Podcast Summary
Leveraging Strategies and Resources for Real Estate Investing in Expensive Areas: Education, networking, DealMachine, and Rent to Retirement are valuable resources for successful real estate investing in expensive areas. Stay persistent and creative to uncover profitable opportunities.
Real estate investing is possible in expensive areas, and even in seemingly unfavorable circumstances, with the right strategies and resources. Sean Reilly, a guest on the Bigger Pockets podcast, shared his experiences as a buy and hold investor who became a house flipper and purchased properties at long distance. He offered insights on getting started, including the importance of education and networking. The hosts also discussed tools like DealMachine for accessing contact information and Rent to Retirement for no money down investment opportunities. The episode showcased the potential for profit in unexpected places, encouraging listeners to stay persistent and creative in their real estate endeavors.
Access to reliable lead information for real estate investors: DealMachine provides investors with unlimited access to accurate and compliant contact details for lead generation and deal making
DealMachine offers investors unlimited access to high-quality, reliable contact information and phone numbers for lead generation and deal making, all fully compliant with the federal do not call list. Sean, a real estate investor, shared his journey from buy and hold to fix and flips, and then out of state rentals. He began his real estate investing career by buying a condo in Boston and turning it into a rental property when the market shifted. After that, he was inspired to explore more opportunities and expand his portfolio. DealMachine's comprehensive data and filters can help investors like Sean make informed decisions and streamline their lead management process.
Considering Condos for Real Estate Investment: Condos offer potential rental income and reduced maintenance, but careful research is necessary to ensure a positive investment experience due to varying association management and unexpected costs.
Condos can be a cost-effective option for real estate investment, offering potential rental income and reduced maintenance responsibilities. However, it's crucial to carefully consider the condo association and its management before investing. Personal experiences can vary greatly, with some associations being well-run and others leading to power struggles and unexpected costs. For instance, the absence of building-wide insurance coverage can pose significant risks in certain areas, such as earthquake-prone regions. Overall, condos can be a smart choice for those starting out in real estate investing, as they allow for easier self-management and less exterior maintenance responsibilities. But, thorough research and due diligence are essential to ensure a positive investment experience.
Real Estate Investing: Condos vs Houses: Thorough research, financial preparation, and adaptability are crucial in real estate investing. Unexpected assessments and risk tolerance are factors to consider before investing in condos.
Investing in condos can have both benefits and drawbacks. The speaker shared his experience of buying and holding a few condo units, some of which did not yield the desired returns. He mentioned the frustration of unexpected assessments and the importance of considering one's risk tolerance before investing. After a holding pattern, the speaker transitioned into flipping houses, finding success by putting out numerous offers until he secured a property. His first attempt at wholesaling was thwarted when the buyer's lender backed out, leading him to consider other options. Overall, the speaker's story underscores the importance of thorough research, financial preparation, and adaptability in real estate investing.
Unexpected real estate opportunities and quick decision-making: Being adaptable, resourceful, and willing to take calculated risks can lead to successful real estate investments.
Sometimes, in real estate investing, opportunities may present themselves in unexpected ways and require quick decision-making. The speaker shares an experience where he had to act fast to secure a deal, despite financial challenges, and ultimately closed on a property that turned out to be a great find. He also used a 0% interest credit card offer to finance the purchase, acknowledging the risks but justifying it due to the potential profit. The lesson learned is that being adaptable, resourceful, and willing to take calculated risks can lead to successful investments.
Using Hard Money Loans for Real Estate Investing: Hard money loans offer investors lower transaction fees, avoid default risk, and are useful for out-of-area deals or challenging wholesaling situations.
Hard money loans can be a useful tool for real estate investors, especially when dealing with out-of-area properties or when facing challenges in wholesaling. Hard money loans typically come with lower transaction fees compared to high-interest loans and closing costs. By opting for hard money loans, investors can avoid the risk of losing their property if they default, unlike with traditional loans. The speaker shared a personal experience where he used a hard money loan to flip a property after facing challenges in wholesaling it. He emphasized that wholesalers and flippers have different roles, with wholesalers focusing on marketing and generating leads, while flippers handle the rehabbing process. The speaker also mentioned that his struggle with wholesaling came from the volume of deals he was able to handle, as flipping requires a larger infrastructure. He concluded by sharing that he has built up a stronger network over the years, enabling him to confidently handle out-of-area deals. In summary, hard money loans offer a viable solution for real estate investors looking to expand their business and tackle challenges in wholesaling or flipping properties.
Adapting to a changing market: Successful real estate investing requires persistence and adaptability. When opportunities in one area dry up, try new methods like direct marketing to motivated sellers and refining your strategy.
Successful real estate investing involves persistence and adaptability. The speaker, who had previously focused on bank-owned properties through the MLS, found that opportunities in this area have dried up. In response, they have started direct marketing to motivated sellers, primarily using direct mail. They have also tried other methods like posting on Craigslist and using signs on their car. Although they haven't closed a deal yet, they are actively working on it and have found success in compiling a list of out-of-state absentee owners for free from the MLS. The speaker's wife has been supportive of their efforts, and they plan to continue refining their strategy as they learn more about the process. Overall, the speaker's experience highlights the importance of being open to new strategies and persisting in the face of challenges.
