All Forum Posts by: Robert Williams

My wife and I have been trying to set up a comprehensive mail marketing campaign for new deals. We thought it might be helpful to employ yellowletters.com since so many of you had great reviews about them. However, we have had a lot of challenges getting a response from them. What we are hoping to do is find a company that can handle our direct mail needs (sending out 1800 pieces a month for at least six months). We thought a combination of yellow letters and postcards would suffice. Customer service and responsiveness is important to us (and unfortunately we did not get that with yellowletters.com). Can you recommend other companies that you have used for direct mail services outlined?

Hey Bobby,

I think all of the metrics you mentioned are useful, especially if you're contemplating a buy and hold strategy. If I'm looking strictly at a flip investment in a neighborhood, I typically go back and check the sales records for the past six months. If you go back any further, you're looking at potentially out-of-date data. If it's a neighborhood with a ton of sales, then I'll shorten how far back I'm looking.

The most important metrics I look for are 1) what's the typical sales price of as-is properties, 2) what's the typical sales price of renovated properties, and 3) how long did it take to sell the renovated properties (days on market), and 4) did the seller end up having to drop their price or offer buyer incentives to get to closing.

If all these factors are conducive to making a decent profit on a flip (a net of at least $50,000 is what I look for after all realtor fees, closing costs, carrying costs, and renovation expenses are paid off) within a reasonable period of time (I look to be in and out of a project within 3-6 months) then the numbers work for me.

A quick search of Ivy City sales turns up only 2 sales during the last 12 months. One was a rundown rowhouse that sold for $135,000 and the other was a renovated rowhouse that sold for $475,000. Now those are great numbers, but there's not enough inventory turnover to make me feel comfortable about working there.

I've never looked at Ivy City, but it is the next logical step after Trinidad geographically. What I don't like about it is that it feels physically isolated (being tucked in between Mount Olivet Road and New York Avenue) and has less access to public transportation (no metro or trolley). Trinidad has the cachet of being close to the dynamic H Street corridor. Ivy City does not.

Personally, I'm focusing more on areas across the Anacostia that are close to metro, especially around the Deanwood and Minnesota Avenue metro stops.

If you're looking for a good real estate agent, just message me and I'll put you in touch with a good one. I'd also be happy to share my list of responsive lenders and to give you my property manager's info.

-Rob

I've never done a flip in Ivy City, but the metrics for analyzing a good deal are universal in my mind. What's the ARV for a property there? I've never looked at Ivy City sales, but your challenge may be finding enough recent sales to determine what the typical ARV is in the neighborhood. If you can buy a property cheaply enough to make money on a flip based on the ARV, then it's worth pursuing.

DC allows MLS access for the following unlicensed categories: real estate assistants, office secretaries, administrative personnel. If your real estate agent can make a case that you work for him in one of the above capacities, then he can sign you up for MRIS. The MRIS subscription fee is $295 plus $165/quarter.

Hey Matt,

The first thing that I'd say is that the tool you're using is not the MLS, it's a company that buys data from the MLS and then displays it for consumers.

If your choice is between Redfin and the local MLS (which is called MRIS in the DC area), then the MLS will have a slight advantage just based on the sheer amount of data that's available for any given property. If your choice is between a service that buys it's data from the MLS (which includes both Redfin and Listingbook) then I'd say use whichever one you like better. Redfin buys its data directly from the MLS and the information is pretty darn accurate (unlike Zillow and Trulia whose data is hopefully out of date and unreliable).

I'm not aware of any tool that gives you direct MRIS access (but I also haven't been looking for one).

Run, don't walk from this deal! Such a high delinquency rate suggests a condo building thats in serious trouble. I bet the building reserves are also seriously underfunded and that the building's overall finances are in shambles. Though Columbia Heights is a great area, the property values of the units in this building are only going to decline because no one can sell to a "regular" buyer.

It sounds like you're already looking at the right things for your first investment. Buy a condo that's within walking distance to the metro where, if you had to rent it out, you would cashflow. There's lots of places in Columbia Heights, Petworth, Eckington, and Brookland that meet this criteria.

I couldn't follow all of the twists and turns of the relationships in your story so I won't comment on whether or not you should go directly to the seller. However, I will answer some of your questions from the perspective of a real estate agent.

When I'm representing a seller, I will always do full due diligence to qualify every buyer. That means if you're getting financing that I want to see your pre-approval letter and if you're a cash buyer I want to see proof of funds. If an offer is not accompanied by either one of those, I will automatically send it back to the buyer's agent and tell him or her to get those from his client.

If a buyer refuses or is unable to provide either a pre-approval letter or proof of funds, that's a huge red flag to me. That tells me you don't have your financing arranged yet and that there's a risk you can't follow through on the deal. I'll still present the offer to my seller, but with huge caveats and a recommendation to reject the offer. Its detrimental to a seller to have a property tied up in a contract if you don't have reasonable assurance that the buyer can actually purchase the property. Now if you're an investor or developer with a proven track record and solid reputation, then I might change my recommendation.

As an investor, every offer I make is all cash and is always accompanied by proof of funds if I'm dealing with a seller who is represented by a realtor.

If you're buying something off market and working directly with the seller, then all bets are off. At that point you just need to provide the seller whatever he or she needs to sign on the dotted line.

Run away from this one unless the seller's are willing to give you a substantial discount over their current asking price! The fact that it hasn't sold for what they're asking says it all. It does NOT matter what someone paid for a property years ago. The only thing that matters is what is it worth today "as-is", what is the ARV, and can you buy it at a big enough discount to make some money?

First, make sure your familiar with your local jurisdictions laws regarding rent increases. Many jurisdictions allow them as long as proper notice is given. Just don't expect it to go over very well with the long time tenant.

I don't see you being able to take a deduction for anything out of the security deposit that was damaged prior to you buying the property unless you have record of the move-in condition. If you do a home inspection and something is damaged by him afterwards, then you have cause.

Speaking of the security deposit, make sure that 1) you collect it from the current owner at closing, and 2) make sure you have something in writing from the owner that the amount he's given you is the full deposit.

The best investment strategies in DC are buying property flips and rental units within a mile of a metro (subway) stop. Rental demand in DC has remained strong, even during the economic downturn and rents are high enough that finding a cashflow property is not exceedingly difficult.

I've heard the "condos are overbuilt" argument as long as I've lived here (over 10 years). New condo sales definitely took a huge hit during the recession, but condo sales have been going strong for the past two and half years. Unless we have another recession, I don't see condo developers being forced to convert their upcoming units to rentals.

I own several rental units in DC and I've never had to lower rents (even during the recession) and I've never had a hard time finding tenants. DC continues to attract strong supply of college students, graduate students, young professionals, military personnel, government workers and international investors, all of whom are looking for housing (to either rent or buy).