patrick.net

GNL says

What is anyone's opinion, here, on how Soros has achieved his financial position?

@GNL I think the bulk of it is from shorting the British Pound at the right time.

WookieMan says

I could cash out $140k out of my house tomorrow. I don't pay taxes on it. And I could still sell the house at a profit.

Yes, and you would now have monthly payment you did not have before. And if you pay off the loan when you sell the house, you net $140,000 less. Again, why do all these "cash out" people forget about the newly generated loan payments?

HeadSet says

WookieMan says

I could cash out $140k out of my house tomorrow. I don't pay taxes on it. And I could still sell the house at a profit.

Yes, and you would now have monthly payment you did not have before. And if you pay off the loan when you sell the house, you net $140,000 less. Again, why do all these "cash out" people forget about the newly generated loan payments?

I believe I see the misunderstanding. Wookieman is correct that the tenants pay it. Here’s an example from one of the buildings we bought 5 years ago. 12 units @ $1k/mo/unit rent.

After 5 years, we had 3 turnovers where we rehabbed and rented for $1,850 each. That’s $2,550 increase in rent. 9 units are now at $1,275/month. That’s $2,475 increase/month. Total = $5,025/month increase. Let’s round it up to $5k.

Assume 30% is allocated to the increase in expenses. This nets us $3.5k/month in additional cash flow or $42k/year.

Unlike residential, the bank is the gatekeeper in CRE. The maximum they will lend on the increase cash flow is 1.25 DSCR (debt service coverage ratio). This means max cash out not to exceed $2.8k/mo (of $3.5k/mo increase in cash flow) in additional mortgage payment.

$2.8k/month can service $520k of debt at 5% plus whatever principal the tenants have paid down in the last 5 years that we can also cash out. Our cash flow will increase an addition $700/month while we got $520k of cash out + principal pay down tax-free/deferred.

Rather than getting $33.6k/year of cash flow ($2.8k/mo x 12 mo), we take $520k cash out now (equivalent to about 15 years of cash flow) and redeploy it to another purchase, which hopefully will help us generate more cash flow and equity. I hope this makes sense.

Eman says

Rather than getting $33.6k/year of cash flow ($2.8k/mo x 12 mo), we take $520k cash out now (equivalent to about 15 years of cash flow) and redeploy it to another purchase, which hopefully will help us generate more cash flow and equity. I hope this makes sense.

That changes nothing. You borrowed against one property to buy another, that is not free money. It is no different than borrowing money to buy real estate in the first place. If you had mortgaged that new property for that $520k, would you have considered that $520k free money?

Patrick says

GNL says

What is anyone's opinion, here, on how Soros has achieved his financial position?

GNL I think the bulk of it is from shorting the British Pound at the right time.

How does he have a reputation of crashing economies?

HeadSet says

Eman says

Rather than getting $33.6k/year of cash flow ($2.8k/mo x 12 mo), we take $520k cash out now (equivalent to about 15 years of cash flow) and redeploy it to another purchase, which hopefully will help us generate more cash flow and equity. I hope this makes sense.

That changes nothing. You borrowed against one property to buy another, that is not free money. It is no different than borrowing money to buy real estate in the first place. If you had mortgaged that new property for that $520k, would you have considered that $520k free money?

I look at it as an option:

1) either get $33.6k/year in cash flow for the next 15.5 year, or
2) get $520k now rather than over 15.5 year. I get a choice on what to do with that money now. Can park it in money market account and make 4%….ish if there’s no better use for it.

Another way to look at it, for someone who makes $33.6k/year, they have a choice of collecting $33.6k/year over the next 15.5 years, or get $520k now and work for free for the next 15 years. They get to decide however they want to do with that $520k now.

We can agree to disagree if you don’t see it the same way.

To add to the above, have to pay taxes on cash flow while no taxes to pay on the $520k cash-out now, or ever if follow the IRS tax code.

Eman says

We can agree to disagree if you don’t see it the same way.

We do not disagree about borrowing to invest. That is how most businesses work, in and outside of real estate. What I disagree about is that a loan is free money just because it uses real estate as collateral.

HeadSet says

Eman says

We can agree to disagree if you don’t see it the same way.

We do not disagree about borrowing to invest. That is how most businesses work, in and outside of real estate. What I disagree about is that a loan is free money just because it uses real estate as collateral.

