All Forum Posts by: Annette Hibbler

My husband and I have been investing in real estate since 2011. I'm a full-time agent and worked my way up the ranks to now head up the STR department of my broker's property management division. You name it, we've done it:

- Fix n' Flips

- Long-term rentals

- Short-term rentals

- Mid-term rentals and 

- Arbitrage (not recommended for novices).

I thought I'd share some lessons from the school of hard knocks. It's not an all-encompassing list just some things that come to mind. My hope is that taking some of them on board as you venture into real estate investing, will save you a lot of hassle and headache down the road.

1. Never negotiate from a losing position. Don't every pay more than the property is worth.

2. Emotions have NO PLACE in your purchasing decisions. It's not your residence, you're not living there, it's just business. Don't let emotions cloud your judgement.

3. Don't get fixated on one property. Always be ready and willing to walk away. There's always another property and deal down the road. More often than not, the next property you come across is better than the last.

4. Start small, and learn new skills each time. The more you can learn to do yourself today, the more money you will save tomorrow. Youtube is a fantastic resource.

5. Always have the right tools on hand to do the job. Time is money. 

6. When furnishing a short-term rental (STR), know what type of guests you are aiming for. The furnishings should match your guests' expectations.

7. Aim for a higher end look and feel. Choose neutral colors and design a feature wall in the living area. Your goal is to provide comfort and space they won't find in a hotel. After a while, you'll get really good at finding deals on furnishings. 

8. Townhouses and condos make great STRs. Be sure there are no HOA restrictions and check local permits.

9. Properties within 10 miles of a hospital or university are good mid-term rentals (30+ days). There are loads of traveling nurses across the nation. Check out Furnish Finders.

10. Before purchasing, take note of other properties in surrounding neighborhoods because your flip will be competing with them. Ask your agent to send you a few recently sold homes that sold in less than 30 days. Take note of the interior photos, features, finishes, etc. 

11. Choose professional photos using wide-angle lenses and lots of light.

11. Do your research! Find out how much you can sell for, rent for? Long-term, or short-term income? 

12. Use a profit calculator to keep track of your expenses and stay on track with your budget. Message me for recommendations.

Our first flip was a HUD house back in 2011. Major damage to second floor do to fire. Whole house needed remodel. 3BD/2BA 1200 sf house in a C+ neighborhood. We used contractors for the major stuff, then a "handyman" for cosmetic repairs we didn't know how to handle ourselves. Never trust a contractor you don't already have a long history with. Lessons we learned:

1. Always get 3 quotes. Choose the middle one. Make sure deadlines and expectations are in writing! Get an itemized list at all times. None negotiable!

2. Always show up at unexpected times to check work and progress. I caught one handyman in a boldface lie. I went to the property in the AM and no one was there. I suspected the guy was charging us but not showing up since I couldn't see any progress for several days prior. When I arrived, no sign of him. So I called him and asked how the work was going. He said he was at the property working hard and making good progress. I again asked him, "oh, you're at the property now?" He totally lied to me over the phone. I waited for him at the house and the moment he showed up, I stayed there and made sure he put in a full days work then fired him at the end of the day. 

3. Always at 10-15% in your budget for extras.

4. Learn to roll with the punches. There's always going to be something you didn't expect come up. It's just the nature of the game.

5. Stage the first level of the house and the front exterior. First impressions really do count! Homebuyers emotions are a huge factor in selling a house. I took some furnishings from my own house and bought a few more items at discount stores. I used these furnishings again, and again for staging other flips. Visit sites like Houzz.com and sold properties on Zillow for inspiration.

6. Pay attention to the details! Homebuyers ALWAYS notice the details. 

7. Pay a professional painter for main living areas. Use one neutral color for the whole house. Typically, we use Benjamin Moore colors "Modern Gray" with a contrasting warm white color for ceilings. Modern Gray looks really nice against medium or dark wood trim, cabinetry and flooring. Avoid paint colors such as blues, purples, reds, yellows in kitchen and living areas. Never settle for plain white walls throughout the house. That screams "amateur" like nothing else.

