All Forum Posts by: Jarrod Weaver

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It was great meeting you in person this week @Matthew Teifke. Hopefully the deals we discussed will materialize for both of us! With a bit of hard work these deals will happen.

The local property tax rates are also a buzz kill that will cause what should be a decent ROI to yield a less than adequate return.

There are so many brand new luxury apartment units that have recently or are currently be built that it is impacting SFR returns and ability to raise rents to accompany rising values.

The best (passive) ROI I have seen in the last few years has been partnering with class B apartment syndication offerings. As a partner you simply bring your money to the deal and let the syndicator do the heavy lifting. They normally follow a 5 year investment plan and have delivered returns well above the initial placement prospectus.

The best investors friendly agents are the ones who also invest. Sadly, this is likely less than 1% of the agents/brokers nationwide. Also invest your time and knowledge with your REA friend to help guide him to become an investor as well. It will strengthen your relationship and produce remarkable results for you both.

Don't sign an exclusive buyer's agency form and let each REA know that you are also working with other agents. This will develop into them either bringing their A game or falling to the wayside.

In the end, I suspect you will end up with just one REA and a terrific working relationship with that person.

Homes with cracked and/or repaired slabs in Texas are stigmatized. Meaning it won't be able to capture the full ARV of the comps without similar issues. It doesn't matter that the repairs come with a lifetime warranty. These homes are a specific target we look at for cash flow because they can be purchased at a DEEP discount. I'm not sure that your deal is discounted enough for the issue. Use it as a negotiating tool and get a better deal. Try to pull comps on just broken slab homes and see what the numbers say.

Like @Greg H. stated above - in this scenario you drop the "agency" or "representation" for both sides and work as in intermediary. At least that's how we do it in Texas. In Florida, where I'm also licensed, agents are "transaction" facilitators from the beginning and only provide "representation" when specifically asked and contracted to do so. 

I believe my Florida license still has reciprocity with Colorado so their laws are likely similar.

Talk to you broker.

Sale of Equitable Interests in Real Estate Clarified

Governor Abbott Has Signed SB 2212

SB 2212 amends Chapter 1101 to codify the clarifying changes to TREC rules regarding sale of certain equitable interests in real property.

Just like the rule, this statutory change clarifies that a person selling or offering to sell an option or assigning an interest in a contract to purchase real property must accurately disclose to potential buyers the nature of the interest offered. If a person offers a property for sale when the person does not own the property, that person is engaged in brokerage and must be licensed to do so. This is the current law.

If a person offers to sell an option or assign an interest in a contract on a property, the person must accurately describe the interest being offered. The same requirement for accuracy is added in the Property Code. The practice of “wholesaling” remains legal if these “truth in advertising” rules are adhered to.

This is one on the most maddening issues ever. The assessor's method of valuation doesn't follow logic. I fought my assessment when it spiked a couple of years ago and found that there are 2 suspect metrics in their algorithm that they can't explain. Other than that they exist. My comps were good, recent, solid sales that (should have) proved my argument. Instead, when they used my comps, which would have lowered the valuation ~$50K, the assessment went UP instead of down. The county's comps weren't even close to my type of house and some weren't even in the same neighborhood.

I spent half a day getting my numbers and preparing my argument. Then the better part of the next morning at the arb meeting. After the meeting I needed the rest of the day to get my blood pressure back into its normally above average range and to replace my rage with run of the mill anger. The lesson I learned is that fighting the county on your own is rarely worth it. My assessment didn't budge and my life is likely a couple years shorter now.

If you do fight the man, please use a firm like @Stephen Stokes mentioned above. Their service is well worth the expense, but be prepared to do so every year forevermore.

You've answered your own question. The markets you are looking in DON'T WORK financially, so you need to look into markets that you haven't yet considered. My first recommendation is that flipping is one of the most dangerous REI strategies you can attempt. If you buy the house discounted, live in it while you make the improvements and sell 366+ days later (since you will likely have an FHA mortgage), then it might work out. If you are going to attempt it otherwise, you better have a pile of money, honest construction crews in your pocket and the ability to get it turned in no more than 60 days. Otherwise, taxes and interest will eat your entire profit potential. From you post I realize this isn't where you are at right now.

My first deal was a live-in flip on a 986SF 2/2 condo that my wife and I purchased as a HUD repo. We paid $41,110 and sold it for $86,000 a year later. I'm sharing this to encourage you to look down market. There's a high potential for profit and less danger if you do. This isn't something you are going to find in ATX, so prepare yourself to look well outside the metro.

I like your enthusiasm @Brendon K. but don't consider REI to be a sprint. It's more like a Spartan Race. Agents have a tough time in this market because prices are so high. The MLS isn't the place to find investment deals right now - so don't blame that person, I'm sure he/she was doing their best. Buying at a discount is the key to making REI work. I recommend a daily look at the reo sites: homepath; freddiemac; hudhomestore; bankofamerica; wellsfargo; hudsonand marshall; and auction.com. There are plenty more, but this is a great place to start.