All Forum Posts by: Jennifer Hoover

Thanks all!

After ten years as a Realtor and helping lots of investors with all sorts of different styles, goals, and levels of expertise, I can hands down say that I am looking for two things:

First, someone who is actually able to purchase/invest (pre-qualified, cash in hand, or funds lined up) OR who is genuinely interested in learning/working with their agent on how to get there.

Secondly, they are willing to listen to and partner meaningfully with their agent. This ties in particularly to what you said about investing out of state, and was mentioned by another commenter too!

For example, I had a client from New Jersey who aggressively wanted to over-bid on a property. He wanted to offer almost full price. He could not believe that the taxes were "only" $4,300 on a large property. In New Jersey, 4k was a bargain; here, it was restrictive. Local investors passed it over repeatedly for the taxes being too high for the area. I basically had to argue with him for an hour to convince him to offer 10k less. He finally agreed, and the owner accepted within hours with no counter. He saved $10,000 (and could have maybe saved even more) by listening to his agent.

I had another couple who insisted they wanted to write a letter to the seller of a vacation/cabin/getaway property to try and sway them to accepting their offer. I advised them not to. I had met the sellers and knew this would not only be unlikely to help, but would likely harm their chances - I live here, I buy and sell her, and I know this market and the people. North country folks can be odd ducks (I know this, they are my neighbors and friends!). I knew this letter, though well-intentioned, would likely not go over well. In the end, they insisted on sending the letter with their offer. The letter from "the city folks" about all the improvements they planned to do to turn the camp into an Airbnb did not go over well with the sellers. The couple did not get the camp. In fact, it sold later, for a couple thousand less, to someone else... Who now rents it on Airbnb.

I think, particularly when you are investing from out of state, it's imperative that you get a good agent, and then listen to their expertise in their market.

So, dream investor client? Someone who is ready to buy, or willing to learn how to get there, and someone who will listen to their agent's expertise about the market they are proficient in.

Investment Info:

Small multi-family (2-4 units) buy & hold investment.

Purchase price: $34,000
Cash invested: $9,800

Last purchase of 2020! Two family duplex with an awesome location... the only house on a tiny city-maintained street on half an acre. This one will be a full cosmetic rehab, no heavy structural changes or repairs except updating the electric. Projected rents at $850 and rehab budget at $21,700. This one is just SO cool - It's built into the hill, the foundation is literally bedrock! The area is known for its hills, dolomite bedrock shelfs, and for being home of the Herkimer Diamond!

What made you interested in investing in this type of deal?

This was in our targeted community for improvement and investment, the location was great, and the numbers made sense.

How did you find this deal and how did you negotiate it?

This deal was on the MLS. We negotiated with the seller's agent who worked at length with his clients until we arrived at an agreement that worked for everyone.

How did you finance this deal?

We financed this deal on a regular conventional style mortgage. Yes, a mortgage for a $34,000 purchase. Deals aren't just for buildings- you have to go look for lending deals too and if you aren't finding them, well... it's not because they aren't there.

How did you add value to the deal?

We haven't added much yet. Plans for extended outdoor and green space will likely allow us a higher rent and lower turnover for the property... it's pretty rare to find a rental in the area with very private and wooded outdoor space. We plan to maximize the decks and balconies, as well as enhance the carved stone balconies. YES... Carved stone balconies! The outdoor space really sold us on this one - it is untapped value.

What was the outcome?

Will update when we get it up and running!

Lessons learned? Challenges?

One challenge was that we were working A) with a small lender and a loan officer with limited skill, and B) during a pandemic. Things went slowly because of the current high demand for loans, and due to scheduling and staffing issues during a pandemic in every area from attorney offices, to the title company, to the lender. This reminded us AGAIN to really account for timelines and scheduling that we cannot control. It's a lesson learned on other deals, that we were prepared for this time.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

We worked with Community Bank on the lending. The lack of quality in service is offset by the usefulness of their loan product line.

I've started another project since then using a local M&T branch and they were immediately very helpful and offered credit products that were a great fit. If all goes well, we plan to do more with them.

Most lenders don't actually have a loan minimum per se; they have a cost (usually around 50k) where the standard fees they need to make are too high a percentage of the loan amount. Basically they are trying to avoid getting flagged by NYS for giving a "high-cost loan". It's more about avoiding the red-tape around consumer protections than actually having a minimum. That probably sounds complicated, but essentially lenders can only charge up to a certain percentage of the loan cost without getting on the radar - ie, $1500 in closing costs for a 100k loan is only 1.5%. But $1500 in fees for a 28k loan is a much higher percentage and sets off red flags/exceptions. I hope that makes sense.

