My journey with NetWorth Realty Tampa

Rehabbing & House Flipping
7yFollow

My journey with NetWorth Realty Tampa

Ken Calvin
Rental Property Investor · Sacramento, CA · Member since 2017 · 36 posts · 22 votes

My background

I've been investing in SFRs in my local market since the 2009 crash. I started off pretty clueless but ended up with a few successful rental properties. If I got to do it over again, I would have been much more aggressive. I've been seeing appreciate slow down and last year, I became interested in turnkey rental properties in other states. This year, I started selling my local inventory to buy out of state SFRs. So far, I'm pleased with the higher cash flows and ROI.

Meeting NetWorth

This year, I started going to my local networking meetings. One meeting, David Greene was the speaker and I was introduced to BRRRR. I bought and read his book, started talking to people in Tampa, trying to meet wholesalers, lenders, property managers, and contractors who I can trust. This proved to be as difficult as I imagined it to be. While searching on Craigslist for an "ugly house" to buy, I called the contact and met my NetWorth contact.

Getting acquainted

The first impression of my NW contact is that she is very easy to work with; she answers her phone or calls me back right away, very knowledgeable about the process, and is very friendly. She also worked with a few contractors and property managers, so the referrals would be invaluable. NetWorth also bundles in the hard money lender, 212 Loans. This sounded like a BRRRR dream-come-true.

My first almost deal

I had to apply for a loan with 212 Loans in order to receive deals as they came out (rather than waiting 48-hours like the cash buyers) but that was okay because I needed a lender anyway. After months of seeing deals, I finally saw one that I liked. My contact went to the property, dragged a contractor along last minute, and showed me the house via video call. It looked pretty good and the contractor thought the $35k rehab estimation in the NW packet was about right, so I wired in my $5000 deposit and received the contract to sign. The contract was definitely written to benefit the seller, hands down. Basically, after signing the contract, I would either dive in and hope for the best or lose my $5000 deposit. If I was a lawyer, I'd probably tell my client to run away because of how it was written. Anyway, I decided to go in so I got in contract to buy the house. My contact and I bugged the contractor for 1.5 weeks and he finally got us a bid for $48k. With the bid being $13k over NW's estimation, there was no money to be made, so we would have to find another contractor to do it for less. I wasn't going to throw away $5000 by walking away, but the day before closing, we found out that the owner could not sell, after all, due to how much he owed. Title problems was the only way to get out of a contract without losing the deposit and this qualified, so I was able to get out of this contract relatively unscathed. Also, I thought NW closes a purchase first before selling to investors (double-close), so this would never happen, but I'm glad it did.

My first deal

I came across another house that fit my criteria better. This one would make sense to flip or to hold as rental. The only thing I didn't like very much was the area's crime statistics, but I guess I would have to sacrifice something in order for the rest of my criteria to work. Again, my contact showed me the house with the contractor over video call and I said "okay, send me the contract." I got in contract and my contact helped me get a bid from a different contractor who she likes better. The NW rehab estimation was $40k but the contractor knew the area and decided it would be much more suitable to make it a rental, so he bid it at $43k to rehab as rental-grade instead of flip-grade. I guess I wish NW's estimations were better but at least I'm not dreading it like last time. Closing time came and the closing costs were higher than their financial analysis ($9k vs $7k).

Next steps

I just closed the purchase a couple days ago so I'm waiting for the contractor to tell me the schedule of the rebab and ask for a deposit. I'll post updates about this project periodically and hope that writing my experience helps BPers understand what NetWorth offers.

2Reply
197 views

Most Popular Reply

Masaki Maeda
Lender · Charlotte, NC · Member since 2016 · 34 posts · 21 votes
7y

@Ken Calvin Ken, I live in Tampa and invest in the area.  I can tell you about good areas and up and coming areas and areas to stay out of.  If you have a property here and need some boots on the ground I can help with that as well.  I am currently working for a commercial general contractor so have contacts as well if you need.  

PM me and we can speak further.  No need to pay me or give me anything, I'm here to help.  

-Saki-

3Reply
See this reply in the discussion

22 Replies

Jump to latestLatest
  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    7y

    I hope it works well, but it seems like most others, their marketing is better organized than their other systems. Getting to closing without knowing the seller is upside down just shows s lack of thoroughness. 

    I'd be shocked if you BRRR out after you're done....turnkey guys don't sell with much equity.

