Real estate investors - how do you get more properties?

[Andrewski]

So I currently have 2 duplexes mortgaged through the bank. They are both doing well and each one is $500/month cash flow. I would like to continue growing but the banks won't approve me for another mortgage. I've sifted through a few threads about seller financing and I responded to a bunch of seller financed ads but none of them have even replied back to me. I even have $50k cash available to work with! How do you fastlaners get more properties?

 

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[H. Palmer]

There's not much RE investing going on here.

Have you tried responding to Craigslist ads yet?

 

[ZCP]

Birddogs.

 

[lleone]

Try a portfolio lender or speak to a really good mortgage broker. There's a ton of money out there offered by lenders, private equity, even individuals.
The issue is the interest rate tends to be higher. To really start to grow, you need to bring in investors. They put up the money, you find, renovate and rent the properties, you both split the profits. Repeat.

 

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[Even Steven]

So I currently have 2 duplexes mortgaged through the bank. They are both doing well and each one is $500/month cash flow. I would like to continue growing but the banks won't approve me for another mortgage. I've sifted through a few threads about seller financing and I responded to a bunch of seller financed ads but none of them have even replied back to me. I even have $50k cash available to work with! How do you fastlaners get more properties?

@Andrewski, like @H. Palmer said there isn't a whole lot of real estate investing on this forum (compared to other types of business). You'll find more at sites like biggerpockets.com.

Check out this podcast. This is from 2 years ago, but this lady had done over 150 deals at that point, and she talks a lot about non-traditional financing to acquire more properties.
http://www.biggerpockets.com/renewsblog/2013/01/24/subject-to-direct-mail-woman-investing-podcast/

 

[Chazmania]

Yeah the mortgage industry really is crappy for REI at this time. We've been buying small deals for cash and renovating then renting. Of course the area isn't exactly paradise... So far it's working great, you just need to find an area within an acceptable driving distance to you. Maybe that is or isn't an option for you depending where you are located. I find a deal, and from the time I walk through it to the closing is between 10 and 14 days. Banks are a real PITA at the moment.

 

[CashFlowDepot]

You don't need bank financing or a mortgage. Instead, look for retiring landlords with multiple properties who will sell to you with seller financing.
A property management company may know a landlord who wants to retire.

One time I got a call from a lady who inherited 220 properties when her Dad died. She lived 4 states away and did not want the properties and did not want to deal with it. Check probate.

Any landlord who is dealing with evictions is a motivated seller. Check eviction listings. Or even better, go to eviction court and hand out your business card that says you solve real estate problems.

Just because a property is not advertised with seller financing does not mean the seller will not sell with seller financing. You certainly will not find good seller finance opportunities advertised on MLS

The absolute best deals are not advertised at all!!!

 

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[SteveO]

Are you still around?

I have found the best way is to sell and trade up. Go from 4 units to 16 or so. Continue until you have 100+ unit building.

 

[Kevin Peter]

Behind every asset lies a crime Use the non-traditional way! Am sure there is a way to work it out. Following the thread for some real good updates

 

[Andrewski]

Are you still around?

I have found the best way is to sell and trade up. Go from 4 units to 16 or so. Continue until you have 100+ unit building.

Sounds easy haha. At what point would you sell? A 16 unit in my city is at least $2 million. It would take 13 years for my duplexes to have enough equity/cash saved to cover 20%

 

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[SteveO]

Sounds easy haha. At what point would you sell? A 16 unit in my city is at least $2 million. It would take 13 years for my duplexes to have enough equity/cash saved to cover 20%

I'm guessing that we have different processes. My method is to buy properties that are undervalued for one or more reasons, fix those issues, and sell for a higher amount. This allows for a continual trade up.

There are times where you might hit a market cycle that is so hot that even the distressed properties are garnering a lot of interest. In that case I will take a break. Right now, I am liquidating most/all of my apartments. There will be a time to jump back in when the market changes.

 

[SteveO]

I would suggest reading two books. They are older but the processes are still relevant. I based my entire apartment career on a combination of these.

