All Forum Posts by: Kathleen McDowell

Traded in Vacation rental condo for SFH. Put $125k into the remodel. STR on Airbnb/VRBO earning $33,000 profit a year, while spending 2 months of the year there as a holiday home. Doing a cash out refinance this year to reinvest into other properties.

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

I wanted to have a larger vacation home to accommodate our guests, but rent it out to cover our costs.

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

I found it by canvasing our current neighborhood and offered $45k below asking because the home was in need of a complete remodel.

How did you finance this deal?

Cash.

How did you add value to the deal?

Remodeled the home to get it ready for STRs. It appraised for $1.275m in May 2022.

2 Votes

Investment Info:

Condo buy & hold investment.

Purchase price: $280,000
Cash invested: $55,000

1BR/1 Bath Condo in North Scottsdale. Got under contract while it was Coming Soon. Seller/Agent was remodeling the unit so I was able to select my preferred fixtures and fittings. $0 to get it ready. Marketed property while it was being finished to avoid vacancy. Had tenant in place the day after close at $1550, previous rent was $1200. Cashflow $150 with cashflow 29% ROI thanks to a 3.5% interest rate. Current renter is looking to buy a home, which I will be helping him with.

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

I didnt have to do any of the work to get it rental ready. Easy to rent a fully remodeled unit. Seller was also an agent so very easy to deal with.

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

I always aim to be the first to view a property. I make my offer fast, usually the first day its listed as coming soon, which always benefits me in the end. I explain the benefits of dealing with an agent as a buyer as I know the process and am sure to close.

How did you finance this deal?

Low interest rate 0f 3.5% with 20% down.

How did you add value to the deal?

Rented it for $350 more than previous rent.

0 Votes

Investment Info:

Condo buy & hold investment.

Purchase price: $280,000
Cash invested: $55,000

1BR/1 Bath Condo in North Central Scottsdale. Got under contract while it was Coming Soon. Seller/Agent was remodeling the unit so I was able to select my preferred fixtures and fittings. $0 to get it ready. Marketed property while it was being finished to avoid vacancy. Had tenant in place the day after close at $1550, previous rent was $1200. Cashflow $150 with cashflow 29% ROI thanks to a 3.5% interest rate. Current renter is looking to buy a home, which I will be helping him with. Property also allows STRs so potential to STR in future. Complex has multitude of amenities and attracts numerous snow birds who rent from Dec-April.

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

I didnt have to do any of the work to get it rental ready. Easy to rent a fully remodeled unit. Seller was also an agent so very easy to deal with.

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

How did you finance this deal?

Low interest rate 0f 3.5% with 20% down.

How did you add value to the deal?

Rented it for $350 more than previous rent.

0 Votes

Investment Info:

Condo buy & hold investment.

Purchase price: $285,000
Cash invested: $70,000

1BR/1 Bath Condo in North Central Scottsdale. $3k in upgrades to be able to list at $1625 a month rent for. Previous rent was $1300. Will cashflow in Y2. 20% ROI. Current renter plans to rent long term. Property also allows STRs so potential to STR in future. Complex has multitude of amenities and attracts numerous snow birds who rent from Dec-April.

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

The accelerating market in Scottsdale AZ is making home ownership more difficult for a large part of the population. The appeal of 1 1BR condos is they rent fast (I have yet to have any vacancy - always finding a tenant before closing), where 2 BRs tend to sit on market longer. There will always be a need for 1 BRs for young professionals starting out who are priced out of home ownership. This complex is near a hospital and schools. A teacher is renting this one long term.

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

I already owned a condo in this complex so was familiar with it. The HOAs are lower than what you'd pay for pool and garden maintenance on a SFH.

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

I represented myself on this deal, offering 1% back on buyer broker to beat out the competition. The selling agent preferred to work direct with another realtor.

0 Votes

Quote from @Shiloh Lundahl:

@Erin Lachance to be honest with you, I have become disillusioned with Josiah and KeyGlee Homes or KeyGlee Investments. Josiah and his partners have a big wholesaling presence in Arizona and I have bought several properties from them in the past. In fact, I had Josiah come out and speak to my investor meetup group and he did a great job explaining their wholesaling model. However, since they got bigger, they have really lost touch with some of their investor base and have stopped treating their investors as they used to.

Here are a couple of recent examples: 1) they sent out a deal in Mesa, AZ and I looked at it and called and talked with them about it and then I drove by the property to look at it closer. I told them that I wanted it, I signed the purchase agreement and I deposited the earnest money with the title company. I then called them and asked if we could close it with my title company who is able to close in such a way where she includes rehab costs into the closing and it helps me be able to get a cash out refi quicker. Kevin at KeyGlee told me “no” that they weren’t going to change the title company or close it how I wanted to. I said that I didn’t know if I’d be able to do the deal the way they had it set up and that I needed a coupe of days to think about it. I tried talking to Josiah but I never got him to return my calls or texts. Then when I called to verify the closing date, because I was going to go ahead and close on it anyway, they had sold it to someone else. So I had the purchase agreement signed and I had my earnest money deposited and they sold it to a different investor without following up or talking with me about it.