    1Reply
  • Masaki Maeda
    Lender · Charlotte, NC · Member since 2016 · 34 posts · 21 votes
    7y

    @Ken Calvin Ken, I live in Tampa and invest in the area.  I can tell you about good areas and up and coming areas and areas to stay out of.  If you have a property here and need some boots on the ground I can help with that as well.  I am currently working for a commercial general contractor so have contacts as well if you need.  

    PM me and we can speak further.  No need to pay me or give me anything, I'm here to help.  

    -Saki-

    3Reply
  • Nick C.
    Investor · Tampa, FL · Member since 2011 · 2k+ posts · 3k+ votes
    7y

    I wouldn't lose any sleep about being a couple grand off on the rehab or closing costs, the real test is going to be when you attempt to refinance, assuming you can get the rehab completed. I hope the appraisal comes in at a palatable number. 

    1Reply
  • Brian Mcmenamin
    Rental Property Investor · San Diego, CA · Member since 2018 · 176 posts · 83 votes
    7y

    @Ken Calvin Thanks for putting this together. Great to hear your experiences specifically with NetWorth..

    0Reply
  • Paul Schu
    Rental Property Investor · NC, IL · Member since 2018 · 86 posts · 47 votes
    7y

    @Ken Calvin nice post! I will follow along and I hope this goes smooth. What made you decide to invest in Tampa over other cities?

    0Reply
  • Jason D.
    Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
    7y
    @Ken Calvin I recently met with Networth Realty and came away very impressed with their operation. Like anything, trust but verify when it comes to the numbers, but I can see myself working with them on future deals. Keep us posted on the project as it progresses.
    0Reply
  • Ken Calvin
    OP
    Rental Property Investor · Sacramento, CA · Member since 2017 · 36 posts · 22 votes
    7y

    My purchase closed the week before Thanksgiving week so some things hadn't happened as soon as it would have any other week. However, my contractor (my NetWorth contact got us connected) was on top of things and start working on the house very quickly. Yesterday, he sent me photos of the progress and I'm pleased with how quickly he is working. The initial draw of about $6500 was out-of-pocket and he said he'd work with 212 Loans this week to get the work "inspected" for the next funds draw.

    Soon after closing, my contractor told me to get the utilities turned on because they were all disconnected. Duke Energy was very easy to work with and get set up. St Pete Utilities was much more difficult to work with (lacking customer service skills), but went very smoothly after talking to the right person (I got the feeling that the first level customer service was just trying to delay me so she didn't have to do the work). Turns out that there are 2 garbage collection companies I can choose and I hadn't chosen one yet since the contractor has their own way of dumping.

    So far, I'm about $32k out of pocket and most of the remaining expenses ought to come out of the renovation escrow (held by 212 Loans). I don't foresee other big expenses but I'll definitely write about them if they come up. I'm expecting things to move quickly now, based on how my NW contact described how this contractor works.

    Why Tampa

    I had previous purchased a turnkey rental in the Tampa metro so I was more comfortable with investing where I have at least some small connections. Out of the other cities/states I had properties, Florida would be the most desirable place to be, had I needed to visit any properties. NetWorth was the result of the location rather than choosing NetWorth first and then deciding the location. Also, you can't ignore how Florida's taxes are, especially if I decided to move there and work more closely with wholesalers, contractors, etc. 

    0Reply
  • Paul Schu
    Rental Property Investor · NC, IL · Member since 2018 · 86 posts · 47 votes
    7y

    @Ken Calvin thanks for the update. I also like Tampa but do not own anything there. It is a "small" big city if that makes sense. I agree no state income tax is nice. 

    I look forward to your next update.

    0Reply
  • Ken Calvin
    OP
    Rental Property Investor · Sacramento, CA · Member since 2017 · 36 posts · 22 votes
    7y

    Long story up ahead!

    My contractor has been working on my property and it came time to for an inspection with 212 Loans to make a draw for funds. The procedure is they have the contractor fill out 2 forms, they send an inspector to make sure the work is done (to some standard, I would guess), approve it, send me the money, and I send it to my contractor. Their default procedure is to wire transfer funds but since my bank, Wells Fargo, charges $15 to receive wires, I asked if they can send me a cheque image instead so I can mobile-deposit it. After they sent me the image, they mailed the cheque right away. When it came time to mobile deposit the $15k, the Wells Fargo app told me that there's a $10k limit for mobile deposits ($20k per 30 days), so I could not mobile-deposit it. I called Wells Fargo, talked to a couple different agents, and the conclusion was that it is impossible to raise the limit. The 212 people told me they wouldn't stop the payment, so I'm thinking I'd just have to wait for it to arrive and physically deposit it.

