All Forum Posts by: Crystal Smith
Crystal Smith has started 65 posts and replied 2753 times.
Post: Biggerpockets and AI
- Real Estate Broker
- Chicago, IL
- Posts 2,814
- Votes 1,750
I've been a BP member for quite a few years. What we like about the platform is the ability to establish relationships with people. Some of them have become friends, clients, and partners. I have even enjoyed monitoring the petty arguments that sometimes happen on certain threads. I don't know the answer, but in my opinion, Bigger Pockets should be the platform that the public comes to when a new or experienced investor wants to hear from & network with real people.
Post: Need Help Scaling!
- Real Estate Broker
- Chicago, IL
- Posts 2,814
- Votes 1,750
1. Find a multifamily to house hack
2. Research if you can qualfiy for a DSCR loan
3. Find partner(s)
4. While you may not want to cash out and refi the 3% loan you currently have, if it's holding you back from growing then maybe you should reconsder. Run some what if analysis- What if you cash out and could acquire an asset that through off more cash to make up for the higher rate or better yet increase your cash flow. Do those opportunities exist in your market?
Post: Seeking Advice on Making an Off-Market Home Offer
- Real Estate Broker
- Chicago, IL
- Posts 2,814
- Votes 1,750
Quote from @Justin Campbell:
Hello everyone,
I hope this message finds you well. I'm currently interested in making an off-market offer on a home currently owned by an elderly couple that is downsizing.
Here are some details about the property:
- **Location:** The home is situated on a popular lake, which I believe adds significant value.
- **Year Built:** It was constructed in 1960 and has not undergone any updates since then. Currently a 2bd 3bath. I would convert a sitting room to a 3rd bedroom and finish the basement.
- **Lot:** The lot itself is great, which is another appealing aspect of the property.
- **Tax Assessed Value:** The home has a tax assessed value of $512,000.
Given these factors, I would love to hear your thoughts on how to approach making an off-market offer. Specifically, I’m looking for advice on:
1. **Pricing Strategy:** Considering the assessed value and the home's condition, what would be a reasonable offer? Reno would include a full kitchen, 3 bathrooms updated, new floors throughout, replacing paneling with drywall, and updating utilities, creating 3rd bedroom (office), and finishing the basement.
How should I frame my offer to make it attractive to the seller?
First off- the assessed value is mostly irrelevant. The assessed value is what the city uses to determine the property taxes that will be charged. We have found there is very little correlation between that assessed value and the actual market value. You need to determine the potential After Repair Value (ARV) by researching the comparable properties that are updated in the area that have recently sold. We usually look within a one mile radius in the last 6 months, but your market may be different. While deciding that ARV , you should also determine the cost to update the property. Then you can establish your "Profit Strategy"
With regards to the seller and making your offer attractive, provide the seller with options. Options that still allow you to satisfy your profit strategy. Example- Cash offer (which may be low but you close fast); A financed offer which may be higher but longer to close; seller financed offer which may mean less money out of pocket for you upfront but more money for the seller in the long run.......
Post: Pay cash or use HELOC
- Real Estate Broker
- Chicago, IL
- Posts 2,814
- Votes 1,750
Quote from @Scott Suryan:
I have a property that I am in the final stages of title work that I will be buying. It is a 2/1 in in a "C" neighborhood. The cash price is $58K. The tenants are long term and they have no desire to move anywhere else. They are willing to sign a two year lease and go from $950 to $1050 a month and they pay all utilities. The inspection came back with fixes but nothing that is immediate and can be done over time nothing needed immediately that is more than a couple of thousand dollars in all.
My dilemma is do I pay cash and have a property owned free and clear that is kicking off almost $500 a month in free cash flow (after reserves for maintenance and cap ex and taxes/ insurance are taken out too) or do I use the HELOC and save my cash? HELOC rate is 8.99%. I have more room in the HELOC for other REI down payments etc.
I am leaning toward paying cash but want to know if I am missing something. Thank you for your feedback.
Scott Suryan
Pay cash. Let the property season for one year, then get a loan against the property and pull out as much of your cash as possible so you can buy another one. Save your HELOC for emergencies.
Post: Please help me!
- Real Estate Broker
- Chicago, IL
- Posts 2,814
- Votes 1,750
Quote from @Logan Stamps:
Hello BiggerPockets Community,
I hope this message finds you well. My name is Logan Stamps, and I am new to the world of real estate investing, specifically virtual wholesaling. I've been immersing myself in various resources to understand the fundamentals and best practices.
One area where I find myself seeking guidance is in building a network remotely. Establishing connections with motivated sellers, reliable buyers, and industry professionals is crucial for success in this field. Given that I'm operating from Bend, OR, I would greatly appreciate any advice or strategies you might have on identifying and connecting with motivated sellers in target markets, building a list of cash buyers interested in virtual wholesale deals, utilizing digital tools and platforms to facilitate virtual transactions, and navigating legal considerations and ensuring compliance across different states.
Additionally, if there are any common pitfalls that beginners should be aware of, I would be grateful for your insights.
Thank you for taking the time to read my post. I look forward to learning from your experiences and becoming an active member of this community.
Best regards,
Logan S. Stamps
The common pitfall is not making the property investment in systems to manage & automate the business and never actually owning a property for a fix and flip or buy and hold. (In my opinion).
My recommendation: Join a company, part or full time) that specializes in investment properties. (You'll note that I did not say in wholesaling). Example New Western. You may or may not need to get a real estate license to join. While working for a company like this examine the type of systems and processes they use to run their business. New Western is not a "virtual wholesaler". (Still not sure what the heck that means) but they are in multiple states and operate compliantly. (We have purchased from them in Missouri and Texas. They also operate in Illinois).
