Archive of ‘Building My Legacy’ category

Change is A Comin’!

So I have an announcement!

Some of you who know me know that I started my career in real estate over 10 years ago. It started off as a side-hustle to my full time job, which eventually replaced my full-time job. Cisco getting laid off from his “cushy/secure” job just 3 months before we got married is what motivated us to start seeking additional streams of income outside of our jobs. I was living in NY and I just wrapped up a consulting gig before making the move back to Philly. Granted, he ended up securing a new position within the same company within weeks. But it was just the push we needed to realize that could happen to either of us at any given time and we needed to have more control over our financial destiny.

You know those “flip houses with no money” real estate commercials? Yup, that’s how I got started. Now, I’m not going to go into the details of what I did, or what we learned during that time. Much of what is taught is true, but it’s definitely not as easy as it is portrayed. This was before kids, and Cisco and I were so enthusiastic about building a lifestyle that allowed us some flexibility with our schedules. It was a time in our lives where our mindset shifted and we wanted to create an income that wouldn’t require both of us to be at a job.

So anyhow, to cut a long story somewhat short, we went through lots of real estate training and had lots of mentors, which we are extremely grateful for. After doing a number of deals, I left my job and we got into residential house flipping. Cisco stayed at his job while I focused on earning my income through real estate. Without kids, totally manageable. The big mistake I made was not setting our systems up so that the time required for me to be in the business was minimal. I knew that being “self-employed” according to Robert Kiyosaki’s Rich Dad Poor Dad, was not what I wanted to be. But that’s what I created. I created the marketing for the sellers and buyers. I did cold calls and walk-throughs. I raised the money- meaning, I put the numbers together for everything and met with investors. I created the marketing when the house went up on the market. I mean, everything. There was a point where I did get help using an answering service to screen phone calls, virtual assistant to help with some administrative tasks, and used contractors to do my walk throughs. But I can’t say that even those processes were seamless. So yes, doing that without kids is totally manageable. Doing all that with kids, without systems in place, was exhausting.

So I decided a couple of years ago to take a break from house flipping and focus my efforts on being an agent. There’s only so much I felt I could manage in terms of running my own business and my thinking was that being an agent was less risky and had the potential to also be set up as a business, which I liked. But my heart wasn’t in the actions I needed to take in order to help me become successful as an agent.

A trip to the Philippines last year helped me find meaning in why I have a career in real estate, in the first place. Seeing with my own eyes, what my great grandfather created for his family made me realize that what I truly wanted for myself and my family was bigger than what I was doing or what I already knew. I knew that I personally could not be satisfied by fixing/selling individual houses or being a real estate agent. Going through the streets of Talisay in the Philippines, and seeing that what he created so many years ago are proud landmarks of that town, was inspiring. He probably grew up without mental limits that were imposed by his family, his peers or were self-created, which I’m totally guilty of doing. I realized that I limited myself to being a wholesaler/house flipper/ real estate agent because I thought that doing larger projects were beyond my reach. But that’s not true.

So although I’ll still have my license as an agent, my plan is to re-focus my efforts to eventually do larger development projects. My experience has been in single-family residential houses. I plan to continue doing my own development projects, but I will no longer be working to help investors find properties. Going forward, my intent is to pursue development projects that are meaningful to me, on a scale that is much larger than what I am used to. I have the experience, supportive network, partners and passion to create what I want that will allow me to do that. I have been spending the past year connecting with visionaries who truly care for the development of Philadelphia and surrounding areas and being a part of conversations that matter to me, and it’s really exciting.

I haven’t been chatting much on my blog, so I hope this gives post and the pics below give some insight into why. I’ll be posting updates as I can, but feel free to connect with me on Instagram, Facebook or Twitter- to follow me on my journey!

To Buy or Not to Buy?

So a few people have asked me my thoughts on whether they should rent or buy. Generally speaking, most people come from a mindset that you should own a home as soon as you can vs. renting and paying someone else’s mortgage.

Which is absolutely true, to a degree.

