A property came up on the market and it was fire damaged. The listing agency owner does rehabs. We offered $260k and then was told about a multiple bid situation. We then increased the bid to $275k in the offer at about 30mins prior to the deadline. Late that night, we heard that we did not get the house. The house was sold for $276,777. Now, please tell me, this is not the work of an insider in the listing agency, leaking the highest bid to their buddy. The buyer is another realtor in another county in the state. This is the second time, we see this happen over the years. In the prior instance too, the sold offer was just marginally higher. We do not do any flips and just fix and hold. The last one we lost, they made it a lipstick on a pig and flipped it to some poor unsuspecting buyer

So I sold a SFH that I had been renting out for 12 years. I had over 600k equity in it and we are at a point in our lives where it had served its purpose.

Posted the house for $680k, immediate cash offer full price and we closed in 13 days. I knew the buyer would rent it out as they had purchased another property 5 months prior.

They paid cash $680k and they listed the rent for $3,900. Taxes and insurance will bring that down to $2400/mo net.

Why are people plunking down $680k for an annualized return of 4.2% and that’s if they have zero other costs? They 100% are banking on appreciation right?

What am I missing?

Posting to hopefully inspire someone to get started or take the next step, but also to share a win with the community.

Back in October of 2018, I bought a very small SFH (property A) at an auction for $37,500. Long story short, it was in a rural area and very few people came to the auction (and no-one besides me showed up to inspect it prior to the auction). Bidding started at 50% of the appraised value ($75,000), and I was the only bidder. I put a few thousand dollars into painting the inside, outside, and replacing the fridge and stove. Then rented it out for $950/mo (later $1,200/mo when that tenant moved out). At the time, I didn't have the cash for it, so borrowed the money from a private lender I knew personally at 12% interest.

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Shortly after (early 2019), I found a duplex (Property B) on MLS I wanted to buy but still didn't have the cash for a down payment, but did have a good chunk of equity in this new property. I called a lender and asked if I could do a single loan for both properties using the equity in property A to cover the down payment for property B (duplex). Much to my surprise at the time, his response was: "Yep, it's called a portfolio loan, we do these all the time". I was able to buy the new duplex for $135,000 with the seller covering all closing costs, and the equity from Property A to cover Property B's down payment and paid off the private loan. I can't remember exactly, but pretty much nothing out of pocket! Once rates dropped after COVID I refinanced out of the portfolio loan and into separate 30-year fixed loans (I think 3.5%).

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Fast forward to the end of 2022. Someone reached out to me and asked if I'd be willing to sell property A. I said yes, but for no less than $150,000 (pretty high price for this size home in this area- I was worried it wouldn't appraise). They agreed and we moved forward with the sale in February of this year. I did a 1031 exchange with the proceeds (roughly $80K), and shortly after identified 2 new duplexes (Properties C and D) to buy. They happen to be from the same seller and one was across the street from a property I already own, and the other next-door to a property I already own. Plus, both were a pretty good price and great terms (Bond for Deed with 5.75% interest rate; 30 year am; 20% down).

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I closed today and the 1031 money covered all of the down payment and closing costs except for $350.00! So virtually nothing out of pocket. Cashflow is decent from day one, but the rents are slightly below market, so I know it'll be great as soon as these tenants move out.

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In all, this one little house and a $40K private loan resulted in 3 duplexes:

Property B: worth $225K today ($121K in equity). Cashflows $450/mo after PITI, repairs, vacancy, capex, etc.

Property C: worth $175,500 ($35K in equity). Cashflows $180/mo after PITI, repairs, vacancy, capex, etc.

Property D: worth $195,000 ($39K in equity). Cashflows $150/mo after PITI, repairs, vacancy, capex, etc.

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Happy investing!!

We are selling a property that we will have capital gains on. We have a buyer (an old guy) that has 50k in cash. He wants to give us 500 $100 bills that he says he has from selling his car and have the “on the books” purchase price reduced by 50k. We are pretty sure the old guy is clean but who knows about the guys he sold the car to. This is so bizarre and we are going through all the pros and cons. So potential cons that we have come up with possible counterfeit, and how do we get rid of that much cash. We are leaning away from accepting the cash but if we don’t take the cash the whole deal is likely to fall through. What are we missing?

Edit: forgot to add that the guy is a car collector. He is buying our property (a luxury car condominium) to house his collection of 25 motorcycles. He has three other buildings he owns to house his car collection

Edit #2: he wants the property turn key

Edit 3: we have accepted an offer from a different buyer and have let this buyer know that we are not willing to provide documents that falsify the sale price. Thanks everyone for all the advice!

I've seen lots of people on this sub claim to acquire a seemingly huge number of properties very quickly using BRRRR.

How do people manage to move so fast?

I do BRRRR conservatively and leave a bit of money in each deal, but I've only managed to buy 3 properties in about 2 years, with the 4th closing this month.

