All Forum Posts by: Jennifer Stradtman

Hi, Braden.  Thank you.  I’ll gladly take the help.  

I use both realtors to buy low priced rental properties  ( less than $250k) and I use only one to rent my properties and occasionally sell a property.  On the buy side, I have bought close to market price so it wasn’t a problem for either.  Now, with a little more knowledge, I’m more diligent about what my purchase price needs to be to hit the returns I want to see. I want to earn a minimum of 15%.  

I found a 4/3.5 townhouse at $158,500. the market is strong in Nashville for sellers. But, I still wanted to start out with an offer around $129k to see where the bottom was in the sale. Seller bought at $60k. There are two identical units for sale in the subdivision. One on the market for 60 days the other for 120 days. One is currently occupied and renting for $1250. Market shows it should rent for $1350. HOA is $242. It was a struggle but I finally got my realtor to agree to put in an offer at $131k. My ideal would be to buy at or less than $140k.

My realtor refused to place an offer at $129k and said “ they’re not selling it based on their purchase price, they’re selling it based on market price.”  Well, of course. That’s what I would do.  But, I have six houses all in different stages. Two are listed for sale.  I’d take a lot less than list on two because the market isn’t working in my favor.  I’d hold my price on the others.  So, market is a relative term to me based on individual circumstances. 

What am I doing wrong? How am I looking at it wrong? Or how should I communicate better? 

Jennifer 

 

I max out my 401k for the match and to reduce my taxable base.  But, I have money invested in the market and ready when I find a property to buy.  I usually borrow my own money on margin and pay myself back.  Instant access to funds without the need for bank involvement.  But, why not take full advantage of free money (match) without any risks?  

I don’t know about you but I am having a tough time with my realtors.  Thanks to many of the BP guidance webinars and success stories I’ve read lately I decided to step up my game and buy more properties this year. Five is my goal. The problem...I don’t want to pay asking price, retail prices, market rates or anything loosely related to too much money,  I have two realtors I usually work with but I’m having trouble getting either to want to put in the offers at my starting price. It’s not crazy low - maybe 15% below asking. I’m willing to go up a little to maybe 10% in negotiations.  Why the reluctance to even ask? You never know the bottom if you don’t at least try to find it.

Am I being unreasonable?

The ABC’s if Real Estate Investing - part of the Rich Dad, Poor Dad series of books helped me understand enough to make my first investment. It has been a huge success. Read it.  And as many have said, take the time to work in your area of interest  on someone else’s dime to learn it and gain credibility. A few years won’t hurt you. It will help. It’s a marathon not a sprint. Save your money 10% of every dollar you earn. You will see how wise that small step will be.  

And, good luck. Don’t give up.  

I was advised by a friend with a large portfolio to set up a separate LLC for each property as added protection. More work up front but if you have someone sue your LLC from injury, etc. they would get what is in that LLC....not everything you own. Of course, ask a lawyer. But this makes sense to me.

Every deal I’ve done has been a 50/50 split with me putting up the cash.  Your ‘partners’ seem to be trying to ltake advantage. I wouldn’t do it.

Investment Info:

Single-family residence buy & hold investment in Nolensville.

Purchase price: $414,000
Cash invested: $56,000

Bought at auction. Appraised $135k above purchase in less than a year.

What made you interested in investing in this type of deal?

Auction, research suggested the house would sell below market, cosmetic improvements could improve value, highly desirable area.

How did you find this deal and how did you negotiate it?

Research of mls, auction sites, working with agents, driving neighborhoods.

How did you finance this deal?

Conventional it’s personal cash down. I have a relationship with a banker who understands investors.

How did you add value to the deal?

Cleared some land, renovated master bath.

What was the outcome?

Bought for $414k including auctioneer fee. Appraised for $505k. Spent $13.5k to clear trees. Spent $20k to renovate bathroom. Appraised for $550k.

Lessons learned? Challenges?

Do not plan on a lot of interior renovations to vastly improve property values. That’s not a sure thing based on comps. Adding square footage, decks and such have a greater impact. County doesn’t. Always approve expansion plans due to perk limitations. Not all architects understand building costs.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I used my agent to help me close after I found the deal. It’s worth his fee to me. In an auction, the auctioneer pays it out of his fee. Victor Ganatra. He does good work. I have my banker at Capstar Bank. Will share her name if we can network and share valuable resources.