All Forum Posts by: Larry Turowski

@Samuel Hailai those “rules” are really filters. And as you can see they are currently filtering out everything.  There was a time when there were so many deals, too many to analyze, that investors would filter using these rules to narrow down which properties they’d look at more closely.  You can still use variations on this, say apply a 1.3% rule. If you find there are still not enough to fill your funnel then broaden the scope. Heck you could just look at every single property. Ultimately, you want to find the best deals that you can and that work for you. For some investors nothing works for them right now. Me?  I’m still buying. 

@Diane Caballa you'll generally be able to get a better deal when you offer all cash but you'll also likely be doing some rehab. The idea is to buy (for cash), rehab, rent, and then refinance, and repeat (BRRR or BRRRR). The refi part is where you ideally get back all your starting funds because you've improved the value so much, or most of your funds so that you can build back up to 112k quickly.

But rehabbing is not for the feint of heart, especially remotely, so consider your goals and ability to execute. 

Quote from @Trish Wilson:

We personally bought a 9 acre farm in the Philippines at a very good rate. That's right, while we have been living here in Idaho for more than two years now, we were able to close some deals in my country. I had to trust a very good friend and her agent to help me find the perfect location. Our goal is to build a retreat center, self-sustaining farm living off the grid, accept cryptocurrency for payments in rentals and for purchasing of our produce.

 With the current pandemic situation for the last couple of years, living outside of the city is now being the "preferred" place to be in. Families are now going out of town almost every weekend to get some fresh air.

As I am now working with investors coming from different states outside of Idaho, I am finding good deals that are multi-units, SFR with acreage that can potentially provide passive income. Even SFR can provide a good passive income if rented to specific groups of short term rentals. In this time of market shift and unpredictable outcome of economic situations, we need to think outside the box and as what @Leo Ray mentioned, we need to add strategies to add value.

With regards to off the market, establish good relationships with local realtors and property management team. 

If you intentionally look for good deals in the market no matter what is happening around, you will find it. You get what you see.

@Brian Ellis I know at least one investor IN YOUR AREA that is still getting deals. But he is spending a LOT on marketing, like 7k/mo. Deals are indeed sometimes made. But for non-commercial properties, there isn't a whole lot you can do to make a deal. I've made deals by changing the layout to increase value, by getting owner financing, by partnering, by forcing appreciation, but the majority I get are FOUND, just not on the MLS, and not without spending some serious effort or cash.

There are still deals out there even in the hot market. The house I’m selling tomorrow was from my website. House was condemned due to filth, but was actually a nice house. And there are more in the works.

For those waiting for a crash, I don’t see it happening, barring an overall meltdown of the economy, in which case we have bigger problems. My belief is that the days of 2% inflation target are over. There has been chatter in the news about the Fed looking at targeting 4%, at least for the next few years.  And honestly, I think this is the only way to deal with our enormous debt. A 4% inflation rate would have the effect of eliminating over a trillion dollars (in terms of buying power) from our 30 trillion national debt.

This will put upward pressure on everything. And keep maybe an overheated real estate market from deflating much before it starts creeping up again in three or more years.

@Chris Wang I agree with @Nathan Gesner Just have insurance. Although I don’t know of a single investor in my area getting sued,  consider this if you are worried about not having enough insurance. Say you are insured for 500k and are sued for a million. Your insurance company will be on the hook for the first 500k. Do you think they are just going to fork that over?  No way! They are going to fight tooth and nail not to have to pay anything, or worst case, to pay less. They’d rather pay 200k than 500k and if they can do that, you wouldn’t pay anything (besides your deductible). 

Quote from @Nayron Henderson:

May I ask why they lose credibility with you?

First, most new wholesalers don't have real deals, so they don't have much credibility to start.  Second, this strategy making lots of offers to on-market sellers is the lowest effort strategy.  That tells me the new wholesaler doesn't know what they are doing and can't put in the effort to find off-market properties.  Third, they likely couldn't have done much due diligence on so many offers, so on the off chance something is accepted, it probably isn't a deal.  They have tied up the seller without any real intention of closing on the deal and they won't be able to find a buyer.  Fourth, most investors already watch the market.  Fifth, this strategy is most likely to work in a down market.

@Chris Seveney Agreed. There are rare exceptions to this, seasoned investors who can and will close on the deal themselves. But a newbie, and in this market? They’ll burn all their bridges with investors and realtors in an instant. 

If I’m in a competitive bidding war I’ve already lost.  I prefer to be the only one making an offer. 

$20/sqft. There!  How’s that for specific?

But here’s the thing. I’m serious. I stick to cosmetic rehabs. Oh sure, each one might be more or less, but not crazy different. I’m generally not doing rehabs that are $40/sqft.