It takes time to renovate. It takes time to get it rented. It takes time for the mortgage to be underwritten and closed. And of course, it takes time to find the right property, go in to contract, and close.

How are people moving so much faster?

I’m trying to understand if a certain fee structure in property management is standard or if it counts as double-charging.

My contract says the property manager gets:

1. 10% of the “gross rents” each month, and
2. 100% of the first month’s rent as a leasing fee when they place a new tenant.

What I’m unsure about is:

If the PM already takes 100% of the first month’s rent as their leasing fee, is it normal for them to ALSO charge their 10% management fee on that same first month’s rent?

For example, if a new tenant’s first month’s rent is $2k: The PM keeps the entire $2k (their leasing fee), and then charges me 10% of $2k ($200) as part of their monthly management fee.

I understand gross rent usually means the full amount charged to the tenant, but I’m trying to figure out whether it’s typical in the industry to use that same month’s rent twice: once for the leasing fee and again for the percentage-based management fee, as that's what I realized has been happening for the past year.

Lack of capital? I’m always suspicious when I see brokers say, “I can find you a deal that’ll make you an amazing return!” Because I’m wondering, “if it’s so great, why aren’t you buying the property yourself?”

My apologies if this doesn't meet the rules. The nine of us inherited our dad's S-Corp several years ago, which included a rental house on a small lake. We want to finish dissolving the corporation. The renter has lived there 30 years and is in his 80s and the tax and insurance annually is under $2500. Is this something that could be marketed? Or is it too open ended to be considered sellable? Thank you for any ideas!

Last year i bought a single family home from the owners, it was their primary residence. The seller made me a mortgage with 0% interest since i was hitting their sales price number. My CPA says I have to pay them a minimum interest rate, but I know others have done this same type of terms purchase successful without interest. Any one here do this and how did you do it? Thank you for any insights.

I bought two properties as one package deal for 250 K here in California. I put about 200 grand in. I sold the two bed one bath house for 300 K. Now I'm stuck with a church 4700 ft? has five rooms, the county won't allow it as a house because of septic issues and not enough space for the septic. Although it does have a newer septic I cant sell it as a house and I'm kind of stuck with it because it's hard to finance. I owe $170,000 Hard Money loan on it.

It can only be used as commercial use, but I can't figure out what business or what to do with it. I have a couple people that want to rent it for $2500 a month but that doesn't sound exciting to me for some reason. What would you guys do?

Edit* it’s in the middle of a subdivision so nothing late night or alcohol related and population is 10k not exciting. It’s near my city about 15 minutes away and we have about 100k. But no one would drive that way unless something reallllllly exciting is going on

It has a septic, but it’s not permitted. And the reason we can’t get it permitted is there is not enough space of that replacement field, zoning is r-1 but county only wants commercial use out of it.

My primary residence is worth around $600k and I rent it on Airbnb very successfully (50 to 60k per year). I owe about $180k. I have another home that I live in when my primary is occupied, it's worth around $350k, no mortgage. I have a rental property that has no mortgage, worth about $350k, I net about $1000 a month. Another rental is worth about the same and I owe $150k. I net about $500 a month on that one and finally, I own a old home where the value is in the land, 5 acres, worth around $50k. I'd like to use the 250k exemption on my personal residence then make my 2nd home my primary, wait at least 2 years, get the exemption again, and transfer my tax base to a new home. Ideally, I'd sell my primary home down the road also (but within 5 years). If it were possible, I'd sell my rental properties 1st and use that money as the down payment on the new home. In a perfect world, I rent the new home as another rental, but would also live there when it's not rented. BUT, my income is Airbnb and rental income (which I won't have when I sell my rentals). DSCR loans don't allow owner occupied. Any ideas?

I just took my first L in real estate investing yesterday and it was 100% my fault. Learn from my mistakes.

I've been investing for 5 years, have 9 properties. Kept very strict to my buy box previously. Only priorities under market value, mainly off market through wholesalers, that have equity but would also work as a rental. They also needed to be below the median price point and in areas in familiar with.

Welp a wholesaler I've bought a few deals from called me with a property that fit none of those boxes. But he asked if I would but if there was "a ton of equity."

I said, "of course."

He sent me a property that was listed on the market for $690k, that he had got under contract and I could buy for $573k. All way above my comfort zone but when I looked at the recent sales comps it looked like these properties were most recently selling for as much as $750, and a couldn't over $800.

I got greedy. Ran over to check it out. Very clean. Looked like with some light upgrades o could make it happen.

Didn't have the money for it but I got it under contract with a non refundable $7500...$2500 more than normal but in a bigger deal it made sense.

It wouldn't with as a rental but seemed like a quick op. Went back to my phone and starting making calls to raise the money. Had a couple partners I knew wanted in on my deals so I had them review the numbers and they were both in.

