All Forum Posts by: Crystal Smith
Crystal Smith has started 65 posts and replied 2754 times.
Post: Getting Advice with buying Real Estate
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Grayson Grzybowski:
Thank you for taking the time to provide your insight on the questions I have asked.
For your introductory statement, I understand this is how debt should be used.
1) I have already went out of my way to ask for as high of a limit as I can just to have it on stand by.
2) I am trying to build value into our home to increase the equity faster so I can utilize it as leverage in time.
3) I have already reached out to a lot of different investors and have their terms & conditions at hand. Its trying to propose a deal even If i do not have the 20% down and can show them its a good deal. I feel that this only works for flips and I am not looking to flip homes.
4) Thanks! I will make sure to show this in a future proposal
You used a word that I'm going to highlight: "i do not have the 20% down and can show them its a good deal. I feel that this only works for flips and I am not looking to flip homes." That word feel is wrong. Remove it from your lexicon. You either know or you don't know. Here's the bottom line- I know that there are opportunities that do not involve fix and flip that you may be able to bring to an investor who will then decide to invest with you based on the numbers.
Example- A real deal that we are working on right now: A Homeowner wants to sell their house for $170K and is open to doing a subject to or contract for deed. Her current mortgage balance is $95K. She has a 5.25% loan, her PITI $1K per month, and she pays $25 per month for a homeowner's warranty that covers everything. Her tenant payment comes from a government entity and is $2100 per month. the house was also recently renovated so all the mechanicals are in good shape. If you controlled this deal you could present it to the right investor with the right proposal and split the $1000/month cashflow
Example 2- Just got a call from a tired landlord. I'm not excited by the location of the property but it's a 4 unit. Tons of violations and the fines are adding up. If our analysis shows that we can cash flow the property we'll make an offer to take it off his hands, spend $ to improve, and then cashflow it. Will we approach other investors to do the deal with us or do it on our own? Haven't decided yet but the opportunity is there.
My objective in the real live examples is to open up your mind about how to work with investors and it's not always about showing them a fix and flip deal.
Post: Getting Advice with buying Real Estate
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Grayson Grzybowski:
I have been learning about Real Estate for the last 2.5 years. I have come so far (daily personal Finance sheet, opened a small business, bough a home, and utilized as many tax strategies as best I can), yet I still feel so far from my freedom. I really need help for anyone who is willing to lend me some advice.
This is a multi question post!
1) How can I borrow more money then what I have already been proposed? Currently I had borrowed 12.5k to consolidate credit card debt and I can borrow up to 23k.
2) Would it be wise to roll this into my home mortgage so I can get the tax break for the interest and allow for more borrowing power from a credit union?
3) Lastly what would happen if I applied for a construction loan application that pertained to Real Estate?
4) Would It be easier to borrow that money knowing that I am trying to provide affordable housing in the governments eyes?
I have seen a lot of videos of people are saying "Utilize debt as the power to take these leaps," so this is where I am ready to go if the deals make sense.
Thanks for anyones help
Regarding utilizing debt- In my opinion the proper way to utilize debt is to purchase assets that throw off more cash than required by the debt. This seems like brilliant grasp of the obvious, but I mention it so I can answer your questions
1. Your credit cards should be used as a last resort. If you are acquiring an asset that will throw off more cash than required to pay your credit card and you have no other choices then use your credit card. If the asset you're acquiring won't pay the credit card debt then do not acquire the asset
2. I'm not sure what you mean by rolling "this" into my home mortgage. I assume you mean rolling your credit card debt into your mortgage to get a tax break. If you have a lot of equity in your home I would first evaluate if it's possible to leverage any of that equity to acquire another asset that would produce more cash using a home equity loan or line of credit
3. Regarding a construction loan- I recommend you start reaching out to lenders and start gatharing information on their requirements. Hard money lenders, traditional lenders, private money lenders... Go directly to the lenders and gathar information.
4. If you were coming to me for a loan an said it was for affordable housing I would ignore you. The only thing I care about as an investor in a business or someone who may lend you money is the bottom line. Will it be profitable???? And do I trust you know what you are doing/
Post: What has been your experience with out of state investing?