Here’s a fun flowchart that makes deciding a little too easy:
Should I Rent or Buy Flowchart: Business Insider

And a couple of recent articles on the topic:
Should I Rent or Buy a House? Marketwatch

In This Floundering Housing Market, Should You Buy Or Rent? Forbes

So before I start talking about this in more detail, I’ll put this out right now… I’m RENTING! (gasp…shocker!) 😉

There’s a lot of backstory behind that which I’ll save for another post, but long story short- we owned a place in the city, sold it at a loss and rented in Philly. When the time came for our daughter to start school, we had the opportunity to rent a house behind our closest friends. We had to pay minimally more (around $100/month more than what we were paying in Philly) to be in a bigger house, a better school district and behind our closest friends. So we hopped on it.

Now, although we rented our primary residence, we actually did buy/sell houses during the time that we rented. So we didn’t truly waste all of our money paying someone else’s mortgage.

Renting our primary residence has offered us flexibility that was extremely important to us. I’ve always known that I didn’t want our family to come across the need to move (because of school or work), and then have a hard time selling a house. Between my husband’s job, the kids starting school and being a city girl, we weren’t ready to decide on a place where we wanted to “plant our roots.”

Which leads to where we are today- after almost 6 years of renting- we might actually buy our primary residence.

Mind you, I’m being extremely selective on where we buy, knowing that whatever it is- our goal is to plant our money there and have it be a source of income for us. For example, if whatever we buy is worth $350k after all repairs, the plan would be to stay as close to $280k as we can, leaving around 20% in the property that will grow over time, as the mortgage gets paid down and using those funds to rehab/sell.

We’ve decided that whatever we end up buying, we want to:

1)Not pay retail. This means that whatever we buy, we will likely do a lot of work to it, which may include expanding it, allowing us to add value. This also means that if for some reason something happens and we need to sell, paying below retail will give us some room to price our house lower than the market so that it hopefully sells quickly.

Oh and by the way, just because you are offering less than asking price, does not mean you’re getting a deal. I don’t care if the house is an REO, foreclosure, short sale, etc. I won’t give a lesson here on how I calculate the value of a house, but what is considered to add/take away value to a house varies depending on your local market.

2) Buy in an area that is steady or growing, not just one that we can afford and the house fits our needs

3) Buy in an area where renting the house out will allow us to cash flow, giving us an extra source of income and equity line to tap into in order to re-invest.

So why all the criteria? Mostly, it’s the timing of everything. I’m not a financial advisor, but I understand real estate enough to know that buying a house just to buy because it sounds nice and not seeing how that house fits in with my long term financial/life plan is not ideal for me. Additionally, if all these criteria aren’t met but we get a homerun deal for a big house that probably wouldn’t rent out because renting, we are OK with that because we know we would be able to sell it.

I must share, the biggest benefit of buying your primary residence- is not having to pay capital gains tax- which you would have to pay on the sale of an investment property. You can sell your primary residence and avoid tax on no more than $250k in profits on the sale if you’re single, $500k if you’re married.

So how does this apply to you? What if you want the flexibility of renting, but want the benefits that come along with buying? Here are a few ideas:

1) Buy a multi-unit and live in one of the units.

2) Rent where you live and buy a property in an area that cashflows enough to cover the majority or all of your rent payment. For example, if you’re renting a place for $2k/month, consider buying a property that generates at least $2k amount in rent that you’re paying + more for cash flow- ideally $2500

3) If taking advantage of your local real estate market sounds appealing to you, but you feel it would take a bit of time to understand your market in order to make a move, consider partnering with an investor you trust or has been referred to you, who has the real estate experience you lack. And do your homework on them. You can generate extra income using funds you would have used to buy a house and instead, just lend on a project.

Well there you have it. Now hopefully I didn’t get you more confused on whether or not you are ready to buy!

My top 3 tips for buyers in today’s market- SPRING 2017

My top 3 tips for buyers in today’s market- SPRING 2017

In case you’ve been living under a rock, we are in a SELLER’S MARKET! What does this mean for you as a buyer? It means you need to be prepared in order to decide and act quickly. In representing both buyers and sellers in this market, here are some tips I wanted to share that will hopefully get you the house you’ve been looking for.

Buyers:
1) Write down your needs/wants and prioritize that list

There are so many factors that go into buying a house. One obvious one is price. But there are other factors that you may want to consider:

– Is the house in an appreciating area? Is there any nearby development that would make it worth being at the higher end of your budget?