It is tax-free money to investor because the debt is being serviced by the tenants/the asset’s cash flow. The money can be tax-free…forever if the investor follows the tax code. This is why most real estate investors don’t pay much in taxes. The tax codes encourage this behavior.

HeadSet says

WookieMan says

cash out refi and not pay taxes.

Of course you do not pay taxes on a loan, but you do pay interest. The rest of your post is just an abstract on the benefits of Schedule E, which are the same whether you borrow against the equity or not. I still get depreciation on rental property whether it has a lien on it or not. True, you do get to expense the interest on the Schedule E which partially offsets the cost, but you can deduct interest from a HELOC on your residence as well. Do you consider a HELOC to be "tax free money?"

Isn't it capped at $10K now?

Eman says

It is free money to investor because the debt is being serviced by the tenants/the asset’s cash flow.

If you just cash out equity, then the asset's cash flow is reduced by the amount of the loan payment. That is, YOU are paying the LOAN whether you invest it elsewhere or use it to buy a new truck.

Eman says

The money can be tax-free

What do you mean CAN be tax free - all loans are tax free. You are mixing your variables here.

Eman says

HeadSet says

Eman says

We can agree to disagree if you don’t see it the same way.

We do not disagree about borrowing to invest. That is how most businesses work, in and outside of real estate. What I disagree about is that a loan is free money just because it uses real estate as collateral.

It is free money to investor because the debt is being serviced by the tenants/the asset’s cash flow. The money can be tax-free…forever if the investor follows the tax code. This is why most real estate investors don’t pay much in taxes. The tax codes encourage this behavior.

i got me one rental btw. was really inspired by your story. its sfh. so will leave it for kids after i hit the bucket. cashflow is nice, although today bank interest pays similar or better rate. might get 2 more, all the cash i got left now just collecting about 4.8% should be enough for the 2 rentals.

RWSGFY says

Isn't it capped at $10K now?

You may be referring to the $10k limit on Federal deduction of State and Local taxes.

FortwayeAsFuckJoeBiden says

i got me one rental btw. was really inspired by your story. its sfh. so will leave it for kids after i hit the bucket. cashflow is nice, although today bank interest pays similar or better rate. might get 2 more, all the cash i got left now just collecting about 4.8% should be enough for the 2 rentals.

Congrats FortWayne. As Sam Zell learned it first hand during the early 1990’s S&L crisis, liquidity = value. If you can’t find good deals, keep the cash and collect your 4.8% interest. No need to force anything.

With respect to rentals, it depends on your goal. You can do it as a hobby and pick up one here and there. If you want to make it into a biz, you must think of scalability. Can’t scale too far with just your money/savings so the ability to reuse your seed capital is a must.

Stuff tends to break on a Friday afternoon, the weekends, or a long holiday weekend. Money will solve these inconveniences. If you have scale, your handyman will handle them. If your handyman wants to enjoy his weekends, your property manager will assign the work out to his contractors although my handyman loves to do these tasks on the weekends for a different reason. 😅 Don’t get burnt out being a landlord if you decide to scale it up.

At this point, I’m going to focus on adding more prime assets and keeping them for the next generation. I wish I had the capital to do it during the GFC. All nieces and nephew will have access to them as I believe housing will become even more expensive in the future. Can’t take anything with us when we kick the bucket. If we can take care of our loved ones in any way, it’s a great feeling.

Happy Memorial weekend.

HeadSet says

Eman says

It is free money to investor because the debt is being serviced by the tenants/the asset’s cash flow.

If you just cash out equity, then the asset's cash flow is reduced by the amount of the loan payment. That is, YOU are paying the LOAN whether you invest it elsewhere or use it to buy a new truck.

Eman says

The money can be tax-free

What do you mean CAN be tax free - all loans are tax free. You are mixing your variables here.

😁 👍

HeadSet says

RWSGFY says

Isn't it capped at $10K now?

You may be referring to the $10k limit on Federal deduction of State and Local taxes.

Nope, it's everything rolled together: state taxes and mortgage interest. And to deduct HELOC interest you must be ready to prove the money were used for property improvement.

RWSGFY says

Nope, it's everything rolled together: state taxes and mortgage interest

Are you sure about that?

RWSGFY says

And to deduct HELOC interest you must be ready to prove the money were used for property improvement.

This is true.

RWSGFY says

HeadSet says

RWSGFY says

Isn't it capped at $10K now?

You may be referring to the $10k limit on Federal deduction of State and Local taxes.

