All Forum Posts by: Kyle Spearin

@Brian Cannon commenting to hear what people are saying as I invest in DFW!

Mind sharing more of the details on your investment? Looks like you're having success and I commend you for it.

Loved this post, couldn't agree more!

@Amha Demissie it's awesome that you started in 2019 and as you mentioned, you've probably built significant equity during that time. I'm gonna offer a different perspective than what's been noted just so you see another option.

What if you sold your primary and parlayed that into a 4 family in Boston? 

I'm assuming you want to keep your primary because it has a low interest rate. But if you took a HELOC, which tends to have relatively high interest rates, your blended rate (the average of what you're paying on your mortgage plus the rate on the HELOC) would likely be in the same range as today's mortgage rate.

You'd also only be renting out one unit, but by selling it might allow you to get more than one additional unit and still grow your portfolio. Why not pull out the capital you have tied up to have a larger down payment (or even spread it over multiple properties) and maybe even keep some extra money in the bank for reserves and renovations?

@Lei Qin I went to UMass and wish I'd bought something there when I graduated. It keeps expanding! The market certainly offers a tremendous pool of renters in the form of students and staff as @Jonathan Greene pointed out. You might also be able to employ a short term rental strategy to increase cashflow-- sporting events, conferences, homecomings, graduation, etc. always attract people to the area.

Ask around and try to find people who are investing in Amherst/Northampton and connect with agents in the area to see what's working.

@Tim DiMario, welcome to the community!

Just by joining BP, you're already making tremendous progress-- lot's of great ideas and people to network with. As you're getting started, it's VERY easy to read an article on one thing, then see another strategy or market and get sucked in to a never ending cycle of shining object syndrome.

Here are a few recommendations for getting started:

1. Identify your market and strategy to go with it. You'll find tons of posts on this, so I won't elaborate much.

2. Don't bet it all on your first deal. Think about how you can get your feet wet in a low risk way, while trying a strategy you become interested in. For example, if you're interested in flipping, you might try buying a fixer-upper as your primary residence and trying to renovate in a timely manner. This would protect you from downside, while offering potential upside. 

3. Make connections with people by participating on the BP forums, going to meetups (@Andrew Freed has a great one in Worcester and I run one in Boston). This will help you start building your team, learn a lot, and refine your criteria.

Good luck and don't hesitate to reach out!

@Ryan Cleary I used a 5% down conventional loan. The way we structured it was that the 5% commission was a "gift" to my wife who was also on the loan/title.

I'm wondering how people in this space are going to pivot. If you currently do wholesale deals, how will you work with sellers and buyers? Does it mean just getting a license and selling deals "off market" to end buyers rather than getting them under contract? 

Super interested in this.

As for end-buyers like flippers and other value add investors, will you look for other ways to find deals now?

If you listen to the BiggerPockets podcast, you’ve probably heard David Greene say something like “in these market conditions, good deals are made.” 

I want to show you how I was able to put 0% down on a house hack/live-in flip in the Boston metro area…not to toot my own horn, but because I believe that ANYONE can create a good deal when buying a house hack.

Deal Backstory: Driving for Dollars, “Farming” and Referrals

For the past few months, my wife and I have been putting in offers around the Boston metro area only to lose bidding wars with people paying $50k to $100k over asking. Sound familiar?

After getting discouraged, we decided to take a different approach: looking for off market deals. I reached out to people in my network such as friends and family as well as local agents that I knew from being an agent myself. When I’d reach out, I would simply say something simple like “I'm looking for fixer-upper houses and can buy it off market for an on market price. If you know anyone, just let me know and we can figure something out!”

A month later, a family friend referred me to someone looking to sell after the loss of a loved one. They didn’t want to sell on the market because they didn’t want to do showings.

A Win-Win Offer: These are the Terms that Were Accepted

-$500k Purchase Price. The high end of what as-is comps were selling for in the area was about $490k.

-2 months before closing. This gave the seller time to pack and relocate. I connected the seller with agents in other markets and also set up an MLS search in case they wanted to rent instead of buy upon selling.

-My terms: a 5% commission (I’m a licensed agent) to be credited at closing towards the purchase, plus $10k towards closing costs. In exchange for paying the high end of comps for the house at $500k without going on the market, the buyer was ok paying a commission because they knew they’d have to anyway to fetch that price on market. Since I offered slightly higher than comps, it was still a good deal for them!

Actionable Steps for YOU to do the Same

1. Talk to list agents and get referrals from your network.

Chances are that someone you know knows someone who wants to sell–you just haven’t asked. In regards to real estate agents, they could save a ton of time with staging/showings and even dealing with other agents if you buy a house from them off market. You could even let them double end the deal for 5% commission because you’re taking out the competition so there’s no chance of a bidding war.

2. Find ways to Create win-win scenarios.

What could you do to help the seller solve their problem? I listened to the seller’s wants, showed them the comps for the area, and built trust by showing that I wasn’t trying to screw them over. As a result, I got terms that worked for everyone involved.

3. Don’t be afraid to “overpay”

As investors, we always want the best price, but that could be to your detriment. What if you could pay a little more on paper to get a better return later? If I’d tried to buy the same house on the market, I might’ve gotten it for $10k less but I also might’ve had to pay more. 

People who do short term rentals might be willing to pay more because they know that their nightly price is more than what market rent is in certain areas. That leads me to my next point…

4. Know your comps, know your market

I bought the house for $500k knowing that I can put $50k of work into it and get an ARV (after repair value) of $600k based on comps that sold in the same neighborhood– I'm willing to put in the work to make this happen and can take my time since it'll be my primary residence.

As a house-hacker, you’re likely choosing a property based on one of your needs (close to work, near family, etc.). Once you’ve identified this, dig deep into the market and figure out its strengths (good for rentals, good for flips, short term rentals, something else?).

None of these things are out of your control, how are YOU going to make a good deal?

@Ethan Piani having that much money at 24 saved up is amazing! Here are some ideas for how to spread your money out and keep you in a strong financial position for future investing:

1. House hack a multi with a low down conventional or FHA loan in MA. Even at a purchase price of $1 million in the Boston metro, that's only like $50k plus closing costs versus using all your money on one deal. The other advantage here is that you're an agent so you can represent yourself and recapture some cash if you buy in Massachusetts.

2. Continue crushing it as a rental agent and saving up. If you aspire to be a landlord, you're going to know the ins and outs from understanding this perspective. Plus making $130k consistently makes you very lendable from that perspective compared to trying something new (trust me, I've been in that boat).

3. Talk to people and research the strategies you're interested in. You might find that multi is a better fit for you, but you might find that flipping is more conducive to your skillset/goals. I wouldn't put the remainder of your cash out until you have a concrete direction to go-- you'll be gaining a lot of experience as a landlord house hacking. These will be great data points to inform your strategy.

Good luck!