– What is your long term plan? I’m a firm believer in holding off on buying a primary residence unless you have plans on staying there in the long term. Unless of course, you get a slammin’ deal where you’re actually making money on the purchase today vs. paying retail and hoping for appreciation. If you don’t know what your plans are for your primary residence but you are ready to buy or want to take advantage of a growing market, consider purchasing an investment property or putting that money to use in other ways, i.e. partnering or private lending.

2) Don’t feel bad saying no to family and friends. If choosing an agent, make sure that agent has built trust with you and has knowledge of the local market.

Deciding on who will represent you is tough. Once people hear that you are looking to buy, friends and family come out of the woodworks with their recommendations. The agent that represents you should have intimate knowledge of the local area which you are looking to buy, in addition to showing you that the area/house meets your long term goals.

Yes, all agents have access to listings. But school boundaries, rental info, neighborhood demographic, local development, an understanding of blocks/types of houses that are highly desirable are all important factors that an agent should share with you, to ensure that you’re buying a house that meets your long term needs. Having this knowledge takes time and being able to quickly submit an offer on a house is tough if your agent can’t provide you with info you need to make an informed decision.

I also mentioned trust. Once you choose the agent who will represent you and has gained your trust, their job is to make sure they submit strong offers on your behalf. This may mean that you will be submitting an offer higher than asking price. But if your agent is able to provide you with information that supports that, in addition to your own due diligence, then trust that they are working on your behalf and not trying to make you pay more simply because of commission. Have them show you what the difference looks like for yourself, in terms of your monthly payment, and the seller. This should allow you to decide if it’s worth paying more.

3) All parties involved need to move quickly. Choose an agent, a lender and title company that will move quickly and work in your best interests.

As I said, choosing an agent means that trust has been established with him or her in order to expedite your transaction. So using vendors that your agent refers is perfectly normal. However, if anyone drops the ball in terms of timing, this can kill the deal, especially in a seller’s market. Extensions are not guaranteed and if a deadline isn’t met, you can miss out. Once you are under contract, there will be work for you to do. Make sure your agent communicates your deadlines and responsibilities to ensure that you’re moving forward as planned and if at any point you feel that a vendor is not meeting your expectations, have a conversation with them first and decide if it’s worth continuing that relationship before deciding to fire them.

Now go and make some offers! Feel free to give me a shout if you have any questions or if I can help you or someone you know with the homebuying process in any way.

“I’m waiting to finish up some work on the house before I get it listed with an agent.”

philadelphia-housing-market

This is a common response I get from homeowners who really want to sell, but for some reason think that in order to get your house listed with an agent, it needs to be repaired.

Being someone that has bought and sold houses that needed everything, I think that it isn’t worth it to put the time and money in repairs to possibly get incrementally more money. If you’re selling your grandma’s house that hasn’t been updated in decades:

a) Clear the clutter. Get the house cleaned, make the house look its best WITHOUT the repairs, allowing the buyer to see the house for what it is.

b) Get good comps of move-in ready houses that sold in the area, on a similar block, in a similar area, and same school district.

c) Can you expect someone to buy your house and live in it in the condition that it’s in?  If it needs new electric, has super outdated bathrooms and an unusable kitchen, you can’t expect a homeowner to live there- unless they are willing to do the work.  You are likely looking at an investor who will buy it and fix it.  If that’s the case, you not only have to consider the amount of work that it will take to fix your house, but also the costs that the investor will take on, to do the work AND CLEAR A PROFIT. Whether or homeowner or investor buys the house, you need to consider the time/expense they are taking on by buying something that isn’t move in ready.

For example, if brand new rehabbed homes in your area sell for $350,000 and your house needs everything, let’s just say that costs $125k to fix, just for repairs.  You can’t expect anyone to pay $225k for your house just because that’s what a repair estimate is.   You’ll need to consider what will make your property worth while for the buyer.  The homeowner will pay more, because they don’t have to factor in a profit to sell the house like an investor would.  But you still need to consider the costs that either the homeowner or investor would take on.

Lastly, many times I have people come to me with an appraisal, set on thinking that is what they can sell their house for.  Just like there are good real estate agents and bad ones, there are good real estate appraisers and bad ones as well.  I’ve seen appraisals where the subject property was in completely different condition than a property that was included in an appraisal.  I’ve also seen appraisals where the house that was included in the appraisal was something that sold over 6 months ago.  Don’t let an appraisal be the end-all be all deciding factor of what your house should be listed at.  If the area where your house is listed in doesn’t have properties that recently sold (within 3 months, no more than 6 months), then consider what is currently listed for the same price range and go from there.

