All Forum Posts by: Vika Bha

@Derrick E., thanks, that is useful to know. I was wondering if maybe offering 20% less than the purchase price was too low. But seeing that you and other investors offer around 50% less, my 20% doesn't seem too low. I suppose I need to keep looking for an agent willing to offer lower. Do you almost always offer less than the listed price? Even if the purchase price generates good cash flow and fit all your criterion?

I am having a hard time buying properties. So far, I wanted to place offers on two properties. They were listed on the MLS, I made an appointment with my agent to view them within 1 week. Just within that time period, both times, the properties went under contract before I even saw them. I know the obvious answer is try to see them ASAP but I work full time so I need at least a couple of days. And, the most recent time, I was very interested and wanted to see the property the following day. But, my agent wasn't able to set up an appointment for me to see it until 4 days later and the property sold by then. I am uncomfortable making an offer site unseen especially since I am new. Any advice?

@Derrick E., how do you find an agent willing to offer a low number? Or stay firm with an agent unwilling to offer low? The agents I speak to are uncomfortable offering a lower number. And I am offering about 20% off the market rate. 

Just out of curiosity, why would an accredited investor put money into crowdfunding when they can just invest with a syndicator? Is it just a lower minimum with crowdfunding that's attractive? 

The returns with buying and renting a property (if bought correctly) seem higher than syndication or crowdfunding? Is this true? Is the advantage of syndication/crowdfunding for truly passive investing?

@Jody Schnurrenberger

Thanks for that information. Just some basic information on the property I am considering, it is $300K, 3 family, 2280sq ft, owner occupied (assuming it's in somewhat decent condition), rents are $1400 (4BR), $1100 (1BR, 1BA), and third unit is owner occupied (2BR, 1BA). Rental comps in the surrounding area are slightly more than what this home is renting for. Homes similar to this sold for $220-$300K depending on number of units, the $300K unit was 8BR, 3BA and sold back in September 2017, this home is 7BR, 3BA.

Insurance is $800/yr, Tax is $3538, property management is 10%/month. If I assume the owner occupied unit will also rent for $1100, this property does seem to cash flow. I am going to visit the property shortly and try to get all expenses such as utilities, lawn/snow removal, pest control, advertising, heat, etc, and also find out actual property tax and insurance numbers (got the above numbers off the internet). I plan on using 8% vacancy and 10% Capex, 5% maintenance, 11% prop management. Let me know your thoughts on this initial analysis. I am seeing it soon.

I appreciate your sharing your experience about bidding lower. Like they say, make money when you buy so I'll put in a lower offer, if I lose it, I can always find something else eventually. Can't believe Brandon Turner offers about 50% less and obtains the homes. Glad your mom made it through : ) Hope you ended up finding a nice retirement home for her!

@Rich Hupper

The property I described above is in a decent market and people are buying properties in the area for much higher than asking price so chances are, I'll get rejected but I'll probably try to offer lower anyway. If I lose it, try again I suppose : )

How would one find off market deals? Especially for multifamilies. I live in the northeast just like you, if I knock on a random door, I don't know if that will be received well? Would I just ask if the owner lives there? And if he/she interested in selling?

@Jody Schnurrenberger

Thanks! I've heard to offer 10-20% lower than the market price. Don't know if this would apply universally, even to cash flowing properties.

@Jack Bobeck

I often hear "you make money in real estate when you buy, not sell". But what does this actually mean? And how do you know when you make an offer, if you are overpaying or not. Let's say a property does cash flow and costs $300K. Do you look at surrounding comps? And how do you know what offer without low balling and upsetting your realtor/broker?

Do most of you buy moderately to minimally distressed properties versus "turn key" ready to rent properties? If so, why? Wouldn't you save the costs for rehab by buying the turnkey properties?

Thanks so much for all the advice

@Todd Dexheimer 

Thanks, that's an excellent article, it taught me more than I've learned in several books I've read!

Which would the more seasoned investors out there prefer for someone interested in smaller multifamily units such as 3-4 units? This would be my very first property.

1.  A more expensive property ($450-500K) with less return (due to higher price point) in an area that has job growth and population growth, up and coming popular scene, cap rate around 5%, about a 1.5hr drive from me.  

2. a medium expensive property ($300K) in area with good schools, cap rate about 7%, local to me (15min), low crime, nice town, stagnant or slightly decreasing job growth and population

3. A lower priced property ($150-200K) in a B/B- area with slightly more unemployment, decreasing population and decreasing or stagnant job growth, cap rates from 8-10+%

I guess I am trying to figure how important population growth and job growth are to picking a market. Areas near where I live are declining so I would have to go a couple of hours away to find the good markets. And prices are more expensive. So I am wondering what would be a better strategy. 

I am interested in long term buy and hold. Thanks

How do some of the experienced investors select a market for multifamily. I imagine it would be different than for a SFH. For instance, school districts may not matter as much? Would like a higher renter ratio, etc? What are the most important parameters?