All Forum Posts by: Shelby Willitts

Investment Info:

Condo buy & hold investment in Cameron Park.

Purchase price: $294,000
Cash invested: $380,000

Completely gutted and remodeled a 1,367 SF condo (2bd/2.5ba) locally. Have made some other improvements within the last couple years like replaced the AC on the roof (18k) and updated and reinforced the balcony off the master (5k). Remodel cost to get it rentable was about 60k. Rents are currently $2350/mo so net cash flow after insurance, taxes and HOA is about 1900.

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

It was listed below market value due to it's condition. Original cabinets/appliances, carpet was gross and smelled, interior walls had issues with holes and things like that. I was looking for a distressed property that I could renovate.

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

Found on MLS. Worked with a local friend who's an agent who helped me negotiate a great deal. It was listed for $320,000. We offered $300k and after inspections we lowered to $294k.

How did you finance this deal?

Used money from my IRA to buy as an all cash deal. I had my retirement invested in the stock market so I pulled that out and put it into a self-directed IRA.

How did you add value to the deal?

I gutted the entire unit and put in all new appliances. Replaced all carpet with a LVT wood and painted the entire place with one color for consistency. The fireplace was also unsafe. We installed an electric fireplace and drywalled above to install a plug for mounting a TV above the new fireplace. I also cleaned up the overgrown yard and replaced a failing deck with a concrete slab for the back patio.

What was the outcome?

The place is gorgeous (IMO) and rents for more than the standard units in the area. I also have very little maintenance to attend to because everything is new. I self manage instead of using a property management company because I get very few renter calls for service/issues.

Lessons learned? Challenges?

I learned that you can over-improve a rental. However, my intention initially was not to own it as a rental. My intention was to flip so I did some nicer improvements to try to entice buyers. I ultimately decided to hold it and rent it which was a good decision for my retirement account. I think the biggest thing I learned was that you should go into a real estate investment with multiple strategies for getting out of it. The reno will always cost more than you budget for.

Quote from @Alex Ficco:

Other than that, I don't really think ‘MLS Access' is some great thing like its cracked up to be. There are a few advantages, but you can comp property just fine using free tools like Zillow or paying for a service like Batch Leads. You can also be set up as a realtors "assistant" to get MLS access for like $25 a month without being licensed. Access to the FORMS to be able to write offers on listed deals is more important to me, but again, good relationship with an agent will get you that for free

I took the classes, but never took the test because I didn't want to be an agent.  The only thing I wanted was access to the MLS where you can see more than you can on places like Zillow (i.e. potential reports the seller may have already had done like pest) so I'd have more info to go on before bugging my agent.  How do you get assistant access?  I've never heard of this.

Quote from @Eliott Elias:

The wholesaler does not represent you, remember that. Do not use their numbers for rehab or ARV. They will ask you to put down non-refundable money to assign the contract to you once you're ready to purchase.

I already had my agent run me comps in the area and I am doing the walk through tomorrow to see if it might exceed what they thought the rehab budget will be. If I like what I see, I will get to the offer steps.  This is good information so I thank you for the time you took to respond.

Quote from @Ke Nan Wang:

You can certainly bring your agent into a wholesale deal if you are so new to this. Just incorporate the agent's compensation into the offer. 

I've dealt with a number of wholesellers in the market. Some are good and some are shady and bad. If you are new to this game and don't know the basic procedures, I'd rather keep a good relationship with my agent and have that person watch my back. 

Keep in mind, usually wholesaler has about 10-30k profit baked in for themselves if you didn't negotiate with them on the price they brought the deal to you. For instance, wholesaler has the property locked in under contract for 100k, wholesaler is flipping it to you for 130k. Your budget is $120k. Then make him a $119k offer and give your agent $1k for all the trouble that person has been through with you and ask your agent to review your contract and guide you through the process. That's assuming your agent is qualified to do it. If not, then maybe talk to a title company and have them walk you through.  

Great advice!  Thank you.  

Thanks for the tip!  The guy on the video walkthrough (their marketing video) said it was in probate so they didn’t have much information at the time. Hoping tomorrow when they have the showing they’ll have that settled. I appreciate the hand holding info! 

Hello BP!

I am not having much luck with my agent and the MLS for purchasing an investment. I think I may have found a good deal from an established wholesaler. I have never done one of these transactions before and I'm hesitant because I don't understand my rights in the process. Can anyone start by explaining the offer process? How do I make an offer without an agent?

Welcome to EDH!

Hi Terry! This is great to hear. Have they been profitable for you?  Are you holding as rentals, are you flipping them?  Maybe let's get together again and catch up on details?

Originally posted by @Jenna Harris:

@Shelby Willitts what did you decide to do? I am considering the same thing but am still looking for any and all guidance. 

I jumped!  I got an account set up with a self-directed company and then we set one up for my husband as well.  I bought a condo last April with my funds and my husband bought a home last June with his.

Originally posted by @Melissa Roybal:

@Shelby Willitts that is very interesting. Honestly, the only reason being that I visited the area recently and started researching STR opportunities. I didn't even think about Cameron Park. That is awesome that your condo is doing so well as a long term rental. I've been investing out of state and am interested in pivoting and investing locally. Are you self managing?

 Yes, I am.  Easy when you live just down the road. ;)