All Forum Posts by: David Friedman

Hi Ryan,

There are winners and losers in every type of market, including a down market. Buying the deal right is more important than the timing is what I am trying to say.

I'm from Los Angeles and I just found a good deal in San Diego that I am going to buy to fix, but not flip (Keeping it for my brother to live in). I found this deal off of the MLS, which is pretty rare, but it can be done. In this case, there was a tenant in the property stalling the sale of the deal. The agent couldn't show the property to any potential buyers. Because I was consistent, as soon as the tenant left, the agent reached out to me first. No one else realizes that this property is available again and most have quit trying to make an offer on it.

If you aren't finding deals, you need to increase your network (More wholesalers and more real estate agents) and you need to be consistent. People like to work with other people that are consistent. They'll give you first shot at a deal because you follow through on what you say.

Drama between friends, family and real estate is how most real estate deals come to me. Some people would prefer a haircut rather than have to deal with the reality that their friends or family are taking advantage of them.

If you can buy the property from the landlord at a discount that makes the headache worth it and have a plan in place to evict the non-paying tenants, I say you should make an offer.

I would avoid, evicting or sending rental increases to all tenants at once. If you've seen in the news, that could cause tenants to strike.

Start with your units that are in the worst condition or are paying the least and work your way up from there. Most people don't have the volume or the team to handle 10 vacant units all at once, so it's better that you take on a few at a time while collecting rent from the current tenants.

 I'm happy to see how open minded you are Rich! Many developers that I know would prefer to work with men. I think we should all consider working with more businesses that are owned by women!

Know when to turn down a deal.

There are many people that will sell you a property convincing you on the opportunity, even though the analysis you have says it doesn't make sense. They don't lose if they sell you the property, but you will lose if you are easily convinced. Stay strong to your numbers and listen to your gut.

On the same note, know when to say no to working with someone.

If you start to become successful, many others without an inkling of what they are doing or a dime to their name, will start to ask for your help. Be very careful who you work with and don't let anybody waste your time. When starting out in real estate, it is hard to tell who will waste your time and who won't, but you will learn very quickly which cues to look for.

Hi Marty,

It really depends on your goals and where you are at in life.

If you are risk averse, then buying a house for cash is probably your best bet. If you are in the "Expansion" stage of real estate acquisition then it sounds like your $100,000 could be used to buy 3-4 units in your market if you use financing.

I don't know your local laws, but normally, you are required to honor the lease in place if you purchase a property with existing tenants. They are required to honor it as well.

Initially, you should send them a letter letting them know that you are the new landlord and where they can make their future rent payments to. Other than that, it depends on your plan.

If they are bad tenants and not paying rent, kick them out and get new tenants. If they are good tenants, but need to raise the rent, give them notice before the end of the lease that you will be raising rent.

@Richard Sherman

I think it takes someone as seasoned as yourself to not take every bit of dollar offered to you. Some dollars are worth more than others as you’ve explained. Thank you!

It depends on the individual and their lending relationships, but in general there are a couple of rules that apply to each refinance:

Usually banks want to see:

1. Provable Income (Monthly bank statements show rent checks coming in)

2. Your previous loan is seasoned (Usually 6 months)

3. The property is in good condition

The ROI seems good, but there may be a reason for that. I would be asking the seller some questions.

Are there expenses that the seller hasn't posted?

How are they calculating that ROI?

What is the area like? Crime? Up and coming area or in the middle of nowhere?

Normally, if a good deal is posted on Loopnet, it's swooped up in a few days, if not a few hours.

That being said, have you purchased any houses? What makes you sure you can handle multiple units?

What is your game plan with these units to add value? As of right now I see that you are asking for capital to buy the units, but someone with capital could find their own deal and buy it. How do you add value by being involved?