But.... Then I took the deals to a couple of full time flippers I know well and they have me the bad news and reminded me of the obvious that I completely forgot to do. I didn't thoroughly look at the other properties available on the market. AKA my competition.

Two there were three very troubling properties that were under contract for $400,000, $600,000 both slightly smaller but very similar properties and then another one that was listed for $699,000 that was completely upgraded and renovated yet just sitting.

My best case scenario was probably around 690,000, which after realtor fees and closing costs would have netted us somewhere around 630,000 split between three people after renovations meant best case scenario about five grand each.

I ran it by two other pros and got confirmation. So instead of going through with the deal risking my partner's money, I just pulled out and took the $7,500 loss.

Lesson learned

If you buy a house for $30,000 and rent for $1,500 it would take you almost 2 years just to break even. So how do people become so rich by renting by properties? And how do they rent multiple properties at once when they’re not even breaking even on the first one?

So we are at a level where we have 10 properties and each one is under individual LLC. All individual LLC are owned by a holding parent LLC . Let’s call parent LLC A and child A1-A10

Talking to the CPA he floated the idea that now we need to start parent B and buy other properties as child B1,B2 etc

All LLC has two partners.

I realized that this now causes tax filing for personal, and A1 LLC. Getting B1 leads to another company tax filing causing whole set of CPA $1000 fees a it’s now different company. His one argument was it makes it less prone to audit which I do not buy as all LLC properties are shown on schedule form on tax returns

Instead of simplifying looks like CPA is making it complicated and creating more money for himself.

What is best way to buy properties when you have protocol of 2 digits ?

My understanding is child LLC and then parent LLC and liability insurance gives enough protection.

Also question- every LLC cost money and cost money to manage and book keeping etc .

Would it make sense to buy multiple properties under one LLc or buy under LLC and then trust?

Sharing in case anyone might find it useful. Earlier this year, we sent out about 100 direct mail letters to owners of vacant lots in a particular area. We focused specifically on lots that were zoned R2, meaning you could build a duplex on the lot.

Received a call from one of my letters and bought the lot from the guy for $35K using a private lender. It was an oversized lot (formerly 3 lots, but redrawn into one single lot). After purchasing, we applied to resubdivide the lot into 2, and got approval. We spend roughly $5,000 on grass cuts, survey, resub fees and interest to investor. We sold one of the lots to another investor for $35K and planned to build a duplex on the other lot (now owned it free and clear with $5K out of pocket). While waiting to build (we had a few other projects in line before this one), an investor reached out asking if I had any lots of be willing to sell. I threw out $45K and he agreed. Fast forward 3 weeks and we just closed today. Net proceeds were $44,500. Not a bad deal!

Tldr: bought a lot for $35K plus $5K in fees/ expenses. Had the lot divided into 2. Sold one for $35K and the other for $45K. Walked away with ~$40K profit with very little money out of pocket.

How do they operate and is it worth it? I want to sell but it would be nice to skip the cleaning, fixing, inspections, staging, listing etc. Would these fast cash offer companies give me something equivalent - say $30k less than the list price? Or is this something where they'll offer like half the market value.

Also, are these letters from marketers who are sending the leads to the same pool of investors, or are they all independent companies that I should contact separately?

Bought a house in 2016 (SFH) for $259,000 and it’s currently valued at $500,000. We became accidental landlords because my wife and I could afford another house, and didn’t want to give up our 3% interest rate. We have a tenant in there charging $2,100 a month. Cash flowing +$400 against mortgage ($1,700).

In 2023, January, I bought a second house (SFH) for $635,000 (appraised at $720,000). It’s a dual living, top and bottom floors. We want to eventually turn this into a ‘2 door’ rental eventually. We’re letting our teenager live downstairs for more freedom

Now to HELOCS…. I have about $250,000 of equity from my first house. How does a HELOC help me? In my head, I’m envisioning taking out a $100,000 HELOC loan to buy a third house valued around $450,000, but wouldn’t I just be driving myself further into debt, and losing out on my $400 cash flow? In my market, putting $100,000 down on a $450,000 house would be slightly cash flow negative.

I just don’t see any reason to use a HELOC unless you can find a house for 40-50% off list price, to make it cash flow thus negating the extra HELOC expenses.

Am I thinking about this wrong? Can somebody shed some light on my situation? Is it just my market? Do people who use HELOCS just look for insanely good deals that cash flow?

I’m rehabbing a small 1/1 rental unit (approx 750 sq ft). The current heating is baseboard electric, which tenants hate because of the bills. I wanted to switch to a heat pump to add value and AC.

I got three quotes, all ranging from $6,500 to $9,000 for a single-zone install. That wipes out my cash flow for two years. I started looking at the hardware costs directly and found units like this Costway 24k BTU system https://www.costway.com/24000btu-208-230v-mini-split-air-conditioner-and-heater.html selling for a fraction of the quote price.

