All Forum Posts by: Kimberly Kesterke

@Brandon Coleman- I agree with the other investors to do a house hack first- Get an conventional FHA loan at 3.5%, rent out the rooms and after 2 years either 1- refinance and cash out, or 2- keep the original loan and move to the next- you would need to save up 25% of the down payment for the next one since banks will then identify you as an investor (which should be simple because you are living for free) and do it all over again. Over time you will be surprised how much wealth you can accumulate.

If you want a quick way to raise capital to accelerate acquisitions, you can always bird dog or learn to wholesale- but for the 40K you have now, stick with an FHA loan option @ 3.5% down.

No need to speak with the seller directly- since they are already represented by an agent- that agent is legally contracted to represent their seller and help them get the best sales price.  

Good luck, 

@Ryan Gandy- All of my experience is in Augusta even though I live in Atlanta. I like Augusta for these reasons: 

1. Low cost of entry compared to Primary markets (i.e. Atlanta, large cities, etc)

2. Great tenant base- Ft. Gordon, Medical District, Medical College of Georgia, Augusta State University- new data center coming, etc. 

3. Proven market- I've been there for 15 years and have experienced very low vacancies. 

If I were to look at other areas because I do believe its time to diversify- I would look into Chattanooga, TN or Birmingham, AL

@Robert Collins- I've found handymen and contractors a variety of ways: 

1. Posted ads on Craigslist

2. Researched Thumbtack 

3. Reached out on Yelp 

4. Word of mouth 

I'm sure this goes with out saying in any market- not just Augusta. BUYER BEWARE! There are hundreds of guys out there in Augusta advertising as qualified contractors and handymen.... I would say 90% of the people I have worked with have been lazy, cut corners and did sloppy work. Especially if you are investing from out of town, they will look at you as a double sucker. No joke- although there are good people out there- assume 90% of the people you talk to are lying to your face about their capabilities. You have to do an extremely good job screening and interviewing on the front end to find the right people. 

And not to discourage you- obviously you can see I've been burned- pretty severely- And I've still made money and believe Augusta is a great market- I have learned some valuable lessons that I hope can help you as you are starting your journey- 

1. Check 3-5 references. No joke- 1 reference is not enough. You need to qualify more than one reference. 

2. If their prices are too good to be true- then its for good reason. I got sucked into trying to find cheap labor. Just last week I realized that because of that- I ended paying 2 x more than I would have needed to pay had I just hired a quality contractor and paid a fair price. And had been fumbling around like this for a better part of year- Imagine the money I could have saved had I gone with a higher quality person from the start. 

3. Make sure the contractor you use is licensed. Bonded and Insured is a plus, but at least licensed, and that they can show you their paperwork when you ask. 

4. No one person can do it all- If you find a handyman that is good at hanging up blinds- don't ask them to fix a sink or fix a dishwasher- have a deep bench of people who are highly skilled at certain areas. I would actually encourage you to try to find the following: 

1. A person who can fix light plumbing 

2. A different person who specializes in electrical 

3. A carpenter for drywall, roof and exterior repairs 

4.  A painter for painting 

5. An appliance repair person for appliances 

(you get my point) 

5. Do not depend on a "one call thats all" outfit. I have gotten royally burned doing that. 

6. ONLY PAY WITH CC- I have gotten burned paying via cash app- at least with a credit card you can dispute the charge and get your money back if they produce crappy work. 

7. Never pay 50% up front. There are some serious jokers out there asking for 50% up front and have only provided crappy work. 

8. If possible, if you can find a local who can personally inspect the work when it's done, or the tenant can vouch for the work, then do so. I used to rely on photos, but now I require a video via facetime and inspect everything I contracted them out to do. 

9. Write out a detailed scope of work before the project and have them send you a written quote. Before you release ANY payments, go through that scope of work via video chat and make sure it was all done. Photos put you at risk- they can easily take photos of things that look good and take them from far enough away that you can't see the short cuts. 

As a new investor- if you put these processes in place, screen through the crap and find the golden nuggets then you only have to do THIS ONCE! Things will be so much easier for you in the long run. Trust me- there is good money to be made in Augusta but a lot of sharks trying to take a bite out of you when it comes to contractors. I can certainly give you advice on who I WOULDN'T hire- and have found some great people to work with. But I think the biggest learning lesson is finding your own gems out there.  I hope this helps you. 