    Meanwhile, I decided to open an account at ETRADE Bank, where their mobile deposit limit is $99k and don't charge for incoming wires (I think). I thought it would be a quick and easy procedure, as it was with all my other ETRADE accounts, but it was anything but easy. First, business applications don't have online forms, so I had to fill out their PDF and fax it to them. After faxing and waiting 4 days, they replied to tell me what to change, so I did and faxed it in again. After 2 days and hearing nothing, I contacted them and they told me to upload it on my existing account and it'd get in the queue faster. I finally got assigned a particular person from the New Accounts department who would help me get things together so Operations department would open my account. She helped me get a couple more pieces of information that they wanted over the phone and I had to wait for it to get reviewed. Finally, just before midnight 2 days ago, I got an email saying that my account was opened, with an account number and all. I called ETRADE to get my online access set up. The agent told me I had to make a new login, so I did, but kept getting an error upon login, so the agent submitted the request to the Research & Resolutions department to fix and it was supposed to take 24 hours. I checked again 12 hours later and they found my request, but wouldn't touch it because I had to wait for the agent I talked to to follow up. Another 12 hours later, I called to see if I could get it fixed because it'd probably be when that agent works. They told me that they won't touch it either because the R&R dept was supposed to take care of it and they'd call me during their hours, which was business days during business hours (M-F 08-17 ET). 12 hours later, I called and asked to talked to R&R. The R&R agent, told me that I needed it linked, and within 2 minutes, he got my new account linked to my existing login. It was that simple and I didn't need a new login, after all.

    Meanwhile, 1 week after 212 Loans sent the $15k cheque, my contractor was bugging me about getting paid so I started bugging 212 to stop payment and just wire me the money, even though it'd cost me an incoming wire fee. They did, but I felt a little uneasy because I sent them wire instructions, asked them to call me to verify, couldn't reach anyone in the office even though they said they'd tell me when they've sent the funds, and only found out when I logged in to my account to find that their wire arrived to me. They could have been a victim of wire fraud, but not my problem, right?

    After receiving the funds from 212, I went to Wells Fargo to wire the funds to my contractor. It was after the day's cutoff, so I wanted to queue it to go out the next day. The banker told me that I'd have to come back to do it on Wednesday to request the wire, otherwise it would "drop off" the system due to staying open too long. I went the following Wednesday to request the wire out and the banker (different one) said it'd go out the same day because it was before the cutoff. I informed my contractor of the status and he kept checking it the whole day, the whole next day, and finally, middle of the day Friday, he received the funds. Who would have guessed Wells Fargo takes 2 additional business days to wire out after charging $30? I'm definitely going to be using my new ETRADE to transact, even though it was a headache to get the account opened. Also, the cheque that 212 mailed me finally arrived.

    So as you can see, nothing is easy and things took way longer than I think was necessary. The only advice is that if you're using Wells Fargo, don't expect your outgoing wire transfers to happen in a timely fashion. I'm just happy that I got my contractor paid, even though it was 2 weeks late. Here is the timeline of events so you can see how long it took:

    12/10 Inspection and draw documents filled out, signed, sent. I don't know when inspection happened.

    12/13 Got $15k cheque image from 212 Loans, couldn't mobile deposit. 212 mailed/postmarked the cheque same-day. Faxed application to ETRADE.

    12/17 Faxed updated application to ETRADE.

    12/19 Uploaded updated application to ETRADE.

    12/20 Contractor bugging me about getting paid, so I went to bug 212. Got assigned a real person for ETRADE application. Contractor said he's 70+% done.

    12/21 212 wired me the funds. Wells Fargo told me to come back on 12/26 to request wire out.

    12/26 Went to Wells Fargo, requested wire out, was told it goes out same day. ETRADE account officially opened near midnight, requested help to log in to account.

    12/28 WF wire finally went out, contractor confirmed receipt. New ETRADE account linked to existing online login. Cheque from 212 arrived.

    Also, I was calling/chatting/emailing someone every day (sometimes multiple times a day) to check status or get things moving forward.

    0Reply
  • Jason D.
    Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
    7y
    @Ken Calvin so other than the draw mishap, how is everything going as far as timelines and expected completion? I dont know that you ever mentioned what neighborhood this property was located?
    1Reply
  • Ken Calvin
    OP
    Rental Property Investor · Sacramento, CA · Member since 2017 · 36 posts · 22 votes
    7y

    Honestly, I was surprised it was already over 70% done a week ago, so it's going faster than I expected. I don't know if my contractor went on pause, waiting to get paid, but I wouldn't be upset at him if that were the case. I think it would be a couple more weeks, so timeline is good.

