Finding Deals?
Is anyone else finding it extremely difficult to find good multifamily deals right now? Across several markets we are experience a dearth of product without being too picky.
[{"id": "ffc8a6i", "text": "Too much capital in the world right now. Fed has put too much money out in the world, held rates too low, and combined with a long expansion, means everybody is cashed up. \n\nAnd you are seeing it's impact everywhere. Everybody is seeking returns wherever they can. You see it in the bond market, equities, and in real estate. Sign of the times when everyone  is chasing junk bonds and mobile home parks.\n\nI was just looking at a 30 unit in a third-tier city that only local players would have really looked at 5 years ago. It had 10 offers in the first 48 hours.", "replies": [{"id": "ffc9puo", "text": "This for sure. There's a ton of cash on the sidelines that's desperate for yield, folks are getting less and less picky.      \n\nEdit: Unless you already have a fund or pool of capital that's accruing a pref, I would suggest patience. The market is going to go down, and there are going to be plenty of excellent opportunities for those of us who passed on mediocre opportunities at the height of the market.", "replies": [], "depth": 2}], "depth": 1}, {"id": "ffcjxni", "text": "I shared an office with these three rich kids that had a decent amount of capital under them. They were looking for a multifamily deal in the 30-40M range. \n\nOver the course of 18 months they couldn\u2019t find one deal to close on. Money is everywhere, deals are definitely slim. Everyone is trying to eat your lunch before it even hits the table in multifamily.", "replies": [{"id": "ffcl2s9", "text": "MF is arguably the easiest product type to wrap your head around, definitely contributes to the number of people looking for deals.", "replies": [{"id": "ffcmbsx", "text": "Don't forget about the fact that banks LOOOOOOVE MF !!!!!", "replies": [{"id": "ffcn1vz", "text": "What's not to love? Short-term deals with fairly predictable vacancy rates, short re-leasing timeframe with no capital outlays at roll (TI &amp; LCs), very stable revenues and capital expenditures, easy for a bank to manage via third parties in the event of an ownership default, the list goes on.      \n\nThe reverse is that all of this ease also makes it the first property type for some dude with a trust fund to try their hand at the real estate game. It also presents a fairly stable yield opportunity for institutional groups with a huge pile of cash that they need to put to work.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "fffn52c", "text": "which market were they looking at?", "replies": [], "depth": 2}], "depth": 1}, {"id": "ffcy1rl", "text": "Depending on the size, but all other projects are institutional capital, and most large scale value add projects have already been bought.\n\nSmall scale, everyone wants to be in the RE world now, so it is impossible to find 1-4 sfrs in many markets. I would love to sell my primary, but a 4-plex in a complex, live for two years, save, and buy a nicer house. But there is zero opportunity in the market. The feds have simply pumped too much cash into the system and everything is bid up as people/investors push further and further down the RE food chain chasing returns.\n\nWe have adjusted down our expected returns across our funds and portfolio. The returns that were possible over the last 20 years are no longer possible. Too many dollars chasing too few deals. Especially coastal markets where properties are trading in the high 3cap rates.", "replies": [], "depth": 1}, {"id": "ffdbeap", "text": "Have you tried checking online? Most listings are online now, realtor and zumbly are two of what I use.", "replies": [], "depth": 1}]