8. Always remind yourself, it's not your house! You're not living in it so your personal tastes don't come into play here. 

9. Take note at what is selling in the neighborhood. Look at homes that sold in the last 6-12 months. What do the interiors look like? Take note of the layout (open plan?), wall colors, etc. Look at the finishes, lights, faucets, etc.

10. Design the house to be in keeping with the neighborhood. Paying for luxury finishes in a blue collar neighborhood is a recipe for disaster and you'll loose your shirt in the process. Keep the homebuyer's budget and expectations in mind at all times.

We chose much of our cabinetry for kitchen and baths from IKEA. They have many beautiful cabinet finishes and their showrooms can give you some great ideas to conserve space. The cabinets are well made and look high end without the high end prices. 

I live and work in that area. We are a core of investors running a property management company through Coldwell Banker Town & Country. We invest mainly in residential and commercial properties, but not mobile parks. There are some mobile parks in White Lake along 59, across from the Walmart. I personally, do not have any experience with mobile homes.

I don't see why not but you should check with an accountant. My thoughts are:

- If it's in an LLC you probably can't claim it as a homestead.

- When you come to sell it there might be tax implications.

- If there's a mortgage, you may have to pass it by them because the deed name has to be transferred from you to the LLC. Some mortgage companies may be alright with that and others not so much.

Deals are everywhere. If not in your immediate area, look further afield. The biggest obstacle I often see with new investors is overcoming their own doubts and fears. Fear of losing money or failure is what prevents many from even starting what could be the greatest opportunity of their lifetime. Fear appears when you are about to embark on something great. According to a Forbes article, " a survey conducted by Wakefield Research, found that one-third of Americans are more afraid to start their own business than to jump out of a plane!" 

Yep, we do the same. Rip out the carpets and vynl flooring, then install waterproof vinyl planks wherever possible. Looks so much better and no hassles.

Get an iron clad lease that will protect your interests. I can send you one we've used for Detroit tenants if you'd like. 

Sound advice from @Samuel Buttram. MF may be the way to go. As far as lenders are concerned, I'd avoid the big banks and focus on credit unions or other small/mid size local bank. They tend to have more flexibility and willingness to work with investors.

Why would you buy from a losing position? The market is currently falling, so chances are likely that you'll be in a greater negative position in 6 months time. It's unwise to pay more for a property than it's worth.

Don't get fixated on one property. THERE IS ALWAYS ANOTHER DEAL. Instead, play hardball and counter at $235K and stick to your guns. Always start from a position of strength. At $250K you are still $15K loss in equity. Maybe there are others ways you can sweeten the deal? Quick close? Give seller more time to move out?  

Seller countered at $250K less the $8K in concessions? If so, he's willing to take $242K for the property.

Another tactic you can try:

1. If you counter at $243K, with seller's agreed $8K concession, you back down to $235K, or

2. Counter at $235K with no concessions (saving the seller $8K).

Be ready and willing to walk away. The seller will be unable to sell in this market so there are only two options for them. 

1. Seller will pull property off market entirely.

2. Seller will be forced to sell for less.

Seasoned investors always guard against "falling in love" with a property. This is business, so take emotion out of the equation. You are not living in the property, it's purely an investment. 

Remember that even STR and MTRs are vulnerable to the market. During the crazy COVID crisis and lockdowns, STRs and MTRs suffered. Also, keep in mind that people are losing jobs left and right which is having an effect on STRs.

Sounds like a problem tenant who thinks he/she can play games with you. DO NOT ACCEPT A DIME. Show up in court with all your documentation and rental history. Ask the judge to compel tenant to pay up what is owned but still evict the tenant. Be prepared for tenant to complain that the property has big issues, needs a lot of repairs and paint you as a slum lord. Show up with photos of the property (inside/out) and a copy of any text or email correspondence with tenant over the last 6 months. Hope this helps.