Benefits of having a real estate license for investors: Investors can save time and expedite the process by having a real estate license, but agents provide valuable expertise and network for faster sales and higher prices.
Having a real estate license can be beneficial for investors, especially for the MLS access and the ability to put in offers directly without relying on an agent. This can save time and expedite the process, especially when dealing with bank-owned or short sale properties. However, agents often dislike receiving numerous offers with low chances of success, making it more effective for investors to submit offers independently. While some investors argue that agents only list properties on the MLS and don't contribute much to the sale, the speaker shares their personal experience of having better success selling properties through other agents. A good agent can provide valuable expertise and network, leading to faster sales and higher prices.
Effective networking and marketing by real estate agents: Good agents invest in marketing and networking to attract serious buyers, utilizing broker opens and open houses with food as effective draws.
A good real estate agent is an effective networker and investor in marketing. They put in the necessary energy and resources into selling a property, utilizing open houses, broker opens, and networking with other agents to bring potential buyers. The difference between a good agent and a mediocre one lies in their willingness to invest in marketing and their network. Broker opens, where other agents are invited to view the property, are often more valuable than open houses for consumers as they increase the chances of attracting serious buyers. Food at broker opens can also be an effective draw. Overall, a good agent's lead funnel is essential for a successful sale, and their marketing efforts pay off in the long run.
Working with real estate agents for successful sales: Collaborating with agents who tour properties in your niche can lead to successful sales. Be open to various property sizes and conditions, and consider HUD homes for unique opportunities.
Working with real estate agents who tour new properties in their niche can lead to successful sales for sellers. The speaker shared that most of his sales have come from agents who had seen the properties during their tours, making it a valuable aspect of listing with an agent. He also mentioned that he casts a wide net when it comes to flipping properties, looking at various sizes and conditions, and even considering small multifamilies and condos. An interesting anecdote he shared was about a HUD property he bought without seeing it first, expecting a major renovation, but finding it in much better condition than anticipated. This highlights the importance of being open to unexpected opportunities and the unique process of buying HUD homes as an agent. For those unfamiliar, HUD homes are government-owned properties that are listed and sold through the Department of Housing and Urban Development. Interested buyers can find and make offers on these properties through the HUD Home Store website or through a HUD-registered real estate agent like the speaker.
Streamlined Offer Process for HUD Registered Agents: HUD registered agents can submit offers directly, simplifying the process and avoiding the need for coordination through other agents. The process involves a one-page form and is relatively automated, with counter offers common for low bids.
Being a HUD registered agent significantly simplifies the process of making offers on HUD properties. Since your brokerage is registered with HUD, you can easily submit offers directly, without the need to coordinate through other agents. The process involves filling out a simple one-page form and is relatively automated. While it's common to submit low offers, there doesn't seem to be any negative consequences for doing so. Counter offers are typically sent to all bidders, and you may even receive them for particularly low offers. However, it's essential to note that the system can be quite automated, and HUD may send out minimum net offers to all bidders, regardless of their previous offers.
Put in your best offer first in real estate negotiations: Start with your highest offer to avoid missing out on the property, then incrementally increase if needed. Don't rely on counter-offers to update your price.
When making offers on real estate properties, it's important to put in your best and final offer first, and then incrementally increase your offers if necessary. This approach ensures that you don't miss out on the property due to a higher offer from another buyer. Counter-offers in real estate are not like verbal negotiations with agents where you can update the contract on the spot. Instead, you need to submit a new offer if you want to change your price. The seller will keep coming back with lower prices until they accept an offer that nets out to their desired price, taking into account commissions and closing cost credits. By putting in your best offer first and then incrementally increasing it, you can avoid the frustration of having an earlier offer accepted instead of your most recent and highest one. Additionally, investing in a home security system like SimpliSafe can provide peace of mind while you're away from your property. With its high-tech sensors, indoor and outdoor cameras, professional monitoring, and affordable pricing, SimpliSafe is an excellent choice for securing your home and protecting your belongings.
Find peace of mind and passive income in real estate: Explore home security, passive investing, or vacation home management for financial peace of mind and passive income in real estate. Each option comes with unique risks and rewards.
There are various ways to achieve peace of mind and passive income in real estate. SimpliSafe offers security and savings with their home security systems, while Pine Financial Group provides passive income through real estate lending. For those interested in vacation homes, Vacasa offers hassle-free management and increased revenue. Meanwhile, some investors find the cheapest deals in less expensive markets or through tax sales, but these come with added risks and responsibilities. Whether it's through home security, passive investing, or vacation home management, there are options for everyone to simplify their real estate journey and earn financial peace of mind. SimpliSafe provides peace of mind with discounted home security systems at simplisafe.com/pockets. Pine Financial Group offers passive income through real estate lending with a targeted 8% preferred return and senior lien status at pinefinancialgroup.com/bp. Vacasa simplifies vacation home ownership with professional management and increased revenue at vacasa.com/biggerpockets. Locally, the cheapest homes can be found in the 30,000 range in Massachusetts, while the very cheapest was a $2,000 tax sale property in Pennsylvania. The latter came with tenants and additional responsibilities. Overall, the key takeaway is that there are various ways to invest in real estate for peace of mind and passive income, each with its own risks and rewards.