How to Buy and Sell Apartment Buildings - Vollucci
The Complete Guide to Buying and Selling Apartment Buildings - Berges

 

[unorthodox]

Buy a list of multi family list owners from Listsource.com

Door knock or mail the addresses in the list with a handwritten note indicating interest in the property.

Or use Intelius to find the owners contact number

 

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[Deocto]

Sheriff's auctions, county silent auctions, and an annual county tax lien auction are excellent resources for picking up properties in many jurisdictions.

 

[MKHB]

Buy a list of multi family list owners from Listsource.com

Door knock or mail the addresses in the list with a handwritten note indicating interest in the property.

Or use Intelius to find the owners contact number

I'm guessing that we have different processes. My method is to buy properties that are undervalued for one or more reasons, fix those issues, and sell for a higher amount. This allows for a continual trade up.

There are times where you might hit a market cycle that is so hot that even the distressed properties are garnering a lot of interest. In that case I will take a break. Right now, I am liquidating most/all of my apartments. There will be a time to jump back in when the market changes.

^^^^Spoken like someone who remembers what happens when things go bad. Steve O is right.

I am a GP in a couple of well performing RE investments MF/NNN/Neighborhood Centers, and because these assets were purchased as "loan to owns" during 2009-2012, the yields are pretty solid and the limited partners are constantly talking acquisition....what can we buy, let's hurry and get more before it's too late; it's already too late, it's been too late since 2013.

If you want to play the RE market -buy shares in a REIT, moderate movement to the upside, coupled with a 6-7% dividend and you get close to a 10% yield if the market keeps advancing.​

And, best part is you don't have to unplug any toilets and it's liquid - so when the institutional investors that bought at a 10-12 CAP prior to 2010 realize that they can "recycle" their portfolios and lock in 30+ IRR gains (which they have) you can put in a sell order and be out in 5 minutes before you get scalped.​

Tread carefully

 

[Deocto]

^^^^Spoken like someone who remembers what happens when things go bad. Steve O is right.

I am a GP in a couple of well performing RE investments MF/NNN/Neighborhood Centers, and because these assets were purchased as "loan to owns" during 2009-2012, the yields are pretty solid and the limited partners are constantly talking acquisition....what can we buy, let's hurry and get more before it's too late; it's already too late, it's been too late since 2013.

If you want to play the RE market -buy shares in a REIT, moderate movement to the upside, coupled with a 6-7% dividend and you get close to a 10% yield if the market keeps advancing.​

And, best part is you don't have to unplug any toilets and it's liquid - so when the institutional investors that bought at a 10-12 CAP prior to 2010 realize that they can "recycle" their portfolios and lock in 30+ IRR gains (which they have) you can put in a sell order and be out in 5 minutes before you get scalped.​

Tread carefully

I don't know. As an investment vehicle, REIT's can be great but there's no Control for the Fastlaner. Like all markets, there's money to be made on downsides and ups, depending on where you're standing.

EDIT: Excepting Detroit.

 

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[MKHB]

I don't know. As an investment vehicle, REIT's can be great but there's no Control for the Fastlaner. Like all markets, there's money to be made on downsides and ups, depending on where you're standing.

EDIT: Excepting Detroit.

All good points, but it seems the RE market is at a bit of an inflection point.

 

[SteveO]

There is certainly money to be made in all markets. You have to know which market that you are in though. You also need to be very aware of what you are buying when markets are hot.

It is so much easier to make money when you can buy at 500K and sell at 1M. This is not easy in a hot market. It is possible but it is also possible that you will buy at 500K and be stuck with something that is worth less if the market goes south on you.

I am not going to buy a REIT myself for reasons that you stated. @MKHB was simply making the point that the market seems to be overheated for the buy and hold investor. I mainly deal in cashflow properties but do not really buy them for cashflow. I buy them to fix and sell.

I do believe that there is room in the single family home side right now. The apartment market is overheated and the commercial market is very close behind. Use some level of caution if buying into these markets.

