All Forum Posts by: Crystal Smith

Hi all,

There is a distressed property I have had my eye on for several years that is in extremely close proximity to a property from my childhood, and an area I would like to own in. I have written a personal letter to the owner once every six months over the last several years, asking if he wants to sell. I include a photo of my family and explain my desire to own in this area I have fond memories of. Sometimes I include a personal check and a P&S agreement with no contingencies. I have never gotten a response.

This gentleman lives out of state and is 96 years old.  He has not been to this property in several years.  I am told from the person who mows the lawn that he does not have a phone, and she only hears from him once a year or so, when he mails her a check for her services.  She says she knows of a cousin who happens to live in the same state as the property, but apparently he had a falling out with him and they have not spoken for many years.  

I'm not sure if there are any other next of kin; he has no children or spouse.  I wonder aloud if he is incpacitated or in assisted living at this point, or has someone that is taking care of his financial affairs for him. I'm looking for advice from the folks that find these kinds of deals all the time, and how best to proceed.  My worry is that the property might fall into probate or tax auction once he passes and someone who knows someone will get the deal under contract before it reaches public offering.

There is a real estate agent in the area that gets about 85% of all the listings in the micro-market, so she is farming these properties constantly.  She buys them distressed, renovates them, and then sells them herself for top dollar.  I am sure she is sending him letters (or using other methods to contact him) as well.

I'm a small long-term buy-and-hold investor myself, but this property is about 4 hours away from my own market, and would be used personally by my wife and I if we were to acquire it.

I'd really like some help from you large operators who work these deals all the time, as to how best make contact with the owner and see if he were interested in selling.  I'm reasonably certain this owner does not need the money, so that's probably not a motivating factor.

Please help David beat Goliath to the punch.  I'm anxious for some feedback and advice on how to get the best opportunity to acquire this property.

Thank you in advance for sharing your experience!

I have two opportunities coming up and wondered what you think of these:

Property 1 is a duplex is a 1/1 each side and in a town of about 13K population and they are asking around 425 with zero offers on a duplex that when fully rented would be around 3000 gross rent. Right near the cool old downtown area and good schools and A rated area. On market 120+ days. Has a brand new roof and zoned for adding 3rd unit.

Property 2 is in a larger suburb area with about 80K population and in a county of 2 million. Its a duplex 2/2 each side with gross rents of 4000 and asking is 500K. Multiple offers. B grade area and good schools.

I think property 1 will be easier to get under list price but not sure of vacancy rate since it's a smaller town. Both areas are in my backyard and would be self managed. Both need some renovation. Just purely looking at numbers property 2 comes out ahead buy a few hundred bucks a month depending on how high it gets bid up.

Any advice on this?

 How would you handle it, if this was your deal?

Facebook Marketplace is full of drug addicts.

I used to find professionals on Craigslist 

Just did my second on line Notary as seller..  This is a nice service .  I understand most East coast and mid west sellers and buyers insist on going to the closing office and sitting around a table.. I NEVER ever go to closings all of my are remote.. As I have in house notary.. But this week we are fishing and at the lodge.. So I needed to do it on line and it really works pretty slick.. not sure why anyone would go to an office to sign anymore.

In addition I never accept checks for closing settlements.. I only accept wires. I want collectable funds the instant it hits the account.

Anyone else use this ? 

Jan 2023 I purchased a property in Cape Coral, FL. I purchased for $395,000 and rehabbed for $70,000. I took out a hard money loan with Kiavi for one year. I put up for sale with no bites then transitioned to a STR strategy then Kiavi told me they don't refinance unless it's a LTR so I found a renter and went to refinance. Right at a year I start the process of a refi and quickly find out that the renter wasn't paying high enough rent to cover Kiavi's requirements so I had to relist the property. I lost the renters due to them not wanting to cooperate for showings. Despite all of this I was still able to find another lender to refinance until the appraisal came in at $445,000 and everything fell apart. When I purchased the property one year earlier Kiavi gave it an ARV of $610,000! I did all the repairs per spec and under budget and was even able to add four palm trees to the front, a pool heater and fence in the backyard which should have made the value go up! However, the area has plummeted in value and I'm now upside down on this house. I've had it listed for months with one showing and one offer of $380,000.

I have never missed a payment but Kiavi will not negotiate their terms and insist on foreclosure and they just informed me they are moving forward with the foreclosure.  I put in $50,000 of my own money not to mention months away from my three kids while working on the home.  I'm proud of the house I created, it's beautiful & I even have a 5.0 rating on Airbnb.  I honestly feel like I've done everything right and am completely stuck.  I'm devastated and if anyone has any words of wisdom here I would just SO APRRECIATE any help/advice I can get.  I just don't know what else I can possibly do.

Door count is the worst (commonly discussed) metric in the real estate investing community. Why does everyone use it? Can we all decide to collectively kill it? Or are there some of you out there that stand by door count being a useful barometer of success? Honestly, I'd love to hear the argument for why this metric is useful, cause I can't think of one -- so please reply back here. 

Here's my argument. Door count is what many in the analytics world would call a 'vanity metric.' It's something that looks important and fancy,  but doesn't actually tell you anything about business performance. Sound familiar?  It's because door count is a useless metric, it exists to pump up the ego of the investor, and nothing more. Here's why: 

1. Door count tells you exactly nothing about the quality of a portfolio. As an example, let's say Jane T. Investor has 12 doors, and she leads with that when networking. Well 12 doors sounds solid, but how are they performing? Are they cash flowing? Do they require enormous amounts of time and maintenance? Are the returns as good as what other investors in your market/asset class are generating? I know people with huge door counts who lose money every month. What good is a 'door' if it doesn't generate returns? Tell me how efficiently your deals generate returns, and then I'll be impressed. 

2. Prioritizing door count makes you focus on the wrong thing. If I wanted to get 100 doors in the next few years, I bet I could -- but you can bet many of those deals would be thin. Shouldn't we be prioritizing quality over quantity?  If I could choose between earning $5,000/month from 10 doors, or from 5 doors, I would pick 5 doors all day long! Good metrics push you towards good decision making, and door count does the opposite. For a lot of people getting lots of doors would be detrimental to their strategy! 

3. Don't even get me started on passive investor door counts. They're absurd. I invest in multifamily syndications as well as residential properties. On the passive side of my portfolio, I am in syndications that collectively own over 2,000 units. Does that mean I own 2,000 units? Of course not, claiming so would be ridiculous (don't tell people on Instagram, though). If I own 1% of those syndications, does thatmean I own 20 units? I have no idea, nor do I care. Why on earth do I care what % of the doors I own? I care about actual measurements of returns like CoCR, AAROI, and IRR to determine if my portfolio is doing well.

There's my argument -- but I want to be proven wrong. Someone explain to me why this metric is useful. 

I haven't been able to find the answer to this online. So I'm hoping someone here might know. Does the residency requirement for primary housing require living in a legal unit? In Chicago, there are quite a few buildings with illegal garden units, and I thought it might be possible to live in one of those while I'm trying to make it legal with the city but would that be against FHA guidelines or conventional loan requirements? I'm also unsure who to ask this question, is that attorney territory or MLO?