Sharing real estate investing mistakes for learning and growth: Making mistakes is inevitable in real estate investing, but honesty and learning from them builds trust and credibility. Prices in Western Pennsylvania range from $2,000 to $375,000 for fixer-uppers and move-in ready properties, respectively, with rental income from $5.75 to $1,000 per month.
Real estate investing involves making mistakes, and being upfront and honest about them is key to building trust and credibility. The speaker shared his experience of purchasing a property under the wrong assumptions, resulting in a significant location error. He was evaluating a property for rehab or wholesale, but due to a misunderstanding, he believed it was located 40 miles south of Boston when it was actually 90 miles west. Despite this mistake, he learned from it and emphasized the importance of honesty in the industry. The discussion also touched upon the affordability of properties in Western Pennsylvania, with prices ranging from $2,000 to $375,000 for fixer-uppers and move-in ready properties, respectively. The rental income for these properties ranged from $5.75 to $1,000 per month. Overall, the conversation highlighted the importance of thorough research, honesty, and resilience in real estate investing, as well as the potential for finding affordable properties in certain areas.
Lesson learned: Double-check property information: Thoroughly research properties before buying or selling, confirm important details like septic systems, and be prepared for unexpected challenges to ensure a successful transaction.
It's crucial to verify information and properly research a property before making an offer or selling it. The speaker learned this lesson the hard way when they failed to confirm the septic system status of a house they had purchased, leading to unexpected repairs and additional costs. This incident highlights the importance of double-checking information, even if it comes from a trusted source, and being thorough in property inspections. Additionally, the speaker shared an anecdote about buying a house with undesirable features, including a sewer pumping station, train tracks, and being in a potential flood zone, but still managing to renovate and flip it despite the challenges. Overall, the discussion emphasizes the importance of thorough research and due diligence in real estate transactions.
Unexpected Profit from a 'Problem' Property: Despite perceived drawbacks, a property can still be profitable if you do your research and buy at the right price. Every property is unique and requires careful consideration before making an offer.
Even properties with perceived drawbacks, such as being located near a sewer plant or railroad tracks, can still be profitable investments if you do your due diligence and buy at the right price. The speaker in this discussion put in a minimum bid on a house with these issues, expecting it to need extensive work, but found that it was in better condition than expected. By working with what they could without having to spend too much on major upgrades, they were able to resell it for a profit, despite being in a market with similar, but more expensive, properties. The key is to remember that every property is unique and requires careful consideration before making an offer.
Finding Reliable Contractors and Painting Tips for Flipping Houses: To sell a flipped house faster, use neutral colors and find trustworthy contractors through effective communication. Secure a hard money loan to start with no money and consider condos for first-time buyers. Gain insights from books like 'Rich Dad Poor Dad' and business titles for success.
Finding reliable contractors, even handymen, is a challenge in real estate. To avoid getting ripped off, it's essential to find someone trustworthy and communicate effectively. Neutral colors are generally preferred when painting a kitchen in a flip, as they make it easier to sell. Starting with no money can be achieved by finding a good deal and securing a hard money loan. For first-time buyers, condos can be a good starting point due to their ease of management. Rich Dad Poor Dad is a popular real estate book, and non-real estate business books like "Good to Great" and "7 Habits of Highfully Effective People" can provide valuable insights. Prioritizing family is important, even when balancing real estate investing and hobbies.
Persisting through rejection in real estate investing: Successful real estate investors keep making offers despite low hit rate, have a thick skin, and deal with issues to eventually secure profitable deals.
Successful real estate investors are those who persist in the face of rejection and keep putting in offers, even when the hit rate is low. Sean Reilly, a real estate investor featured on BiggerPockets Radio, shared his experience of making hundreds of offers before getting his first successful deal. He emphasized the importance of having a thick skin and the willingness to deal with issues that come up during the buying process. For those interested in real estate investment, Reilly recommended joining the BiggerPockets community to learn and connect with other investors. Overall, his message was one of perseverance and the belief that there are two kinds of real estate investors: those who make a ton of money and those who give up too soon.
Find an investor-friendly agent for real estate success: Navigate neighborhoods, analyze numbers, and make confident decisions with the help of an experienced local agent using BiggerPockets Agent Finder.
If you're looking to get into real estate investing or looking to level up your current investment game, finding an investor-friendly agent is crucial. The market can be unpredictable, but the best investors understand that it's not about timing the market perfectly, but rather being consistently present in it. With the help of an experienced local agent, you can navigate neighborhoods, analyze numbers, and make confident decisions. BiggerPockets Agent Finder is a free resource that can help you instantly match with an agent who fits your investment goals. Remember, investment in real estate or any asset involves risk, so be sure to consult with qualified advisors before making any decisions. To get started on your journey towards financial freedom, visit biggerpockets.com/deals today.