Nope, it's everything rolled together: state taxes and mortgage interest. And to deduct HELOC interest you must be ready to prove the money were used for property improvement.

Pretty sure that is incorrect. The cap of $10,000 MFJ is strictly on deducting state and local taxes, not mortgage interest. State income tax? Local income tax? Local property tax? Local sales tax? Vehicle tax? All yes. Not mortgage interest, that is a separate deduction line item.

ForcedTQ says

RWSGFY says

HeadSet says

RWSGFY says

Isn't it capped at $10K now?

You may be referring to the $10k limit on Federal deduction of State and Local taxes.

Nope, it's everything rolled together: state taxes and mortgage interest. And to deduct HELOC interest you must be ready to prove the money were used for property improvement.

Pretty sure that is incorrect. The cap of $10,000 MFJ is strictly on deducting state and local taxes, not mortgage interest. State income tax? Local income tax? Local property tax? Local sales tax? Vehicle tax? All yes. Not mortgage interest, that is a separate deduction line item.

I've confused it with the property tax. The cap on mortgage deduction is done through the size of the loan.

Eman says

Only the city of Berkeley and SF lunatic politicians would think of this stuff IMO. No one in their right mind would.

@Eman, how do you think California is going to pay that 800,000,000,000 reparation bill?

GNL says

Eman says

Only the city of Berkeley and SF lunatic politicians would think of this stuff IMO. No one in their right mind would.

Eman, how do you think California is going to pay that 800,000,000,000 reparation bill?

It’s a political stunt IMO. Won’t go anywhere. However, it’s beyond my control. I don’t worry about it. My goal is to do what I can control, and that is moving some real estate equity into cash and/or some sort of REITs and getting dividends on a monthly or quarter basis. It’s a form of diversification in the event CA real estate goes into 💩, which I highly doubt.

Liquidity = value. Liquidity can be deployed on lucrative deals where I can get my investment back in as little as 12 months.

Why would you spend $364k for a 2023 brand new 1900 sq ft home with all the latest fixins, brand new HVAC system, and builder assuming closing costs
https://www.zillow.com/community/port-st-john/2082764640_zpid/

When you can buy my late Grandma's 1300 sq ft shit shack for $335k, built when Reagan was running for his 2nd term, buyer to pay all closing costs?
https://www.zillow.com/homedetails/7044-Carlowe-Ave-Cocoa-FL-32927/43389850_zpid/

Complimentary flowery furniture, Pink Carpet, and Elvis Collectable Plates from QVC included! Act know and get a 20-year old roof just in time for hurricane season! Granddad's flacid-urethra-dribbled-on-the-rug smell at no extra cost!

(Notice the near 10% price drop in the past couple of months from $350k+)

AmericanKulak says

Why would you spend $364k for a 2023 brand new 1900 sq ft home with all the latest fixins, brand new HVAC system, and builder assuming closing costs
https://www.zillow.com/community/port-st-john/2082764640_zpid/

When you can buy my late Grandma's 1300 sq ft shit shack for $335k,

Location? Or just a seller who is out of touch with the market?

HeadSet says

Location? Or just a seller who is out of touch with the market?

Exactly, as location is usually the buyer's first requirement such as location's distance to work and family. That was the case when I was working in Manassas, VA.

I did not mind driving 35 minutes from the western boundary of Fauquier County near Blue Mountain to drive to work.

I paid same price for a 2 acre detached house as I would for a townhome in nearby Centerville, VA.

.

ad says

I did not mind driving 35 minutes from the western boundary of Fauquier County near Blue Mountain to drive to work.

You lived in a beautiful area. When I travel through that area, I always go on Rt 17 through Delaplane-Paris.

Investors officially abandon Housing Market in 2023 (49% Drop in Purchases).

It's official: real estate investors have abandoned the Housing Market in 2023.

With data from Redfin reporting a colossal 49% YoY decline in investor home purchases in the first quarter of 2023. This is the biggest annual decline in investor demand in US history (at least going back to 2000).

Investors purchased 41,000 homes in the counties that Redfin tracks in Q1 2023. Which is not only a 49% drop from last year, but also a significant decline from pre-pandemic levels.

Overall investors purchased 18% of the homes that sold in the quarter. Which is a slightly higher share than they were doing before the pandemic.

However, the overall drop in absolute sales indicates that the short-lived era of investor domination of the US Housing Market is over.