That being said, I closed on a loan for 34k on Wednesday. I have another closing in a couple weeks for 20k. Both through local lenders. There ARE lenders who do these, especially if they are portfolio held loans which are generally offered by smaller and local banks. Its a good time to shop for these loans. I can shoot you the numbers for a couple lenders depending on your area if you'd like.

Hard money has its' place, I definitely use it (short term and on very fast & solid deals). Just do your research first if you go that route.

Ryan is so right, and this is a good one! Screen, screen, and screen again. Call their mommas. Drive by their current address. Verify the references! Two hours of due diligence now saves a lot of headaches later.

Hi Anthony! What a smart question! Those who "know what they don't know" are the ones I see succeeding because they aren't afraid to ask for advice, aren't reinventing the wheel, and are doing Big Thinking before making Big Moves. Love it. 

One of the issues I often see newer investors struggle with (and an issue I had myself) is pacing. By pacing, I mean I see lots of new investors get very excited and motivated, jump in full-on and either fail, flounder, or set themselves back as they dig out of a situation they've gotten into too hastily. On the other side of the pacing issue, I see many more who over-analyze and/or stagnate at the planning stage, losing time, momentum, and progress by "analysis paralysis". Ten years ago, I was the former; and I very often work with and coach the latter. It sounds like you might lean toward the "dive-in" type of personality (me too!).

The other issue is lack of support, mentorship, and immersion. It's kind of like going to a foreign country. If you go alone, maybe you have a nice trip. But maybe you struggle to understand the language, or get taken advantage of with unfamiliar currency in the shops and marketplace, or you get lost and wander down an alley that isn't very safe. But if you visited a new country with, say, a bunch of friends who are locals, they probably speak the language, know the vendors, can show you all the hot spots to have fun, the dangerous alleys to avoid, and soon you know all of that too. Real estate can be like that - you learn faster and it's way more fun if you aren't going it alone!

I've found that some good ways to avoid both the pacing pitfalls and the setbacks of going it solo are the following:

 1. Seek out the guidance, advice, and lessons already learned by those in the field (like you already are!)

 2. Set goals with timelines and revisit them regularly - if you are getting ahead of yourself you'll see it, and if you're not hitting milestones you had planned you'll see that too. Without good (written, defined, measurable) goals as a map, it's easy to lose track of where you should be or planned to be.

3. Find a "team" early - start looking now for an agent who invests in real estate themselves, deals a lot with investment & income property, or both. I'm one, and there are many of us in this area. Don't be afraid to call and chat with several agents and ask how they can help you. Same with lenders (your agent can also guide you on this). Find out what loan products, if any, you plan to use - this may dictate what type of property you will target (ie, FHA loans means no distressed properties or conventional means x amount down) Find out if you have any credit issues now, not later, and what you can (and should) spend. Insurance agents, contractors, etc all take time to find, so those are steps you can take now that are low-risk but valuable. It also keeps you "on pace" because you are forming foundations that make taking next steps easier.

4. Get around people who are actively doing what you want to do. Surrounding yourself with people who are already doing flips, rentals, investment, etc is not only super motivating, but you'll glean SO much from watching, emulating, and networking with them. They will help encourage and motivate you to not get "stuck" in analysis, and will likely also have helpful advice if they see you are jumping in over your head! Often times these folks will also be invaluable sources for leads, or just super helpful when you want another eye on a potential deal or a problem you encounter (hint: most will already have had the same problem!) I have done this for 12 years and I still routinely get "other eyes" on my deals or just talk shop with investor friends to stay motivated.

Good luck, you are already being so smart by reaching out on Bigger Pockets - there is such a vast and wonderful knowledge base here!

This is a smidge reductive. Good contractors DO go to box stores, especially in CNY, Upstate, and the Adirondacks, where options and supply chains are less than metro areas. The OP is asking about CNY and Upstate. It looks like you're maybe commenting from a very different market in New Hampshire. Places like Lowe's have their Pro Desk, and it's busy every day that I go there with my fellow local contractors. I do agree hanging out at a box store looking for referrals early in the morning as was suggested is a really poor way to get a contractor. However, my Pro Desk liason at Lowe's has referred me to subcontractors many times, and has an extensive network of them (and knows who does a good job, skimps, etc). Obviously I prefer to support local over Lowe's or HDepot. But don't count out the box stores as a resource or think that "good contractors do not go to them". We do, and the Pro Desk folks usually know all of us by name. 

There is a pretty significant issue upstate and CNY with contracting right now. My customers, clients, and even myself personally have had a harder time than normal with getting work completed or even bid on. I don't know about a year out, but definitely there seems to a backlog.

I will ask and see, I know at least one of the guys goes out there quite a bit.