All Forum Posts by: Joy Sandford

Thanks, @Jose Lopez and @Courtney Fricke! Sending you both a message now. I appreciate you all's support!

Joy

Hey folks,

I'm a wholesaler in Cali and just got a call from a bandit sign posted around my market in South Central. The subject property, however, is in Opelousas, Louisiana. I haven't established a network out there, so I don't know of someone who could do a walk through on my behalf to verify the condition of the property (something I think should be done before an offer is made and end buyers see the property profile). What would you all recommend I do to keep the deal moving through the process to close? 

Great query you've started here, Tyler. It seems to me the title of investor is as infinite in its connotations and denotations as being an artists, which I think Investors are anyway! In my first lil investment online course on wholesale investment we learned to declare "I am an investor!" as part of how we began to practice the dance of measuring and managing risks before taking them, the process parking money before intuiting when to pull that money out. You can be a wholesale RE investor, a stock investor, a house flipper, an angel or seed investor–all folks who put money in a thing, watch the money grow with that thing, and at some point, let that thing go (exit strategy). There's lots of ways to freak a deal, and they all seem to have those three steps in common.

A wholesale investor puts time and money in marketing and networking, watches their money grow according to the quality of the leads or deals generated by all that marketing and networking, and their exit strategy is the assignment of the contract. A house flipper (perhaps they gal to whom that wholesaler assigned said contract) parks their money in the rehabilitation of discount property. They watch their money grow as that discount property goes to rehab, gets clean, and is transformed such that it can compete with the other market favs in the area (like Princess Diaries). Their exit strategy is the retailing–or flipping–of that new-and-improved, higher valued property. 

My current fav investor, Ayesha Seldon, calls herself an investor not just because of how many doors she has, but also because of her stock savvy. She's an Investor's Investor who invests because the process is fun and exciting, not just because Warren Buffet said RE is a less volatile place to park, though he ain't lyin. 

Idk if that helps, but it was a fun question to consider. Hope it gets more philosophical and weird in the responses to come!

Hey Eric,

About 4 years ago SF passed a law requiring short-term rental Platforms to register all hosts and their rental property with the city, who'd be monitoring their compliance with these new short-term rental restrictions  (must be renting primary residence of min 6 months out of the year; must rent primary residence/room in residence for max 90 days out of the year). 

Starting in 2018, hosts automatically register their residence when they join Air BnB, but the platform doesn't bar noncompliant resident owners from registering. This means there may be some legally registered hosts that profit for a period of time before city officials identify their property or practice as non compliant. Here in LA, hosts could be fined  ~$500 a day for an illegal rental, ~$2,000 per day for exceeding the annual cap–it's a lot.

That said, know what the law says about registered short-term rental properties, and what the consequences are for breaking 'em. So long as the property your considering for short-term rental platforms like HomeAway and Air BnB is registered with the city/state and you are effectively being monitored in their system, I'd be compliant and would find ways to maximize profits under the city's restrictions. Hope this helps!

Joy

Hey Joseph,

You might create multiple LLCs when purchasing rental properties if you can find lenders in your area that are willing to loan to LLCs. You can title the property with the LLC's name at your county's courthouse. You'll need to purchase insurance in your name with the LLC as an additional party insured, and you might find run into some resistance finding an insurance company that will cover LLCs as a 2nd insured. Hope this helps!

Hey Michael - Congrats on getting that contract! Does the RE Attorney you are working with have access to the MSL, where you can get direct info about the title owner and their insurance/tax payment history. If so, tap into that resource! If not the MLS, you can sign up for a free trial with a lead generation software like Realeflow, where you can get similar info (absentee owners, tax liens, etc.) Here's another BP thread with good suggestions for skip-tracing to find out who to talk to about buying this property:

 https://www.biggerpockets.com/forums/93/topics/154848-best-skip-trace-service

Once you know who to make an offer to, calculate the deal using the trusted formula:

ARV x .70 - Repairs - Assignment Fee = MAO

You're all set to chat with the property owner from here! If the property is bank owned, however, here's another BP thread with great next steps:

https://www.biggerpockets.com/forums/41/topics/213014-bank-owned-properties?page=1#p1422448

Hope this helps!

Hey London,

There are a few give aways for a neighborhood or market that's ready yield favorable returns. Take a look on the MLS; if you don't have access yet, use Zillow under the Recently Sold feature https://www.zillow.com/pottstown-pa/sold/. Here you can view how long properties in the areas you're considering are on the market. If you find there are attractive properties being purchased quickly (three weeks or less) and below market value, that suggests folks are ready and willing to sell low, and that other investors are eager to buy and flip confidently. 

There are the superficial indicators of a good flip as well – proximity to major city hubs and transportation, quality of local school, crime stats in the neighborhood, etc. These are things cash buyers and future home buyers (who will likely finance via banks) are wanting to see proof of even if the surrounding properties aren't presently at their aesthetic best.  

That said, neighborhoods where properties are flipping fast and frequently are neighborhoods that are essentially gentrifying, which is a whooooole other conversation. Empathy and compassion make space for a clear, intuitive approach to identifying neighborhoods – where human people live – that are ripe for flipping fair. Hope this helps! 

Joy

Hey Eric,

If you've bought the property and already have a trusted tenant-in-waiting, plus a year-long lease agreement prepared, that's the B and one of the big Rs taken care of. I'd stack up $425 for a year. Once the lease is up, 20% of that $5.1k from rent I'd save, so $1.02k in the bank. The remaining $4.08k I'd include in the rehab budget, which I imagine you've scoped out. Then I'd refinance and repeat. This way, you can bump up the value of the property so you're stacking more than $425/mo by next year while still building credit (if you've chosen this route of purchase), *and* cash flowing for a spell. Hope this helps! 

Love, Joy

...