 

[MKHB]

There is certainly money to be made in all markets. You have to know which market that you are in though. You also need to be very aware of what you are buying when markets are hot.

It is so much easier to make money when you can buy at 500K and sell at 1M. This is not easy in a hot market. It is possible but it is also possible that you will buy at 500K and be stuck with something that is worth less if the market goes south on you.

I am not going to buy a REIT myself for reasons that you stated. @MKHB was simply making the point that the market seems to be overheated for the buy and hold investor. I mainly deal in cashflow properties but do not really buy them for cashflow. I buy them to fix and sell.

I do believe that there is room in the single family home side right now. The apartment market is overheated and the commercial market is very close behind. Use some level of caution if buying into these markets.

Another option is to look into crowd funding sites, e.g, Realty Mogul, Rich Uncle.

Obviously you do not get the element of control, however; you do get a glimpse into syndicated RE strategies you would normally not be allowed. It would be like looking over @SteveO shoulder when he's doing DD on a potential deal.

They provide real set up sheets for a variety of syndicated RE strategies, how they are structured and waterfall (payout).

And more importantly, by getting exposed to asset classes beyond residential, you enter the realm of institutional, high net worth, and speculative builders...where you will find your Fastlane Gold; the needs, the pain points - opportunities for Fastlane orientated "picks and shovel" type sales.

In some ways it's similar to participating in TMF forum: Insight into the thinking and processes of people that are really doing it, and doing really well.


Good Luck, can't wait to here more about your progress!

 

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[jtmoniii]

So I currently have 2 duplexes mortgaged through the bank. They are both doing well and each one is $500/month cash flow. I would like to continue growing but the banks won't approve me for another mortgage. I've sifted through a few threads about seller financing and I responded to a bunch of seller financed ads but none of them have even replied back to me. I even have $50k cash available to work with! How do you fastlaners get more properties?

Dude - I had the same problem - before I was a banker.

The trick is to go to a community bank. The smaller the better (tons of irony in here).

You can easily get a commercial loan. However, they aren't as cheap as mortgages 4-7%; 20-year amortization.

 

[Deocto]

Despite the market possibly being on

There is certainly money to be made in all markets. You have to know which market that you are in though. You also need to be very aware of what you are buying when markets are hot.

It is so much easier to make money when you can buy at 500K and sell at 1M. This is not easy in a hot market. It is possible but it is also possible that you will buy at 500K and be stuck with something that is worth less if the market goes south on you.

I am not going to buy a REIT myself for reasons that you stated. @MKHB was simply making the point that the market seems to be overheated for the buy and hold investor. I mainly deal in cashflow properties but do not really buy them for cashflow. I buy them to fix and sell.

I do believe that there is room in the single family home side right now. The apartment market is overheated and the commercial market is very close behind. Use some level of caution if buying into these

Disclaimer: I'm still slowlane. I've yet to purchase my first investment property, though I own my humble home outright. I'm about to incorporate my first RE company. I've studied alternative purchasing strategies in my market extensively.

Personally, as a rule, I wouldn't buy anything using any traditional method in a hot market, almost ever.

And if you have a method that works well and master it, why pivot or over complicate your strategy unnecessarily. Admittedly, my self proclaimed untested expertise specializes in the cheaper subset of homes that assess for 35k - 250k. Not as fast of a lane as SteveO's.

My only point was that in any market (that's achieved some equilibrium, not blazing hot or frigid) there is fantastic ways to purchase on the cheap.

It makes me ill watching all the deals that float by in my home town while I build my initial start up capital and erase all my slow lane debt.

Another method aside from those I mentioned aligns with the poster who said bird dogging. But have a professional do it for you. Many real estate agents specialize in investment properties for investors with varying criteria. I have a list emailed to me biweekly from a local agent listing several places that she thinks meets my parameters.

 

[Deocto]

I messed up the code somehow. Ech! Phone browser. If anyone cares, my reply is in that quote box.

 

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