All Forum Posts by: Larry Turowski

@Jonathan Baum the person you'd be renting from evidently thought differently. Go the search option here on BP and search for "house hacking."  This is exactly what you were thinking of doing and is one of the best ways to get started.

@Jacob St. Martin the correct answer, generally speaking, is it doesn't matter as long as it is still a deal to the buyer. However, I applaud your considering your conscience. Not enough of us do that.

It might be helpful to consider a story. John is a car mechanic. Dan needs a new transmission. This would normally cost $2,000, but he asks John for a "friend" discount of $500 for a total cost of $1,500. From Dan's perspective, John does not lose out on anything but Dan save's $500. However, in economics/accounting, that $500 didn't come from nowhere. It came from John. John could have worked on someone else's transmission and made $2,000, or maybe he could have just had a day off. (These are opportunity costs John gave up). In economic reality, John loses out of $500 and Dan gains $500. There is a $500 gift going on. Why not have it go the other way? Why doesn't Dan offer to pay $2,500 for John's services because John is a friend?

@Vlad B.Keep investing? If you keep investing like that you’ll go bankrupt. You are over leveraged. You need evict non-payers, fill the vacancy, and sell one or more of the properties to shore up your finances. And then reevaluate. You should not have two non-payers and a lingering vacancy out of 8 units in b/c areas. 

 This. I bought a property during Covid with a non-paying tenant that I carried for about a year because I got it at such a good price. They’ve since left, I’ve got a paying tenant and it is now worth over four times what I paid. 

@Alon Gilmore Networking is a great way to find good contractors but in this tough labor market sometimes people don’t share because they don’t want their best contractors to get too buys on other peoples work. I’ve had success putting a paid ad on Craigslist for skilled trade job, seeking 1099 contractors. Now is actually the best time because winter is the slowest time for contractors. Besides whomever you hire, you’ll get a bunch a contacts you can keep in your back pocket for future projects.  

@Juan Zamora Listing price is irrelevant (with caveats). What is it worth to you? If that number is 25% below list then you made the right offer. 

@Scott Trench Thank you! This is such a great post, courageous and with great points. Great replies too!

As someone contemplating getting into multifamily investing this was timely. I had not really thought about industry trends with respect to interest rates and cap rates.

There was a BP podcast (I can't find it now) where this family sold their billion dollar business and were investing in large multifamilies. The guest mentioned they were buying at 3% cap rates! That made no sense to me and it never came out as to how it might make sense.

We’ve all heard the terms fear of loss and fear of missing out. (We could frame those ideas in positive language as desire for safety vs desire for a goal.)  It’s best to be somewhere in the middle of that spectrum. Too far on the former side and, like your friend, you can’t move forward. Too far on the latter side and you’ll move forward heedless of excessive risks.

I agree with others that the carrot works better than the stick. However, projects running beyond schedule is almost universally true, from us little guys to big multi-million dollar projects. To protect yourself, run your numbers to account for projects taking twice or even three times as long as expected.  

Now is always the right time to buy—if the deal is right. The later mentality means you’re not actively looking now. There might be an amazing deal today if you are looking hard enough. Honestly, there probably is.