Kim 

@Jordan Rhoads If you are open to attractive secondary markets- Augusta, GA would be a great place to look. Specifically the Harrisburg neighborhood. I've done several turnkey flips in that area- With $82K you may not even have to refinance with debt-  just recycle the cash you have available. 

Great post. Thank you for sharing. 

Hello Landlords!!

I have a 3 bedroom property that I think would be great to rent by the room- however up until now, I've pretty much gone the traditional routes of renting. I wanted to see if I could collect a few best practices on the following: 

1. Do you provide essentials in the common areas such as furniture, dishes, etc?

2. Do you rent each room separately, or rent to groups? For example, if its a 3 bedroom- do you rent to 3 people who know each other or rent by the room? 

3. Any tips on Utilities? Are you covering the utility bills and rolling them into the rent? Splitting the utilities each month by # of rooms? 

Would love to hear insights from people who are doing this and having success. My instincts tell me I can make the unit more profitable this way, but understand there will be some initial set up costs. 

Talk soon- Kim 

Hey Kevin- go ahead and message me her at BP and I will connect you with someone I've had a good experience with. 

Investment Info:

Condo buy & hold investment.

Purchase price: $18,900
Cash invested: $2,500

I found this property by sending out letters to neighbors of another property I owned. One of the owners was an out of town landlord looking to off-load her property. I used the proceeds from the fix and flip project on Battle Row to pay cash for this property. My goal here is to fix up th e condo and raise the rent to market rates in this area of $750.00/ month.

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

I owned a condo in this same area and was experiencing excellent returns. I wanted to acquire another one in this neighborhood.

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

I found it by sending letters to the owners in the community.

How did you finance this deal?

Cash

How did you add value to the deal?

I raised the rents and made a few repairs.

What was the outcome?

I inherited a stable renter, so this was a win-win for me all the way around.

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

None here. All done on my own.

@Jeff - yes! You can absolutely manage properties well from a distance. You simply have to build a team you can trust. I've been self managing from a 3 hour distance for 15 years. I have found a couple great tradesman for each trade and can call them anytime I need them. It may take some trial and error to find these people, but once you do, the process becomes more autopilot. 

Investment Info:

Single-family residence fix & flip investment in Augusta.

Purchase price: $27,000
Cash invested: $15,000
Sale price: $65,500

This property was acquired through pre-foreclosure marketing. I received a call from the previous owner who had let the home go due to her husband passing. She wanted nothing to do with it, so I offered her $1,000 cash plus buying out the remainder of her loan if she would be willing to sell it to me. She was happy because she didn't want it to go to auction and she got something for it. When I walked into the home after closing, I was in for a surprise. It required a good bit of work to turn it back into a safe and habitable condition. For 2 months I worked with very talented contractors to restore the property's former beauty. I listed it for rent and found a qualified tenant within 7 days. Shortly after that I listed it for sale.

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

I wanted to gain more experience in acquiring off-market deals. I sent out a letter campaign to a list of pre-foreclosures for the October 2019 auction. I connected with the owner of 1950 Battle Row and kept moving the ball forward.

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

I found this deal through a pre-foreclosure letter campaign. I negotiated a wrap loan (subject to) structure. I agreed to pay the owner $1,000 since all she wanted to do was walk away from the property. Her other option was to let it go to auction and have a severe ding to her credit.

How did you finance this deal?

I financed it as a wrap (subject to) deal. I had to reinstate the back charges to the loan which cost around $8,000.

How did you add value to the deal?

I restored the property to a safe and habitable space. I also placed a qualified tenant in the property for a 1 year lease.

What was the outcome?

We sold the property for a bit under the 1% rule- giving the investor a qualified tenant, a renovated property and a little more margin in the deal.

Lessons learned? Challenges?

I had to fire my general contractor the second week into the renovation. This forced me to step in as the GC- needless to say I had to burn through some inexperienced contractors to finally find good ones. In the end, the project came out very nice- and have a ton more experience for the next ones.

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

I am licensed agent and had my broker list the property. Everyone I worked with was extremely professional. I would be happy to recommend any appraisers, agents, and contractors in the Augusta, GA area whom I worked with on the project- just DM me if you want more information.