All Forum Posts by: Constance Kawa-Small

Property inside me is not for sale

Hey BPs!

I live in Brasilia, capital of Brazil. I work in the real estate business in Brazil, commercial and logistics. I started to study the American market about two years ago now I'm ready to take the next step.

I pretend to invest in turnkeys and after start fix and flip houses. Any international investor on this path?

Anyone have already helped foreigns invest in America? Feel free to PM me.

Regards from Brazil.

We've been through many over 30+ years but the one we have now is invaluable. Saved us a LOT of money & headaches & helped put some very profitable deals together. I bet we're at his offices 3-4 times a month sometimes as walk-ins & they joke about renting us space.

Thanks Pat! That's funny! It sounds you are closing multiple deals often. When did you decide to first reach to one? As a beginner or experienced and high volume? I'm about to close on my first few deals without a real estate agent and was wondering if I should get one to review the legalities?  

@Chad Acerboni

I'm closing today on my first out of state BRRRR in Indianapolis. FINALLY!

There’s lots of good markets. Most of them have fairly similar attributes as far as the numbers go. When I first started researching markets I made the mistake of obsessing over the macro economic aspects. What I should have been focused on was finding the right people, not the right product. Once I finally realized my mistake things started to come together. 

Birmingham was my first choice, but I couldn’t build a team down there for the life of me. After months of trying I decided to change my approach. Instead of looking for a market, I would look for people that were willing to be my boots on the ground. The market they were in would be of secondary importance. Didn’t take long to find what I needed. 

Price to rent ratios, Taxes, jobs, population growth.  I think any market that meets these big 4 is a safe bet. 

Hi @Constance Kawa-Small!  If you are looking to invest, may I suggest Indianapolis.  It shows great potential.  

For these cheepo ones 

The things I look for is location, Roof condition and preferably all brick with Roof life remaining at least 5-10 years. 

Run title search to ensure that I will be able to obtain a warranty deed if needed at the time of sale. 

I also try to get them with a minimum of 12-18 months left before it heads to the tax auction.

Vacant or owner occupied preferred and if not do a cash for keys kind of thing when needed and drop off a big box of contractor trash bags before I give a penny.

On these I will accept quit claim deeds after title search clears. Take responsibility of taxes and water  

Clean out whatever is left then board up. 

No insurance. No tax payments. Let it season until the next season or 2 and flip. Although Many times I do flip immediately. 

Like you say “The key is in the buy” 

I like to think of these ones like a used car I’m buying and I’m going to park it until I sell it for more. 

I try not to sell them but somehow I always end up selling and just keep it moving. Only on 2 I have actually paid the taxes to prevent foreclosure. 

It is risky yes. But at the end of the day I’m very thankful that I’ve had a good experience with all of these even the ones with the squatters. 

 

Adding to the list :

1) Aviation Sub

2) Berg Lahser

3) Greenwich

4) West Outer Dr

5) Malver Hill

6) Martin Park

These are next Bagleys, Palmer Woods, University Dist which are primed to give a big ROI/Capital growth in the next 3-5 years.

From 0 to 100 properties in 14 months…My personal experience

It may sound strange, or fake. But is not. My main objective here is sharing my personal experience with RE in the city of Detroit MI (and my first experience in Real Estate at all), basically to encourage those that are starting and just get surrounded with NOers and also to remember the big investors that the bullish spirit can never die.

Everything started January 2017 when reading a book that changed my life “Rich Dad, Poor Dad” (Robert’s Kiyosaki best seller that doesn’t need introduction), not essentially for the content that is pretty repetitive but for the hidden message of building wealth for passive income purposes. Later in August I decided to buy “The Book on Rental Property Investing” from Brandon Turner. I decide to start in RE in a distressed market. Why? Because I come from investment banking industry and I have done pretty well always with distressed assets (oil and gas in Texas, agribusiness in Latin America), so why not distressed Real Estate? Why not rentals? And even more challenging…why not Detroit MI (yes…I know…you are shaking your head Lol…keep reading, this one is a happy ending story).

January 2018 decided to book flight tickets to Detroit, one hotel night and a rented car. 500 miles in two days, more than 20 neighborhoods visited and one clear impression: “if I want to succeed here I will have to invest in”:

• Travelling often to the City (I live out of country with a connecting flight and almost 18 hs. To make it to Detroit)
• Developing a local Team (MOST IMPORTANT) to be my boots on the ground
• Hire inspection companies and try to be in every property I want to buy
• Have a GREAT real estate attorney (in charge of double checking all property related paperwork, Deeds, etc). Title houses don’t work for you, they want to execute transactions to get paid.
• Deal flow (MLS, off market, direct owner, Facebook, Instagram)
• CASH. I have done all my transactions cash, this has helped a lot. I know is not the common rule but is one of the factors that allowed to grow the rental portfolio that fast.

July 2018: closed my first property, those feelings that you will never forget. A nice 3/1 bungalow in a C class neighborhood in Detroit. Last week closed property #100.

My strategy: focus on 3/1 SFH with cosmetic repairs needed in up and coming neighborhoods, avoid structural damaged properties, NO fire damaged properties, No blights in the block, not vandalized houses in the block, screen tenants.

What I learnt from a challenging market like Detroit? (remember I have invested in class C and D neighborhoods).

• Cash is king (applies for every market LOL)
• Develop a local team you can trust on
• Always put “final water reading” as a condition to close in the Purchase Agreement (I have avoided $10,000 past water bills “surprises” doing this)
• Hire a good real estate attorney. Yes I know that title houses are responsible for doing it properly and you have the title insurance. If you are out of country its worth every penny when a real estate attorney puts on an email “I have checked all paperwork, you are good to sign the P.A. and wire funds”
• Always put the inspection contingency in your PA (feel comfortable with the period, I put 7 days).
• Send a certified inspector to the property
• Try to walkthrough every property you put an offer on. Make your videos, make your notes, write down your numbers to an Excel and try to understand if it makes sense to put an offer.
• Be picky with the level of tenants you want (you have invested a lot of money in the property and they have to take care).
• Tenants pay utilities (including water)
• Have your internal Maintenance Guy (when you reach volume like this is worth having this instead of calling maintenance every time something happens).

My results so far:

• Occupancy rate: 98% (two properties have been recently vacated)
• Evictions: 1
• Avg. Rent: stabilized portfolio at $825/month/property
• NET ROI / year: 12.6%
• Portfolio Capital Gain: 14% in one year.

The part that nobody says is that in this last year I have invested more than $18,000 in flight tickets, $13,540 in accommodation, $12,800 in car rentals, over $50,000 in legal fees, $1,500,000 in rehabs and hundreds of hours far away from family, nights sleeping on a plane, jet lag, airports rescheduling. Is it worth? Every single penny. So you better close your laptop or lock your phone and start making decisions that will change your life.

@Constance Kawa-Small. My out of town/country investors mostly request Bagley,University District, Morningside,East English Village,Rosedale, Grandmont. Research these areas to start. Born and raised here. It’s important to get with good people who are familiar with the City. Some Realtors and Investors only know about the city from newspaper and news clips