Rising Interest Rates nuked Investor Demand
Going back 12 months ago I was predicting that Wall Street Investors would exit the US Housing Market.

And my logic was simple: higher interest rates were going to make being a landlord unprofitable. And cause the Wall Street buyers to drop out. A reality which you can see clearly on the graph below, which compares the 30-Year Mortgage Rate in America to the Cap Rate for investors (the unlevered profit yield from the rental).

From 2015 to early 2022 the Cap Rate was higher than the Mortgage Rate. Meaning that Wall Street investors had a big incentive to take out debt and buy up homes. Since they were guaranteed to make money after paying their lender (in the business we call this spread "accretive leverage”).

But now this dynamic has completely shifted. Mortgage Rates started to skyrocket in early 2022. And by April 2022 the Mortgage Rate was officially higher than the Cap Rate. Which is precisely the point in time that investors began to make fewer offers on home.

Fast forward to spring 2023 and the situation is completely untenable for investors. The Mortgage Rate is 6.9% and the Cap Rate is 4.6%. Meaning that any investor who takes out debt to buy rental homes is guaranteed to lose money after paying their lender (we call this "negative leverage").

(Note: some people think mortgage rates don't matter for Wall Street investors because they "buy in cash". However, the underlying source of the cash is usually debt. Often raised from the Mortgage Backed Security market. With the debt priced at a similar interest rate to the prevailing 30-year Mortgage.)

Investors bailed everywhere. But especially in the Sun Belt.
The other interesting trend revealed in this Redfin report is about where investors bought fewer homes.

Metros with Biggest Decline in Investor Purchases
Atlanta: -66% decline
Charlotte: -66% decline
Phoenix: -64% decline
Las Vegas: -60% decline
Nashville: -60% decline
Jacksonville: -57% decline
Tampa: -54% decline

The investors bailed most on all the hot Sun Belt markets they piled into in 2020 and 2021. The markets they said were great long-term places to buy because of "all the people moving in".

Well, that was a bunch of baloney. All it took was some Jerome Powell rate hikes to sour investors on the idea of buying in Sun Belt boomtown cities. So much for these investors having a "long-term strategy".

What's even more interesting are the markets that experienced the lowest decline in investor purchases. It's basically the reverse of the above list.

Metros with Lowest Decline in Investor Purchases
Baltimore: -9% decline
Providence: -10% decline
Seattle: -16% decline
Milwaukee: -22% decline
Cleveland: -23% decline
Cincinnati: -25% decline

With the exception of Seattle, the markets that held investor demand the best were Northeast and Midwest "rust belt" areas. These areas largely go ignored in the national real estate discussion with very few big institutional players raising capital to buy homes there.

Which is precisely why they held up better. These markets are less reliant on the ebbs and flows of where Wall Street wants to put its capital. Rather, they're supported by local investors with a firmer knowledge base and tie to the area.

Going forward: it's all about Cap Rate
If you are an investor, or someone who wants to be an investor in the future, I'll say this: all hope is not lost. There are still opportunities out there and some markets where you can find success.

However, your main guidepost for finding these markets and deals needs to be about Cap Rate. That is, how much rental profit you earn from the property (net income / purchase price). Because in this higher interest rate environment, cash flow is going to become the key measure of success.

High cap rate markets/deals give investors this cash flow from Day 1. You can actually buy a rental and start putting money in the bank right away. Rather than having to hope and pray for rent growth and appreciation into the future to "save your investment".

The map below shows the metros in America color-coded by their Cap Rate. And what you can immediately see is that the highest Cap Rates (rental profits) are found in the Midwest and Deep South.

Whereas the lowest Cap Rates are in the Mountain / West regions of America, as well as select Northeast markets. You can access this data for yourself by going on Reventure App and selecting "Cap Rate" under premium data points.

And just so you can understand these differences practically, let's compare two markets: Pittsburgh, PA and Phoenix, AZ.

An investor looking to buy a home in Pittsburgh would be looking at paying around $200k for the typical house and could expect to earn around $14k in net income before paying interest. Good for a 7.2% unlevered return.

Metro: Pittsburgh, PA
Purchase Price: $198,928
Net Income: $14,285
Cap Rate: 7.2%

Now, let's compare that to the experience of an investor who wants to buy in Phoenix. They would have to pay around $435,000 for the typical house and they'd take home $21,000 in net income before interest. For a measly 4.9% cap rate.