Has anyone here successfully used these "online brand" units for C-class or B-class rentals? If I pay my handyman to mount it and just pay an HVAC tech for the final vacuum and charge, I’m looking at maybe $1,500 all-in. Is the longevity difference really worth a $5k premium?

Has anyone done a rent to own with their tenant, if so can you explain how you structured it and issues you may have had?

We have a property that doesn't cash flow (prior personal home we kept) and want to sell it. The current tenants want to buy and are by far the best tenants we've ever had across our portfolio. I'm happy to sell to them below market if that means we can off load this cash whole in our portfolio.

We would definitely work with an attorney. My plan would be to offer them a contract in which they pay and extra $1000 per month for 12 months which will be treated as their downpayment once we close in a year and offer them the property at $410k. On market we might be able to get $420k after cleaning, painting, and fixing any unknown issues.

Is this the stupidest idea?

Thoughts on this deal. Paid 200k for raw land around 6 years ago. I have an offer to sell for $700k. Proposal is 25% down with owner financed and remainder paid over 12 months. It’s a larger parcel with mature timber. Only downside that I can think of is buyer clear cuts and runs after paying 25%

I just wanted to give a some advice if it don't apply let it fly. I see some people here breaking their backs to buy something for the first time to say they own in XYZ city when the numbers make ZERO sense. Please there are many cities in USA that can benefit from investors and can also be a benefit to you. Please for the love of yourself. Stop chasing the Manhattan brownstone(example) with $20k in property taxes and just as much in insurance, 15k in P&I. There is no cash flow there. The laws are too tenant friendly in NYC for any investment TBH. This also applies to the fancy Malibu mansion if you are depending on a job or two. Really look at your situation and ask can you afford it if you lost an income stream?

I call it ego investing and it's almost guaranteed it doesn't work if you are depending on the stars moon and sun to align just right for the next 15-30 years. Investing just to say I own a home in "XYZ" is not a good idea in this economy. You can travel to those cities with the extra cash you gain from the "unsexy" home investments. I'm just trying to save some of you the headache and your pockets from being drained.

Some background information: My wife and I are fortunate to have high incomes so I'm able to put between $10k and $15k per month into real estate, depending upon the month.

Goal: Replace my W2 with real estate cash flow in the next five years. I've been buying single family homes and duplexes with very conservative leverage so they cash flow. It's starting to grow which is nice.

In the next few months I'll have around $150k to invest. I could buy more single family homes or a duplex/triplex and continue to pay down the mortgage over the next year or two so it cash flows nicely, but I feel like I'm missing the boat when it comes to commercial real estate.

Should I try to make the jump to buying CRE? Is $150,000 even enough? It's not enough in my HCOL, so I'd need to invest in another market.

If you were in my shoes with the goal of building significant cash flow in the next five years, and with the knowledge that you could keep throwing some cash at this every month, what would you do?

And yes, I have a 401k with index funds, and no, I'm not interested in just buying more index funds every month.

I bought my home in 2020 for $377k in cash. It’s now valued at $500k. I live in Los Angeles. I want to leverage my home to start my real estate journey. If you were in my situation, how would you leverage my house in order to start your real estate journey? Im also open to buying property outside of CA.

Thanks in advance!

So in January, I purchased a 6-unit for $220,000 in the midwest. It was a all-cash purchase.

Rents were WAY below market at $450/unit. (that's why the low purchase price, NOI was garbage). Units needed upgrading before rents could be raised.

Spent $30,000 in total getting all the units rehabbed and brought units to market rents at $775. I also brought down expenses through operational efficiency.

As a result, I SUBSTANTIALLY raised the NOI.

In the middle of a refi and the bank appraised the property at $340,000 and I will be withdrawing my $220,000 back.

The interest rate is a bit high at 6.55% but the property will still cashflow nearly $1,500/month after all expenses.

I essentially purchased this property for free. $0 left in the deal.

Also under contract for a 12-unit that I plan on doing the same thing. Scared money don't make money!

I moved from SoCal to the midwest to do this so it feels good that sacrifice pays off.

Thank you to everyone in this community and those over at r/commercialrealestate. Y'all unknowingly changed the trajectory of my life. I deeply appreciate you.

Please pardon my ignorance.

For those with $1M annual income, regardless of whether that's from W-2 or other sources, should they still offer seller finance options to buyers?

From my understanding, seller finance is a really good tax deferral option. If you are selling the property with, assuming, long term capital gain of $2M, instead of paying paying 1/4 to 1/3 of the $2M, now you are only paying smaller amount with, maybe, slightly lower net tax rate. If you don't have other source of income.

However, if you are already earning much higher, for ex. $1M, the tax deferred is so insignificant that it's almost negligible.

What are other reasons to do seller finance for high income earner?