All Forum Posts by: Nick Coons

I know this is an older post, so was curious if there was any updated information on the deals they have available.

I signed up to receive their listings a few days ago, and since then have seen a handful of listings for my target area come through. I've spent just a few minutes checking each one, but here's what I've found preliminarily:

1) Each property that they've provided is listed, but under contract with them. This isn't inherently bad, but I had assumed they would be finding their own off-market deals rather than those found on the MLS. This is interesting though, because I can see what they advertise it for, and what it's listed for on Zillow, and see what their assignment fee is (so far, anywhere from $9k to $50k).

2) Each property that they advertise as available (again, I've only received a handful so far, so this might not be typical) is being priced at-or-above market value. So I'm going to keep checking out the listings over the next couple of weeks and see if they have anything available at below actual market value.

Quote from @Brandon Goldsmith:

It is a lot more difficult so find good cash-flowing properties in hot markets. That is the case here in Columbus. I would suggest either being more patient or changing your criteria. @Nick Coons

I'm fine with being more patient. I'm not sure what you mean by "changing your criteria". Do you mean that there are different things I can look for that will help with cash flow, or do you mean that I should change my plans in such a way that cash flow is no longer a requirement (at least in the short term)?

Quote from @Tristan Gardner:

I feel ya. I'm having a difficult time finding deals that cash flow well on the MLS. Redirecting to off-market by driving for dollars with direct mail seems to be a better approach up in my central Ohio market.

So far I've been limiting myself to the MLS because I'm just casually browsing right now (I'm having to build infrastructure at this point, building lender relationships, getting pre-qualified, acquiring cash for a down payment), so I'm about two months out before I can put an offer on anything yet. But I'm thinking about a similar approach in the sense of identifying off-market properties on which to make offers (I'll be signing up for Propstream's trial to see how well that list-building effort works).

How have you fared in finding off-market deals with your approach?

Quote from @Andrew McGuire:

@Nick Coons

Yes what you said but in reverse, I will evaluate for other strategies I use that are more actively managing that produce higher CoC but I still want the property to have a 1:1 DSCR (Debt Service Coverage Ratio) with all expenses/reserves. I never want to be in a situation where I am cashflow negative if AirBnb, FF or Room by Room dry up. Its hard to do but there are deals that meet that criteria out there.

Will a DSCR-based lender provide a loan on a property with a 1.0 ratio? What I've been seeing are usually 1.2 minimum requirements.

While the ideal is to find something that's cash-flow positive and appreciates well, my primary consideration is the appreciation, with positive cash-flow (or at least not negative cash-flow) being necessary to make the process repeatable. So I've been consider a ration of something like 5:1 LTR-to-STR properties, so that the latter would provide the cash-flow necessary to support pursuing the former.

I don't mind the more active environment of STR. I already own and operate a non-RE-based business, have for years.. so I'm familiar with building teams, training, building systems, and managing. I don't want my existing business to directly (i.e. with cash) support my new RE venture long-term.. I want the RE venture to stand on its own (though I'll definitely be infusing it initially). So I think using the STRs as the cash-flow of the business in order to reduce the demand of my LTRs to cash-flow (so I can focus on equity) might be the way to go.

Do you have any thoughts on that approach?

The feedback that I'm seeing here is that what I'm suggesting is likely not worth it, and what you've all said makes sense. Appreciate the input.. thank you!

Quote from @Bruce Lynn:

Why not just take the classes but never sit for the test.  You can do them online probably for about $400.  Will give you some knowledge of contracts, forms, vocabulary, laws, etc.

I'm not familiar with the process (i.e. the classes versus the licensing), but that certainly sounds like a reasonable plan.

I'm an investor working on the BRRRR method, and I'm considering getting my RE Agent license. Not for the license itself, I have no interest in showing properties or representing other parties, but rather for the education, to go through the classes because I think there are some benefits to me in learning that area.

So my question is about a potential side benefit. This won't impact my decision because it's not the reason I'm doing it, but just curious if it works this way. If I were to go through this process, would I be able to "represent" myself as the buyer's agent and be entitled to a portion of the commission as would be the case if I had contracted with a buyer's agent? Or does it not work that way?

I don't think that's true. There's a huge difference, from several perspectives, of acquiring one (or a couple) multi-family properties per year, and acquiring 1.4 properties/month.

As to the remainder of your questions, I think those are valid and I'd love to see the answers to that. My guess is that the progression wasn't linear (as it typically isn't). It might be that in the first year, he house-hacked a four-plex with help from his parents with a down payment. Then after a year, refinanced and used that to continue. It's certainly possible that in the first three years he only acquired three of his 100 self-owned units, and acquired the remaining 97 in the last three years.

But yes, it'd be great to have answers on these.. perhaps he has some creative funding techniques we can all learn from.

Quote from @Wayne Kerr:

Still, we are talking 1.4 properties a month (minimum), from getting past the learning curve to - finding the deals, managing the rehabbing, financing, hiring employees, getting prop management in place etc - on more than one property a month from beginning to end.

Unless I missed something in the OP, I don't think "unit" equals "property" in this case. It could just have easily been about one 20-unit property per year. Still impressive, but not the same as acquiring 1.4 properties/month consistently for years.

Quote from @Brian Pfiel:

Also, dont ever let them know you are appraisal shopping!

Interesting.. in your experience, how does this affect the outcome?