Metro: Phoenix, AZ
Purchase Price: $435,984
Net Income: $21,367
Cap Rate: 4.9%

If this investor is using mortgage debt to facilitate the transaction, they will likely be losing money in Phoenix after paying their lender. And desperately praying that rents in Phoenix will surge in coming years to bail out their investment and make it profitable.

Low Cap Rate Markets at the start of a long Bear Market?
No wonder investors are bailing on Phoenix. It just doesn't make sense to buy there. And ultimately I think we could be at the start of a long bear market for these expensive, low Cap Rate markets.

Especially across California. Where you can see that metros like San Jose, Los Angeles, and San Diego offer investors miniscule cap rates ranging from 2.5 to 3.5%. Those returns are less than what someone could get by buying a treasury bond.

Other markets with low cap rates include Austin, Seattle, Salt Lake City, Portland, and Denver. I suspect these areas are in for an investor bear market so long as interest rates remain elevated.

These markets will also likely have lower regular homebuyer demand going forward. Because a low cap rate essentially means that home prices have grown a lot faster than rents. Indicating that it's cheaper for households to rent in low cap rate markets than it is to buy (something you can confirm on

Reventure App by clicking "Rent v Buy Calculator" under premium data points).
So long as it remains significantly cheaper to rent than to buy, households will sit on the sidelines and wait for home prices and mortgage rates to drop further.

Wall Street bailing is a WIN for Regular Homebuyers
Lastly - we need to acknowledge how this collapse in investor home-buying is a WIN for the regular homebuyer in America. Especially in metros like Charlotte, Atlanta, Phoenix, and Jacksonville, where investors lost the most market share according to Redfin.

In a metro like Charlotte investors went from purchasing 33% of the homes one year ago to only 18% of the homes in Q1 2023. Similar declines in investor share (gains for regular buyers) occurred throughout much of the Sun Belt.

Of course - homebuyers in these cities are still unhappy. Because they see prices and mortgage payments that are way too high. Far beyond what they can afford in many cases. They also see low inventory levels and are frustrated from 2+ years of searching for the right home.

And ultimately this frustration is understandable. The Housing Market is frozen right now and a tough slog for both buyers and sellers. However, the thing to remember is that housing downturns take time to play out. Often 4-5 years. And we are just now exiting Year 1 of this housing downturn.

Note that back in the mid-2000s bubble the investor purchases peaked in 2005, a good three years before prices began declining substantially. The decline in investor purchases was a leading indicator about what was coming for the market overall.

Ultimately home prices and mortgage rates still have a long way to go down before they reach levels where they entice both investors and regular buyers to come back into the market.

https://www.reventure.app/blog/investors-officially-abandon-housing-market-49-drop-in-purchases

Bitcoiner says

zzyzzx says

Fingers crossed. Would like to buy another rental at a discount soon.

That sounds weird. You invested for future equity even to the degree you'd take a cash flow loss but now you'd be happy to see all of your sweet equity disappear?

Sounds like investors are still purchasing.

Wonder what happens when they start selling.

Bitcoiner says

equity in my homes going up or down doesn’t mean much to me

So the dopey Biden administration floated out the idea of taxing unrealized capital gains, so maybe you can claim unrealized RE losses, if it goes that way, on your taxes. :>))

Bitcoiner says

Sry I am not following. Why would my equity disappear? I am not selling any real estate. In fact I plan on holding my RE and hand it down to the kids. I root for lower prices so I can buy more. equity in my homes going up or down doesn’t mean much to me for the next 5 plus years. I can’t do a cash out refi with these high rates and I actually don’t plant to refinance for a while anyways.

I think you might be a Realtor...it's ALWAYS a good time to buy. Suzanne researched it.

Bitcoiner says

Now they are selling houses in my neighborhood for 450-500k more than what I paid. Get this big smile everytime i think about it.

Is Bitcoin still going to hit $100,000?

Bitcoiner says

The rents I have seen and I charge are 2.2k-2.4K for 1500-1800 Sqft in the west valley.

Yikes! Have long have you been charging that much? I only paid $1550 for our Glendale place at just over 1500sqft with pool. Had an agent show us some rentals as part of my relocation package, and he tried to tell me I'd never find a pool for under $1600. And from what I remember, the further west you go, the cheaper, and larger the housing. Over 2,000sqft for around $1,700. And this was just three years ago.

