a pot to piss in before long.

So there's always buyers looking to secure a home - 10 years ago, today, and 10 years in the future. 

Thing is...what drove the demand (and prices) up? Low interest rates, influx of money (inflation), remote work, supply chain problems...

What happens when demand falls? Interest rates return to "normal" (much higher than they have relatively been the past 2 years), economy goes into a recession to prevent inflation from going out of control, remote work (may stay some, some may get laid off), supply chain problems normalize a bit 

Here's the thing - demand in the market can change rapidly (we've seen this in the past 2 years) due to interest rates and 10 trillion $$ created. Yes we still have a "low" supply, but the supply side moves much slower than the demand side which is why we have the imbalance today from my understanding. We've had a "low" supply for awhile but we've not had an issue cause demand was balanced with supply. The manipulation of the creation of money and low interest rates to prevent a recession during covid created a rapid increase in demand. 

Demand has to slow imo, and it will slow fast, much faster than supply can change. I think we're just getting started and we're going to see more price decreases in the next 18 months in the housing market and more of a return to "normal"

Awesome and welcome - you're in a great area for RE investing so that's good news. A bit of a weird time in the market with high prices, and now high interest rates (prices have not adjusted yet) and the DFW area really blew up too. But the outskirts would probably be an awesome spot. 

I wouldn't worry about the course - I'd forget about it honestly. Good thing is there is SO much free information out there regarding real estate. Maybe you'd be rich and maybe you would've bombed - everything happens for a reason and you're here now, so that's the important thing. 

I'd educate to a decent degree - do not overthink this stuff - and then get started. Once you get your feet wet you'll become more comfortable and you'll see a lot more deals just "appearing". Check out this video on YouTube - 4 Square method for deal analysis - it's a simple 10 min video that will give you the gist. If the numbers work there, and the property is in a decent enough area - that's all you need for your first deal. Don't be afraid to start. A bad deal is not gonna ruin you, just don't make it a habit