All Forum Posts by: Michael Williams

It looks like you have figured out quite a bit from basic analysis.  Good for you.  There are excellent responses here for you already.  The one thing I did think about was how they may seem a little intimidating.  My best advice is spend time on the numbers, do as much work as you can doing a market analysis so you know where the market is trading and what the rents are.  One way a friend made buckets of money was to leverage interior upgrades and amenities to increase rents.  Adding laundry etc.  This may sound expensive but when you are talking about decent increase in rent it's the best money you can spend.  Don't get intimidated.  The business isn't that complicated. Ive owned many deals for a long time, have made tons of mistakes and I'm still here.  Main thing in this market is don't overpay. Seems so many are doing that.  

Make sure you know how to realistically calculate an NOI. BP has great tools to create an investor summary etc. Try to pitch the deal to a private money dealer and see what they tell you. There are so many by the time you hit the third or fourth one you will be a pro :)

I'd say the best advice is wait too.  There are signals to look for to gauge market cycles.  Don't buy on pro forma with the typical "just raise the rent" to make the numbers work sales pitch.  You sound very bright and ambitious.  Take your time and this business will reward your patience.

Tampa REIAs.  There are a few on meetup.  Go right to the source of wholesalers at these meetings. 

Sqwuaaaak.. multiple offers...sqwuaaak. For fun let us assume Matts "could probably" 50K NOI.

700K exit @ 7cap ... 4 plex    (high but hey.. the market is hot right?)

Offer "in the 3's" accepted...

Tear down rebuild 4X1000 sq ft 2/2s @ $130 per ft (low) = 520K plus "offer in the 3's = rectal bleeding. Excluding carry.. commissions..closing...contingencies ..  

OR SFR 4K sq ft would need to close over 1M. Who's in?

The same could be said for a 100 unit deal.  More units the lower the impact on your occupancy when you have people move.  I'd say do the deal you are comfortable with and then keep moving on.  Don't over think it.  Use the calculators they have here (BP) to make sure you are in at a good basis.  Thats really the biggest mistake people make.  I'm sorry but sellers, realtors and anyone on the other side of the equation LIE.  Do your math and you will be fine.

This is the ugly underbelly of our business.  Humans.  I had a mother of three late during Christmas about TEN years ago.  I gently asked her when she would pay, and she freaked out on me saying how could I throw her out during Christmas with three kids.....  I mean I gently asked her.  Ten years later her then boy friend tells me she died and remembers how I was going to throw her and the kids out during Christmas!  Small town.  This business is not for the weak.  She left owing me about 3K that spring.  No evection no cops just left.

I agree with the posters that say put the money where people can see it.  Forget over building.  I have the same tendency to build the way I would want my house to be but buyers are ruthless.  Build to the level of places close to you.  You won't get you money out if you go over.  

I'll take a shot at this. 

Of course.  Cash flow is king.  ROE, cash on cash etc rocks. You can sell the deal the same way you bough it after banking cash flow for a stretch if you want to. Do the numbers on what your return would be against the amount of money you have in the deal.  Don't kid yourself about expenses.  A duplex "should" be easy to determine.  Do it.  Have you read around this forum about how to calc expenses?

I think the main issue is that this was a "professional" with all the tools and training that others in the same business posses.  

Those that get upset about my not having done more DD in order to verify the agents overestimation is testament to the fact that there are abuses on a regular basis.  

Reread, reread.

Best guesses should be left to clairvoyants and charlatans.  When one consults a "professional" it's for their expertise.  I guess RE agents aren't really worth dealing with if the investors have to "verify" a best guess.  Does this mean we really don't need agents at all? Seems that way if we read those who say we need to check the value for accuracy or "buyer beware".   

Thanks again everyone.  I am genuinely surprised at the response I have gotten and do not want to escalate this any further. No I'm not going to publish a name, etc.  I'm commiserating with comrades only.   Yes, in hindsight and to help others considering house flipping, get an appraisal. I heard from another agent, one of the best I have spoken with to date, who told me what I "wish" I had heard before I got into this deal.  Exactly the market knowledge and professional insight we dream about but rarely receive.  I have to say I spoke with two broker/agents who redeemed my faith in the system yesterday about this deal.  

I'm purposefully omitting details as locals can probably narrow this down to names and I'm not trying to hurt anyone. As I mentioned above, just commiserating. 

"Look on the bottom of a MLS listing"... did you know if you read that backwards in latin you'll start the apocalypse :) ?

I'm looking forward to my next deal and consider this a $$K lesson, although I would have preferred a mastermind in Vegas for that kind of outlay.  In closing my previous deal was a grand slam. I have to say in my 20+ years of investing, RE is by far the most lasting best way to create wealth.  For new people to the business my advice is to partner in a "small club" deal to work out the kinks, learn and if there is a loss it's not the end of the world.