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Account Closed:
Hi everyone,
I live in California and have been meeting a lot of investors who prefer to invest out of state due to California being so expensive as well as the aggressive tenant protection laws we have here. I have heard both the good and the bad sides of investing out of state and so I am curious to know what other's experience has been? I have mostly heard about LTRs specifically in Indiana, Alabama, Texas, Michigan, and Ohio but I am open to hearing anyone's experience anywhere. Would really like to hear your thoughts!
Our experience with out-of-state investing is it works when you have boots on the ground to support you. It works even better if the boots on the ground are financially investing in the deal with you.
Post: What happens if a bank doesn’t accept my offer on Hubzu?
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Austin Lemma:
I was the highest bidder and only bidder on a property on Hubzu.
I have a feeling that they are going to ask us to meet a reserve price, but I don't know how much sense it will make to increase my offer. The property is a REO Occupied home that we could not inspect prior to bidding and only had one photo of a really bad exterior. Even google doesn't have a street view of the house, so I need to be conservative here.
Do I have any leverage in this situation? What can happen if I decide not to meet their reserve if they ask us to increase our offer?
If it's on an auction site you will receive a notice that reserve has not been met. No you do not have any leverage. If you dont meet the reserve then the bank has the option to wait and repost the deal at a later time.
Post: Newbie Here! | Tips, Tricks, & Advice Appreciated!
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Harrison Pruett:
Hey Everyone! I just started getting into this space and I've been trying to discover the best way to find sellers who are motivated. I'm currently using the propstream, redfin, and zillow trifecta as well as driving for dollars to find leads, then I cold call (Any recs for getting the right numbers?). I was wondering if any of you more seasoned individuals had any tips/tricks for a newer guy like myself. I just graduated college and I got my degree in Finance with a focus in real estate. I'm obsessed with all things real estate. I've been at it consistently for around 3 weeks but I still haven't had any luck wholesaling. I'm determined and don't want to give up. (I don't believe in the 9-5 rat race)
I have good contracts, a solid book of contacts for dispo, a decent understanding of the industry, I'm just really struggling with finding leads.
I'm excited to learn everything I can about the industry, I truly want to provide value to the sellers who need it, and also to investors who want it.
Any bit of information is really appreciated and well heard. Thanks guys!!
P.S. Should I get my RE license? I know its good to have and it will give me access to the MLS, but should I prioritize it right now?
My first recommendation is to check your state laws regarding wholesaling. Once you understand the law then you can decide whether or not to get a RE license. For example, since you are in St. Louis, in the State of Illinois, you can assign one contract a year without a license. So if you decide to do business in Southern Illinois and your strategy is to assign a contract, you can do one deal. If you get caught doing a second one without a license then the fine is $25K. If your strategy is to double close on all your deals then you can do as many as you want.
My other comment- You have been in the business for 3 weeks and you believe you have "a decent understanding of the industry". Not to be cruel, but I assume it took you 4 years to get a Finance degree. Why would you think you could understand the industry after only 3 weeks.
My advice
1. Get a RE license- Some of the same methods that top agents use to find listings, investors use to find off market properties
2. Invest in a system that will manage your leads and automatically manage your follow ups. This recommendation really has nothing to do with wholesaling. It's about having a system in place to find opportunities for fix and flip, buy and hold, listings..... and then the occasional deal that you may assign or double close on
Post: Just Staring Out
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Vivian Butler:
Hello,
I am working on getting started with wholesaling and do not mind working with another serious wholesaler of interest.
I connected with an agent on Biggerpockets who claimed to be investor-friendly and knew the wholesale strategies but I think I scared them away when I requested a written agreement to get started.
I do not understand why people in the wholesale industry like to talk about working together instead of working with a written agreement.
I have shared information with others in the past, trusting their verbal conversation, and ended up with nothing. They took the information and disappeared or claimed they did not use it.
What is your advice for establishing a trusting wholesale working relationship?
My advice for establishing a trusting wholesale relationship is to get properties under contract and controlled legally, after which you can start having a conversation about agreements. I'm not sure what such an agreement would look like. We have worked with many wholesalers over the years. We do not have any written agreements with any of them. We review their deals for our portfolio first and share the rest with clients on a case-by-case basis.