Find a company like that in your area, learn all you can and then branch off to do your own thing.
Post: Beginner in wholesale
- Real Estate Broker
- Chicago, IL
- Posts 2,814
- Votes 1,750
Quote from @Jonathan Worrell:
I am looking to get started in wholesaling, but as with any new venture, getting started can be the hardest part. I'm currently working on building a network of cash buyers in the East Texas area and would appreciate any advice on the best strategies for finding them.
I currently own rental property, but my goal is to use wholesaling as a way to generate more capital for future multifamily investments.
Any tips or insights would be greatly appreciated. Thank you!
You may consider establishing a relationship with a realtor. In my market the systems I have access to i can easily look at recent sales and find out who purchased with cash. Make sure you make it a win-win for the realtor if you decide to use this strategy.
Post: Inherited Home- best way to finance a rehab
- Real Estate Broker
- Chicago, IL
- Posts 2,814
- Votes 1,750
Quote from @Kristi Barron:
Inherited a home. Looking to remodel. I'm completely new to real estate.
What is the best way to find capital to remodel? Bank loan or 401k loan?
I'm looking to update from 3 bedroom 1 bath to a 4 bedroom 2 bath house. What is the best tip to make sure you don't over-renovate a home?
Thanks!
Regarding finding capital- The ansswer is it depends. If you have inhertied it and decide that you're going to be an owner occupant for a little wheile then you can consider borrrowing againt the equity of the home to do your upgrades. If you're going to be an owner occupant and will eventually sell it then there are some companies that will provide you with the capital to update/upgrade if you have a lot of equity in the home. We work with one that will provide interest free loans for a short period of time if you have equity and a FICO of 650 ore more.
Under certain conditions you can use an FHA203K if you are inheriting & plan on occupying the home for at least one year
If you don't plan on occupying the property then your next best solution is to get approved for a bank, private or hard money loan.
Regarding no over renovating--if the property is in a subdivision with lots of recent sales (at least 3 similar proprties within the last 6 months) go on Redfin or zillow and examine the finishes of the recently sold properties. if you have a realtor in mind to help you sell the property once the renovation is complete, ask the realtor to send you a comparative market analysis with lots of pictures of recently sold homes. The market will tell you what to do.
Post: Out of State investing does not work. With very few exceptions.
- Real Estate Broker
- Chicago, IL
- Posts 2,814
- Votes 1,750
Quote from @Marcus Auerbach:
Quote from @Crystal Smith:
I'm coming to this thread late and will agree that OOS has not worked for the poster of this thread. Here's how it has worked for us in the past- It worked for us when we acted as a local- i.e. local partners, local attorneys, local realtors, local..... And that includes budgeting for traveling into the local market.
Yup, that's my point: there is friction involved that you don't have when you are local and you can stop by on your way home. This gives the OOS investor a built-in disadvantage over local investors. With a large enough economic delta between the market where you live and where you invest, it still does make financial sense. The benefits outweigh the friction losses. And you can mitigate those by investing in better-quality properties. The lower grade the investment is, the more interactions you will have for repairs and tenants, the more opportunities for extra friction - which materializes as a cost. If you apply first principle thinking, you want to strategically minimize the number of opportunities to interact with the property.
That's why over the years we have tightened the radius of our investments even more to about 20 minutes, so I don't go to the south side of Milwaukee, even though I see a lot of great opportunities there.
And I am lucky to live in a great market; however I have to add it was not considered great when I started here in 2009 and everything was falling apart. That was really just dumb luck that my corporate job got me here.
Maybe it's just our business plan, but we treat local investments just like Out-of-state investments. We don't "stop by on our way home". Using your words. We pay the trusted service providers that we have established relationships to do their jobs. Otherwise, for us, it would become another job, not an investment. I'm not saying that we never physically check, but our model was to learn how to manage the service providers.
The model isn't for everyone, but my partner established the model when all of our investments were in one small market, and we decided that we could not grow if we only focused on that market. He traveled extensively in a corporate job, managing operations across a few different countries. Then, we started purchasing Out of State & treated the real estate portfolio the same as separate corporate operations, relying on locals to run the operation.
I forgot to mention this in my original response to your post We rarely invested alone when we went out of state- We always tried to invest with a local(s).
Post: Out of State investing does not work. With very few exceptions.
- Real Estate Broker
- Chicago, IL
- Posts 2,814
- Votes 1,750
Quote from @Stuart Udis:
@Crystal Smith Of course it works for the local realtor, attorney, GC, PM. The out of state investor is entirely dependent on their services and these service providers get paid regardless of whether the property performs well for the owner. In fact, the worse the property performs the more fees are generated for these service providers. What Marcus is getting at is whether the arrangement is profitable for the actual owner given the higher amount of dependency.
My point- Being an OOS investor/owner has worked for our business. The relationships we established at local levels to conduct due diligence and manage our projects before and after pulling the trigger so far have not been much different than investing locally. I am just as dependent on the local team of service providers as I am on an out of state team. The only difference, which I did not mention in my response to the poster is we usually have an Out of State partner that is local to the market.
Post: Out of State investing does not work. With very few exceptions.
- Real Estate Broker
- Chicago, IL
- Posts 2,814
- Votes 1,750
I'm coming to this thread late and will agree that OOS has not worked for the poster of this thread. Here's how it has worked for us in the past- It worked for us when we acted as a local- i.e. local partners, local attorneys, local realtors, local..... And that includes budgeting for traveling into the local market.