    The property is in Lellman Heights (Lealman?). I know it's a rougher neighborhood, but maybe you could elaborate on that?

    0Reply
  • Jason D.
    Rental Property Investor · St. Petersburg, FL · Member since 2017 · 3k+ posts · 4k+ votes
    7y
    @Ken Calvin that's great! Lealman and lealman heights are ok. Working class, near 34th st. which is a main corridor with a lot of businesses. I'd buy a property there.
    0Reply
  • Ken Calvin
    OP
    Rental Property Investor · Sacramento, CA · Member since 2017 · 36 posts · 22 votes
    7y

    Thanks for your input about it. Hoping for good things for you and me! 

    0Reply
  • Ken Calvin
    OP
    Rental Property Investor · Sacramento, CA · Member since 2017 · 36 posts · 22 votes
    7y

    Time sure flies during holiday seasons and everything slows down, except holding costs continue as usual. My contractor and I had the next draw and got Wells Fargo out of the picture. The draw went pretty smoothly from 212 to ETRADE Bank and from ETRADE Bank to my contractor's account. ETRADE wire fees were much better ($0 incoming, $25 outgoing) compared to Wells Fargo ($15 incoming, $30 outgoing) and went out same day instead of 2 days later.

    Last Friday, I talked to my contractor and there was an issue with the roof. He found out that there were 3 layers of old roof and bad decking. Apparently, the previous 3 times that it was re-roofed, they just put down the new layer without removing the previous layer. There were shingles, wood, and shingles on top of each other. My contractor’s roofer charged him $1600 for removal and passed that on to me. I asked my NW contact, who asked 212 to verify, if we can get it financed, but the answer was that it had to come out of pocket. Considering how many people end up over-budget doing rehabs, I guess this is actually pretty minor, only 3-4% over budget. Aside from that, he expected the roof to be done this past weekend and then painting the entire house would be done this week. That should complete the rehab and I’m going to be sending a home inspector to make sure everything is in good order.

    Over the course of the past several weeks, I talked to a realtor who I have been in contact with regarding multifamily investments and decided that I’d have her list my house. It turns out that she had met my NW contact recently. Would you call this a small world? NetWorth Realty fees would have been 1% to list the house and 1% when the sale closes, but I decided to pay 3% if she sells the house and 0% if I end up keeping the house in case of heavy bias toward buyer’s market. Ideally, we would have the house listed at the end of this week.

    Regarding the 212 loan where the January payment was due, I found out two things that I thought were different, but really glad it is this way. First, it's an interest-only loan, so I'm holding out as much money as possible right now. Second, they are only charging interest on the amount that was actually drawn. For example, I paid interest on $79k from Nov 16 to Dec 12, then interest on $94k from Dec 13 to Jan 17. I'm expecting interest on $109k from Jan 18 to the next draw. Also, 212 charged $175 for the first inspection/draw ($200 was deducted) and $375 was deducted from the second draw, so I'm going to be interrogating some people to see what's up with that.

    0Reply
  • Account Closed
    Flipper/Rehabber · Tampa, FL · Member since 2017 · 47 posts · 19 votes
    7y

    I bought 2 homes from NetWorth Realty, one in Brandon & Plant City and rehab budgets for both went thousands and thousands more on a medium sized block home. The contractor that used to do THEIR estimates and the one they recommend to my wife and I didn’t complete the job and the homes could not pass inspection. Both homes came out to be about 18-20% over their "estimate" with the licensed general contractor.

    Obviously they market to the novice investors with calculated ARV's and estimated rehabs built in. But because they require you to use 212 loans within the first 48 hours you typically have to move fast.

    This is not some fly by night wholesaler.  They have built a national reputation. Here's the thing-  Don’t trust their non-stop marketing emails. Your rehab budgets will almost certainly go over, sometimes by the thousands and sometimes by the TENS of thousands.  Feel free to PM for additional details. Be very very careful when dealing with this company.

    0Reply
  • Ken Calvin
    OP
    Rental Property Investor · Sacramento, CA · Member since 2017 · 36 posts · 22 votes
    7y

    Thanks for your input, Ryan. I'm really curious, how much did their analysis sheet say you'd profit and how much did you end up profiting (or losing)?

