I need some ideas. I seem to be priced out of buying new inventory.

The SFH I was buying were in the $130-150K range with rents in the 1000-1300 range. I could make the numbers work for me in this range.

Problem now is very limited inventory of houses for sale, what is for sale has issues, and is priced in the $170K and up and I don't feel I can make the numbers really work at this price point.

SFH rents are rising but not as fast as the prices for the houses.

I've looked at MFH and there is no inventory to be had. The few options i have found have been way over priced.

I've looked at foreclosures and properties outside my preferred town.

Trying to be patient but it is hard when you want to build your "empire".

I remember back from 1978 when homes averaged 80K here in the San Fernando Valley of Los Angeles. They rose to an all time high of 250K in 1990. Only to fall down to $160K by 1997. Then the prices climbed again through 2006 to an average of 550K. Only to fall once again to 300K by 2009-2011.

Now prices are up to 850K.

What does all this mean? Timing. I purchased a 5 unit for $300K. Years later I purchased another 5 unit for $150K. Then some more years later purchased another for $610K. Do you see a pattern? There is a saying, buy low and sell high.

We thought we were out two years ago - the buying frenzy started here during Covid as people from NJ, NY, PA scrambled to get outta town. If they had to work from home, home might as well be a house at the beach...and even beach home prices were cheaper than northern prices.

But just by keeping an eye on things, we ended up buying two properties...One was a SFH with the potential to become a tri-plex. Overpaid for it a tad as a SFH, but not as a triplex! The next was a place in perfect condition sold directly to us by the family - elderly parents died, they didn't want to deal with it all. They called us, we grabbed it. We were going to flip it, but it was too good and kept it as a rental instead.

Roy, would you elaborate why you think there will be a recession in 6 months?

WMH,

The property you mentioned above in perfect condition sold directly to you by the family:

Was it a SFH?

What works best for you to get sellers to call you?

Thanks.

Dave,

We've been in this business ten years now, and it has been a constant story of "adapt or die." It was great the first couple of years. Then housing prices started to rise, followed by a significant shortage of reliable contractors. We started doing private lending, but that's not a great business to be in during a period of high inflation so we're transitioning out of that. We invested in a couple of short-term rentals, which are doing great, but I predict a glut of those along with increasingly stifling regulation (already happened in our town). We're now exploring rooming houses. I agreed to manage a couple for a guy who has too many projects on his plate right now, and itt will give me good insight into the possibilities.

There are a million ways to make money in real estate. Talk to lots of people. Keep yourself open to opportunities. We just got an accepted offer on a house with a huge vacant lot next to it. I'm going to plant black walnut trees there.

Bonanza,

My slogan is ADAPT. The only constant is change.

RE and business is always changing so we must adapt.

Renting is not always the answer. Flipping used to hard, now it’s profitable.

Handymen used to be everywhere. Not now.

Wholesaling is big in Indy but not in my town.

I just bought 3. Not smoking steals but with higher rents they will cash flow and are solid long term rentals with zero work needed.

My criteria has shifted. I no longer push for ROI. I look for minimal investment out of pocket, little to no rehab, nice home in nice area, garage, basement, easy to market, easy to turn over to a PM.

BTW I’m home and made it thru the first night without the bag.

PS back in the 80’s we also complained we were priced out by interest rates. But I bought anyway…cuz I didn’t know any better!!