My question is…do the good multi-family properties get eaten up quickly by investors or could they potentially stay in the listings for a few months? Half a year? Year?
thanks!
Too many factors for a pat answer, but depending on the market, et al yes they could. Not likely, but they may.
What level of prospecting are you willing to do (pay for)?
I’ll take the risk of giving you a pat answer. :biggrin :biggrin :biggrin
The good deals rarely become listings… So, the days on market is kind of moot…
That said, stale listings are traditionally better prospects to make offers on than fresh listings, all things being equal.
The open secret to getting real deals, is getting to the sellers first, and creating a relationship with them before they think about selling. This takes some time.
This is what agents do to find the juicy pocket listings that they’ll market to their pocket buyers before the public ever has a chance to bid. So, you can be your own pocket buyer and uncover your own “pocket listings.” :beer
You can accomplish this several ways, but it all requires you to reach sellers before anyone else knows they’re thinking about selling. This isn’t a secret or anything new, but agents will never suggest this to you… :banghead
It all depends on the motivation of the seller. People who own multi-family properties are usually smart business people who are going to try to get top dollar at first, unless it was inherited. But, motivations may change in a year and he may be forced to sell it at a deep discount. In a year, he might reduce the price by a third or more making an overpriced property a good deal.
Good deals usually come from motivated sellers. Realtors always say a seller is motivated but they have no idea what that means. In general a motivated seller has to sell because he wants the money there is room for a deal in the equity and he does not want the property. In general motivated sellers have one of the big 4 Ds. Death, Disease, Divorce, or Destitution. These situations cause the property to come on the market usually at a very good price right off the bat. If the property has been on the market a long time the seller is not motivated. If he can hold the property for nine months trying to sell it he can hold it for a year. No matter what they say he is not motivated.
I usually add 2 more “D”'s : Drugs and Dumb.
If you honestly believe that, I think you’ve missed out on a lot of great deals. Not saying it’s true in every case, but I’ve found them. A lot of things can change for a seller in 3-6 months.
Thanks for posting this question amtel, I’m in a similar position so I’ll share a little of what I’m seeing in my area. Hope this helps!
I’m a newbie looking to acquire my first rental property. I’m looking at multifamily REO’s, usually duplex to fourplex. In the areas I’m looking at they go very quickly, within days, and there are usually multiple offers, so the selling price is often higher than the original listing price. I’ve been tracking selling price to listing price, and comparing them with my math to see if I think the selling price will still cash flow, and in all cases so far they will.
That said, I finally feel confident enough to move forward on a place. The place was listed on Thursday. Put in an offer this morning. Got the call an hour ago that multiple offers had come in and now I need to give my final offer. Fortunately I came to the table prepared for this scenario, and I knew what my final offer would be from the start. I’m pretty excited, but I’m trying to do what all you experienced folks say: buy smart not emotional! Keeping my fingers crossed on this, but I know if it doesn’t go through there will be other opportunities.
Just want to say thanks again to all the pros on this website who are so knowledgeable and encouraging to us newbies!
I am sure I do, but I don’t want nor can I handle every deal. I also have to have a system for generating houses when I am buying houses and waiting on people’s situation to change doesn’t really work for me. Like it says in Leviticus 19:10, you should not glean the field. There are plenty of deals for everybody. There are a lot of techniques I don’t use, like I don’t use auctions (although I did buy a house for $700 at an auction) These techniques are too inconsistent to be used as a primary tool for generating houses. If you are developing a system for doing this business sitting there staring at a bad deal hoping it changes into a good deal doesn’t really work for me.
You’re wasting your time with duplexes thru fourplexes, especially if they’re listed on the mls. That’s what all the amateurs buy, and they’re willing to pay way too much for them. You have to buy 5+ unit properties or steal a lot of sfh’s if you want good cash flow.