    0Reply
  • Account Closed
    Flipper/Rehabber · Tampa, FL · Member since 2017 · 47 posts · 19 votes
    7y

    @Ken Calvin Both properties said about 15,000 in profit and I went about seven grand above on rehab on both. 212 loans is a continuous disaster to deal with. Poor account servicing and not very customer focused.

    1Reply
  • Ken Calvin
    OP
    Rental Property Investor · Sacramento, CA · Member since 2017 · 36 posts · 22 votes
    7y

    @Account Closed I hope you were still able to turn a profit on your two deals. 212 hasn't been too bad to me, but I haven't had to deal too extensively with them. 

    Back to my story. You know how they say that every project goes over budget and over schedule? Looks like I couldn't escape that bug. I thought the project would have finished a month ago, and gave two weeks buffer, but the good news is that the renovations completed yesterday. Today, I had my home inspector go check it out. Turns out that my contractor forgot that appliances were part of the bid, so I told him to get those in. I knew that the windows were not in great shape, but my realtor thinks that the electrical is a big issue too. There were missing junction boxes, some really old wiring that we don't know if it's live or not but really ought to get replaced (knob and tube), no ground, unsecured splices, and no master switch at the panel. Realtor also thinks the fence at the alley should come down so there'd be parking spaces. I am waiting to find out what my contractor will charge for all of realtor's recommendations. Professional photography is happening next week and I'm excited to get it listed and sold.

    0Reply
  • Account Closed
    Flipper/Rehabber · Tampa, FL · Member since 2017 · 47 posts · 19 votes
    7y

    @Ken Calvin turned a little profit. Who was your GC? The GC that was recommended by NetWorth Realty also ‘conveniently’ forgot that appliances were included.

    0Reply
  • Ken Calvin
    OP
    Rental Property Investor · Sacramento, CA · Member since 2017 · 36 posts · 22 votes
    7y

    haha wow, okay, I'll PM you

    0Reply
  • Ken Calvin
    OP
    Rental Property Investor · Sacramento, CA · Member since 2017 · 36 posts · 22 votes
    7y

    Been a long while since updating, mainly because of trying to figure out how to file taxes. Lots of firsts here!

    Last time I updated, contractor forgot about the appliances. He was supposed to get them installed so we can get photographed and listed before Presidents Day weekend. Whatever happened, it was late and the photographer had to work around the mostly-installed appliances and construction materials/tools/boxes everywhere. In the end, the photographer did a great job while I was getting frustrated at my contractor. We got it listed after the opportune long weekend and the photographer went back another day to do Matterport photography. I got to see the actual layout of the house for the first time. The appliances are actually quite nice.

    We left it on the retail market for 3-4 weeks and it didn't seem to garner much interest, so I got it listed on the rental market and we found our tenant in 9 days. Agent said the rental market is super hot. Tenant moved in last week and we put it back on the sale market for investors. I talked to my realtor to get a feeling for if I should hold my breath on selling or if I should keep it, and we decided that I should refinance out of the hard money loan and keep it, so that is in progress right now. It will be FNMA conforming 30-year fixed-rate loan, so I have to deed it to myself and the lender is giving consent to deed it to LLC, so I'll probably set up a new "holding" LLC instead of deeding it back to the operating LLC.

    Meanwhile, I have been dealing with the knob and tube wiring issue. Dealing with electricians is the biggest pain in the butt. My contractor told his electrician to go and quote what it would take to make the house pass the 4-point inspection, but they must have miscommunicated and so the electrician did the job instead. However, I still don't know what he did besides add a master switch to the breaker box and cap off a junction box. I said I'd pay for what he did but he only sent a $700 invoice for "Inspection", which I said I'm not paying unless he tells me what he did. That invoice came just last week when he work was done 1.5 months ago. I still hadn't gotten a bid from him for replacing knob and tube wiring or any inspection report. I had contacted another electrician and they took over a month after contacting them to go and check it out. They confirmed that the knob and tube wires are live and that it would be pretty costly to replace. For comparison, another house of similar size they did was $14k. I wish I knew about this from the start, but I guess that's to know for next time.

    Since I have tenants now, the windows can't be the way they are. I got my contractor to bid ($5.7k) on replacing all the windows even though he was really slow to finish this project, but someone else's bid was for double the price. At this point, I decided to raise the listing price because I would probably end up losing money on the deal otherwise.

    So far, I'm thinking that we won't be able to find a buyer very soon who would pay the price I'm seeking, so I'm holding the property for rental. It will have positive cashflow and is not a bad investment.

    1Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free