Serious newbie in St Petersburg, FL

[Debbie Meteraud]

I am both new to the St Petersburg area as well as investing as a career. My education and previous work experience is in interior design focusing primarily on kitchen/ bath remodeling and new construction. I currently have 2 rental properties, one with a lot of equity, not so much on the other one and some money in the bank. I am an entrepreneur, recently sold a business in Key West and I don't want to "get a job". I enjoy seeing an ugly house transformed into a sensible, comfortable, and yes, aesthetically pleasing home. 

I would like to create a portfolio of real estate that provides a source of regular monthly income and I'd like to flip houses to create quicker profits and satisfy my creative side.

Currently I am seeking as much information as I can absorb. BP has been a great source! I'm also reading J. Scott's book, The Book on Flipping Houses. I plan to attend a MeetUp next week where I hope to meet other local investors. I welcome any advice or guidance BP members have to offer!

[Account Closed]

Hello Debbie,

Isn't it great when you sell a business and you walk with cash and move to a wonderful area at the same time.

So.......you are sitting on some cash, you feel good and a little apprehensive entering into a new career of real estate investing. And I guess you don't want to lose your hard earned capital.

May I suggest the following - Active the 50 house rule.

• Look at 50 houses in the area you want to invest. But do not buy or make an offer on any of them, regardless of how excited you get or the pressures from the real estate agent. Look at houses that you wouldn't normally be interested in, ugly shacks as well as better homes. Keep in mind that you are looking to buy EQUITY, sure a house comes with it, but EQUITY is where you will grow your business.
• Keep a journal of detailed information on each property you look at, comments from the agent, a copy of the listing, pictures and comments of the owner.  Divide the S.F. of the house into the asking price to come up with a price per S.F. (this information will be valuable to you later on) You want to know how long it has been listed  (DOM - days on market), any offers, and comparable sales in the area.
• Get to know agents in the area, do not restrict you viewings to one agent. (Treat the agents well, fill their tank up with gas, buy lunch), You may want to start by calling the local real estate office, but whom ever answer the phone, ask to speak to the manager or broker.  Let him or her know that you have some cash and you want to start investing in the area, ask the broker or manager to refer an agent to you who is experienced in investment properties. The reason you want a referral is because you want a professional to work with you. Too bad, but some agents get into real estate to get out of the house or to meet other people. Interview the agent; how long in business, how many and what types of properties have they listed or sold, do they understand any creative financing techniques.
• When you are ready (after having looked at 50 houses), talk to the agent you like and let them know you would like for them to represent you and that you want to look at expired listings and FSBO's. Many agents will reject this because they are use to getting paid by the owner. Tell them, and their broker that you will pay them a commission on any house you buy that is not listed (FSBO's and Expired Listings).
• By the time you are finished looking at all of those properties, you will be very familiar with the area, the properties and the values.
• Now you might be ready to make some offers. To conserve you cash, always ask for some subordinated financing (owner financing that is in second place), also negotiate substitution of collateral and discount for early pay off clause in the mortgage document. With this type of leverage you should be able to build a nice stable of rentals.

I hope this was helpful, good luck, it is a great business when you can master it.

Charles Parrish