Example 2) I had a problem property in Phoenix that I decided that I wanted to sell. They had just sent out a property on their email list 3 doors down from the one I decided that I wanted to sell. I called and talked with Kevin to ask him who the investor was who bought the other property to see if they would be interested in buying my property which was right by the property they wholesaled. Kevin said that they don’t give out their investor list and that was it. I told him I did’t want their list I just wanted to speak with the investor who bought that specific property to see if he wanted to buy mine as well. He said he wasn’t going to tell me and then offered to wholesale the property for me if I wanted him to. I reached out to Josiah to find out what was going on with the people in his company now and he never returned my calls or my texts.

So whereas Josiah Grimes and KeyGlee used to be a one of the wholesaler groups I liked working with in Arizona, now I don’t really care to work with them anymore.

I too was looking forward to working with KeyGlee given their strong presence in AZ. I brought them into a deal to buy a property informing them it could not be wholesaled. They confirmed they would not wholesale it and told me they would be doing a fix and flip. While under contract they tried to wholesale it behind my back. When I confronted them they lied and said they were not trying to wholesale it (yet it was on their website). They cancelled the contract at the last minute when they couldn't wholesale it. Disappointed that Jamil markets his company as 'ethical wholesalers' who depend on RE agents as their partners, but then do not operate in an ethical manner.

2 Votes

Quote from @Darren Sager:

@Elliot Lamson your Realtor, in my opinion, should have done a couple things differently just to make the situation easier for both of you.

First off they should have asked the seller, wholesaler or not, what they would be getting paid for such sale of property. In this case they should have known up front that there weren't going to get paid for such listing which would have brought me back personally to a conversation that I've had with other investors that I work with which is the following:

On off market deals in which the seller (no matter who) is not paying a commission I'll work either two ways but first off let me say I won't bring you the deal unless you're going to give me the listing when it comes to retail (the finished product) so that's that. If we're not clear on that we're not working together. Now that's covered I'll get paid one of two ways, either by you paying me out 2.5%-3% on top of what they seller is letting you have the place for OR you can pay me later, when the house is brought to market, at a higher % which is NOT evenly split with the buyer's agent. So an example may be me getting 4% and buyer's agent getting 2.5%. I'm getting an additional 1.5% for the commission you didn't pay me first go around.

Your agent, by not finding out if they were getting paid by the seller in this case made the mistake and THEY should have to eat it if they were a professional and didn't do their homework on the deal. That being said I would figure out a way to make the realtor happy so that they do actually feed you more good opportunities going forward. Find out a way to make it win win. But have a conversation with them before you do any other deals going forward. AND have the conversation with any other realtors you're working with so this never happen again.

Thank you Darren. Can you clarify in the 1st scenario where they are paying you 2.5-3% on top of sale price, are you also having to represent them as buyer's agent to earn this? Or is it just a fee for finding the deal for them? I have some off market deals and want to bring them to investors who are part of a company that has its own licensed realtors. Was not sure if I had to then be their buyers agent to earn the fee and complete their offers etc. Also, have you ever done a 3rd scenario where you earn a percentage of the equity they earn after the property is sold? As a new realtor, I was not sure how these fees (on top of sales price, or % of equity) would be handled by my broker if I am not representing them. Are they treated differently from commissions earned representing buyers and sellers? Thank you!

0 Votes

Originally posted by @Whit B.:

@Kathleen McDowell do you mind sharing who gave you the HELOC with that intro rate? Congrats on investment!

I was able to get a HELOC with Desert Financial Credit Union. 2.99% is a 1 yr intro rate - goes to just over 4% after that. They are the only one in the area I know of doing HELOCs

0 Votes

Investment Info:

Condo buy & hold investment.

Purchase price: $230,000
Cash invested: $230,000

1BR/1 Bath Condo in North Central Scottsdale. $8k in upgrades to be able to list at $1400 a month rent. Was able to negotiate seller to cover $5500 for new HVAC and $600 for new dishwasher. Expect $50 month cashflow. Property also allows STRs so potential to STR in future. Complex has multitude of amenities and attracts numerous snow birds who rent from Dec-April.

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

The condo is around the corner from my house so I know the area well. It offers both LT and STR opportunities and is a popular area for snowbirds.

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

Found on MLS. The property was in the process of counter offers when I called agent. I offered to pay list price (same as what was being countered) and discounting my buyer's commission by 1%, as well as offering free rent back to owner for 2 weeks.

How did you finance this deal?

Cash from a HELOC. When intro rate of 2.99% on HELOC expires, will complete a cash out refi.

How did you add value to the deal?

Win-Win for myself and seller as he wanted to stay in property past COE and I wanted to begin remodeling. Owner allows me to measure and prep home for remodel. I was able to negotiate new HVAC (even though original one is working) and new dishwasher, saving on rental ready budget.

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

I represented myself as buyer agent

0 Votes

All Forum Posts by: Kathleen McDowell

Kathleen McDowell has started 10 posts and replied 58 times.

Post: SFH Second Home in Lake Tahoe, STR

Post: Condo Investment Buy and Hold in Scottsdale AZ

Post: Condo Investment Buy and Hold in Scottsdale AZ

Post: Condo Investment Buy and Hold in Scottsdale AZ

Post: Astro Flipping Wholesale Contracts

Post: Realtor tacking on 3% on top of wholesalers deal.

Post: 1st Condo Investment Buy and Hold in Scottsdale AZ

Post: 1st Condo Investment Buy and Hold in Scottsdale AZ