Since you are just getting started, I'd concentrate on working with sellers first and getting your own buyers list in place in place of agreements with other wholesalers. There's something called daisy chaining, where wholesalers sell other wholesaler deals and continually mark up the prices.
Post: Seller's Agent Doesn't Want to do anything until Inspection Contingency is Waived
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Tyler Condon:
Here's what I would do or instruct my attorney to do. You should have the contract modified laying out all that you want the seller to take care of due to the inspection. If the seller agrees to the contract modification, you can close the inspection contingency. Make sure the language added to the contract includes being able to reinspect to ensure that the work has been done and/or receiving a certification or receipt from a professional providing proof the work has been done.
Post: To sell rehabbed property or hold options
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Juan Alvarez:
I started my real estate investing journey earlier this year by buying an out of state property in Detroit Michigan with the goal to fix and flip as a turnkey. I did some major rehab (new roof, windows, etc) and also have a tenant in place now. I have analyzed the hold option prior to closing to make sure that if I decided to hold, this deal would cash flow. After listing as a turnkey for a few weeks, the traction has been minimal and have begun exploring DSCR loan options to refinance and hold as my hard money loan is maturing in a little over a month and I do not want to extend.
Would like opinions on things to consider that I may not be thinking about as a rookie on conventional or DSCR loan assuming it appraises for the calculated ARV during analysis vs finding other ways to flip now. Any guidance, thoughts, perspectives would be greatly appreciated. Thank you in advance!
My recommendation- Please don't wait until the last minute to move out of the Hard Money Loan. Whether DSCR or conventional get out of the hard money loan. Go with the product that allows you to pull out as much cash as possible.
Post: Found fix and flip property - need advice asap
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @Shayan Sameer:
I found a 3/3 fix-and-flip property in Miami. The house is in good condition, and the rehab cost will probably be around 40-50k. It has a pool and a nice backyard. The selling price is $700k, and the ARV is around $930k. Right now, it's an ABNB property.
My biggest concern is that some of the houses right across are multi-family duplexes. I don't know if that will bring the price down, and I would have a hard time selling. Thoughts?
My thoughts- Pull comparables for other properties that have sold across from multi-families in the area. See if the properties sold at a lower price than other similar properties not across from multifamilies. Don't just look at the price thought. Review the days on market information.
Post: Question about 1st time mailer campaign I'm planning
- Real Estate Broker
- Chicago, IL
- Posts 2,815
- Votes 1,750
Quote from @John S.:
Hello everyone!
I'm an investor based out of Long Island, NY. I've currently got 2 multifamily properties here with 5 total units -- I live in 1 of them.
It's been extremely difficult to find multifamily properties that meet the criteria that I'm looking for through the MLS, and when I do, they're extremely overpriced. The last house I bought, was brought to me off-market by my agent, and it's seeming that off-market is the only way to get good properties without the MLS prices.
I've recently got a nice business card printed up, and would like to start a direct mailer campaign, using BatchLeads to find multifamily properties in the local towns that I wish to invest in.
I have a pretty strict criteria about what I'm looking to purchase at this time:
-Legal 2-or-more unit large Multifamily (not required to be owner occupied)
-Each unit should be at least 3 bedrooms (so if it's a duplex, it needs to be 6+ bedrooms)
-Sewer (not septic)
-Gas (not oil)
A lot of this information is not readily available online, so once I start my mailers, I'm sure I'm going to find people who eventually respond, but that don't have criteria which match what I'm looking for.
I feel like it would be a waste if I paid a bunch of money for direct mailers, and then someone reaches out to me to sell, but their house doesn't match the criteria of what I'm looking for -- I don't know anything about wholesaling.
What can I do to monetize these leads, or is the answer is that I need to learn
So we believe no lead is a bad lead. I'm going to assume that you are part of an investor community on Long Island. If not then become part of a community. If someone responds to one of your mailers but their property does not fit your criteria, then leverage your community to see if it's a good fit for another investor. If it's a good fit for another investor then there are multiple ways to monetize.