Looks like things haven't changed that much, not sure why anyone would pay over $2,000 to live outside Scottsdale...
https://www.zillow.com/maricopa-county-az/rentals/?searchQueryState=%7B%22pagination%22%3A%7B%7D%2C%22usersSearchTerm%22%3A%22Maricopa+County%2C+AZ%22%2C%22mapBounds%22%3A%7B%22west%22%3A-113.33249520703126%2C%22east%22%3A-110.99790048046876%2C%22south%22%3A32.81029779712092%2C%22north%22%3A34.22536616414657%7D%2C%22regionSelection%22%3A%5B%7B%22regionId%22%3A2402%2C%22regionType%22%3A4%7D%5D%2C%22isMapVisible%22%3Atrue%2C%22filterState%22%3A%7B%22fsba%22%3A%7B%22value%22%3Afalse%7D%2C%22fsbo%22%3A%7B%22value%22%3Afalse%7D%2C%22nc%22%3A%7B%22value%22%3Afalse%7D%2C%22fore%22%3A%7B%22value%22%3Afalse%7D%2C%22cmsn%22%3A%7B%22value%22%3Afalse%7D%2C%22auc%22%3A%7B%22value%22%3Afalse%7D%2C%22fr%22%3A%7B%22value%22%3Atrue%7D%2C%22ah%22%3A%7B%22value%22%3Atrue%7D%2C%22sqft%22%3A%7B%22min%22%3A1500%7D%2C%22beds%22%3A%7B%22min%22%3A3%7D%2C%22baths%22%3A%7B%22min%22%3A2%7D%2C%22apco%22%3A%7B%22value%22%3Afalse%7D%2C%22apa%22%3A%7B%22value%22%3Afalse%7D%2C%22con%22%3A%7B%22value%22%3Afalse%7D%2C%22tow%22%3A%7B%22value%22%3Afalse%7D%2C%22mp%22%3A%7B%22max%22%3A1900%7D%2C%22price%22%3A%7B%22max%22%3A370493%7D%2C%22sort%22%3A%7B%22value%22%3A%22days%22%7D%7D%2C%22isListVisible%22%3Atrue%2C%22mapZoom%22%3A9%7D

Bitcoiner says

GNL says

Bitcoiner says

Now they are selling houses in my neighborhood for 450-500k more than what I paid. Get this big smile everytime i think about it.

Is Bitcoin still going to hit $100,000?

I recommend we just talk RE in this thread.

Hahahaha

@Bitcoiner

My point is 1. you were wrong about bitcoin and 2. you lucked into RE. No one predicted what happened between 2020 and 2022.

@Eman is a much more reliable source of information because he gives much better information and it is not a stretch, at all, to believe he did his research in 2010(?) and went full force into RE.

zzyzzx says

Last quarter of 2023 will be interesting, with 2024 elections in November. Let's go Brandon.

gabbar says

zzyzzx says

Last quarter of 2023 will be interesting, with 2024 elections in November. Let's go Brandon.

I have a commercial realtor client and he says commercial real estate is doing very well. He/we are in northern Virginia.

GNL says

gabbar says

zzyzzx says

Last quarter of 2023 will be interesting, with 2024 elections in November. Let's go Brandon.

I have a commercial realtor client and he says commercial real estate is doing very well. He/we are in northern Virginia.

@GNL,

I think 2 asset class, that will get hit harder than others, are office and retail although Arbor had to foreclose $230M in Class C multifamily apartments from a syndicator in Houston.

We haven’t felt it here in San Jose and Bay Area in general.

This whale in my market is trying to flip this turnkey building for 4.4 cap. Who is going to pay that in the current market? It’s negative leverage right off the bat with NO upside potential. This pocket/street is weak too for the pricing.

Funny this deal came across our desk last year. We offered $5.2M for it. We believe we could make it worth $7.8-$8M when done. The listing agent was whispering $5.5-$5.6M to the deal to go down. Then out of nowhere this buyer paid $6.8M for it. We were shocked.

Eman says

This whale in my market is trying to flip this turnkey building for 4.4 cap. Who is going to pay that in the current market? It’s negative leverage right off the bat with NO upside potential. This pocket/street is weak too for the pricing.

I imagine there's an equation I could use to figure out the asking price? What is he/she/they asking for it now?

@GNL,

$9.35M. His pro-forms is pure horse 💩

I know both agents. Bought something from Mitch before. Haven’t been able to strike a deal with Carlos….yet. Nice guys. They’re sharks, but the more “ethical” sharks. 🤪