All Forum Posts by: Sherry McQuage

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $220,000
Cash invested: $220,000

Bought this "shell" of a house; seller had passed away unexpectedly during the renovation. Heirs let it sit for a few years. Had gone under contract a time or two...I think most people just weren't equipped to finish a property like this. Inside is taken down to the studs; some code violations as it sits. Working on getting a new septic permit so we can add onto it, and increase the bedroom count to 4. Will use as a family vacation house, and rent it out STR or MTR. Sits on a deep water ditch/canal.

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

Our investment partner is a family member, and he has a boat. We all wanted a "beach house", and when we found this property it's on a deep water ditch/canal.

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

Found on Realtor.com.

How did you finance this deal?

Cash, we split it 50/50 with family member.

How did you add value to the deal?

We will expand the septic, add 3 bedrooms and 2-3 bathrooms.

What was the outcome?

Just bought it....

Lessons learned? Challenges?

Working/hiring workers from 3+ hours away can be challenging.

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

Yes, I am a licensed agent in NC.

Hmmm...the land was vacant (except has lots of illegally dumped trash on it). We wanted to buy it and build a duplex or SFH to rent out. Do you remember the name of the BP member that has experience in this?

Would love to chat with him/her.  Thank you!

Hello,

I had a similar situation in NC...My husband and I (investors) tried to buy a piece of land from the gentleman who had been paying the taxes for years.  All 3 of the "owners of record" on the tax records were deceased.

The seller was the son of one of the deceased.  His attorney said in order to provide a clear title, the seller would have to hire a law firm that was willing/able to do extensive research into heirs, and get them to sign off/away any rights they might have.  

No local attorneys wanted to do such a time consuming, possibly long search, so we were not able to purchase the land.  Seller is just continuing to pay the taxes, even though he "doesn't own" the land...until/unless he hires an attorney to do the title search, he won't ever be able to sell it or develop the land.  Bummer.

Start learning, buying real estate in my 20's.  I got my real estate license in my late 20's, kept updated on continuing education, but only activated the license after all my kids started school.  If I/we had started buying investment properties (even 1 a decade) it would greatly have improved our financial wellbeing.

Learn from my regret.😁

Hello Jaden,

What is you background?  What type of financing are you planning to use?  Keep reading and learning here on Bigger Pockets and the sky is the limit for you.  

If you are interested in the Pinehurst, Sanford, Fayetteville, or nearby areas, give me a call.

Warm Regards,

Sherry

 I agree that licensed agents will rat you out, as they should (my opinion)...licensed agents have dedicated lots of money, time, and training to hold the real estate license.  It takes years for most agents to "start making money".  We take ethics classes, and continuing education classes, and constant training to stay up to date with rule changes.  We/I am a professional, and our fiduciary responsibility is to our clients.  We pay a percentage to our brokerages, have marketing and education expenses, and are self employed so we pay for our health insurance, gas, etc.  

In my local MLS (Mid Carolina Region MLS), wholesaling has left a bad taste in buyer/sellers minds, so the MLS is creating rules to basically prevent wholesaling. There's been too many instances of someone not understanding (or understanding and then getting mad) that wholesalers are selling the contract to buy and making money off "someone else's property".

Please either go get your real estate license so you can market it legally, or go ahead and close on buying the property.  

I don't know you, and you don't know me....too many people have gotten burnt/taken advantage of during a wholesale deal. I'm glad MLS's (and Z) are cracking down on "grey transactions" that come across as possibly predatory deals. Advertise the property on Craigslist or other sites if you must. Most buyers and sellers are vulnerable because they don't buy/sell real estate frequently; licensed agents (me) take pride in "guiding and protecting" clients from transactions that can go wrong.

Regardless, you are putting yourself at risk of getting sued by trying to market a property without a real estate license, a valid listing agreement, or being the owner of record.  Here's where one might ask, why are you doing it this way?  Your answer might be enlightening.

PS---you mentioned that your mentor has been doing creative deals for 30 years....It is possible that the rules have changed and he/she has not.  Just because one "gets away with" something, doesn't necessarily mean it's ok.

I recently worked with 2 different investors who each bought an investment property using a hard money lender.  I know the interest rates were a bit higher than a conventional loan, but it allowed them to buy a "fixer upper"....they plan to update the property as soon as possible.  One investor plans to flip it (sell it as soon as it's fixed up), the other investor plans to rent it out.  I anticipate the second investor will refinance the property once it's fixed up and rentable.  

From what I can tell, it lets investors buy a property that probably wouldn't qualify for a conventional loan (these properties were...not livable).  These investors have a project or 2 under their belts, and Hard Money let them leverage what money they did have, and expand their portfolios.

A local lender came to my market center in the last year and talked about this....is there a box you can check when filling out an application that can let you "opt out" of the credit bureaus selling your information?

@Nicholas L.

I agree with Nicholas….whether a real estate agent says its a good time to buy or not, you (the investor) need to do your due diligence. Check to see how many STR properties are in the area you are looking in, find out (or look at their calendars) to see about how often they are booked and at what rate…run the numbers!

An agent can provide information and guidance…an investor is still in charge of making the decision to buy or not.

If you abdicate your responsibility to do your due diligence, then you lose the right to complain. It’s your money, it’s your responsibility to check as best you can to see if a property will likely perform as you hoped. There is no “easy button”, that’s why we all learn from every transaction.

There are thousands of commercials that claim to make you “lose weight by taking this supplement “ or “you”ll make thousands of dollars a week after buying my course “…please don’t be so quick to believe everything someone says, fact check!!!

Best to you…

 Hello Faris,

Any book published by Bigger Pockets is a great start.  Also, listen to podcasts and when a guest mentions a book that inspired them, go buy it (I buy on Audible so I can listen while I walk my dog or drive).  Won't be long and you'll have an awesome library to learn from.