Do you or someone you know have some hesitations on listing their house because of its condition?  Don’t.  As long as the house is priced right, it should sell.  As someone who has bought and sold houses for both myself and for my clients that needed tons of work, I have a good understanding of what buyers will pay for a place- both homeowners and investors. Before putting in the time and money to make those repairs, reach out to me.  It may be worth it to put a fraction of the time and money to get your house listed and sold!

My house is worth what??!!

If you are looking to sell your house- whether you’re an investor that just put in tons of money and rehabbed a house or someone looking to sell your owner occupied property, please don’t be fooled by numbers on Zillow, or agents who are just looking to get your house listed at whatever price sounds good to you so that you’ll list it with them.

a) Zillow’s information is based on public record and takes an average of houses that sold within a given area, not considering the condition.  A house that has similar square footage, that was just rehabbed and has a finished basement does not compare to a house that has been lived in for 10+ years.  Additionally, location drives the price of a house and we all know that many times values of homes vary from block to block.   A house on a wide tree lined street with parking on both sides, does not compare to a house on a narrow one way street with parking on 1 side.  Think about this. If you were a buyer, would you pay the same price for a house that needs work and on a not so appealing block vs. a house that didn’t need work, was move-in ready and on a street that was easy to find parking? No. So don’t expect to list your house for the same price as a rehabbed house and get it sold.

b)  Yes, there are agents who will tell you that they can sell your house for the price you want to sell it for, with no rhyme or reason for pricing, just to get your listing!  Why?  Because the MLS is a great way to market your property while also marketing for their own business.  Not saying that agents who have lots of listings are only doing it so they can market their own business.  Just saying that there are agents who will say that they can sell your house for the price that you want, without truly understanding how to get the pricing of your house right so that it will sell quickly.

As someone who is selling your house on your behalf, it is an agent’s job to get your house sold quickly and for the best price.  Additionally, not all agents that have had listings that sat on the market before they sold, are bad agents.  There are varying factors that effect the time in which a house can sell.  One of them being its ability to be shown.  If a house is priced right, it will sit longer than expected if it isn’t easily shown or if it doesn’t show well.

There are a multitude of factors that dictate what will make a house sell, so the key is to understand the buyers in your market and what they are looking for. If you’re in a city, looking at homes within .1-.25 mile should give you a good base.

  • when meeting with your agent- (hopefully that’s me!) they should provide this to you- active, settled and pending. If not, ask for it.
  • take a look at how long it took those houses to sell
  • check out the block in which those houses are located
  • consider how your house is different and how much more/less you would pay. Be realistic.  Would you pay $20,000 more for a house that had an extra 1/2 bath?  Probably not.  How about for a garage? Depends where.  Again, be realistic and look at the sale of your home from the buyer’s perspective, comparing your house to what has sold and what’s on the market.

If you’re in the Philadelphia or Main Line area and are looking to sell in the near future, let’s connect. I’d be happy to share info with you that will get your house sold quickly!

 

 

JUST gained possession of a property purchased in 2014… YAY!

So this is a story that needs to be documented as quite possibly the deal from hell. It will probably be quite a long post, but here it is.

Back in 2013, I was referred to someone who wanted to sell her deceased father’s property, she was the Executrix.  The seller claimed that her stepmom may be residing in the property, but she was unsure whether or not she was actually there because she claimed that her stepmom was on drugs.  I did some due diligence to see if there was someone in the property.  I drove by at night, checked on trash day to see if the trash was put out and sent a letter asking to be contacted. Long story short, I purchased a possibly occupied property in an area that I knew was turning around in March 2014.  I obviously would not have taken this risk if the price wasn’t right. I took a leap of faith and trusted my gut that this was something worth pursuing and… did a lot of praying. I found an investor who trusted my intuition on the deal and backed me up by funding the purchase.  I did my due diligence to ensure that if there was someone in the property and they did fight me on gaining possession, that my chances of gaining possession may take long, but were in my favor.

Well… when I purchased the property, my investor and I didn’t think that it would take this long to have the property. And technically, I still don’t.  I need to wait until the occupant is actually out of the property, which could take another 90 days. BUT after 2 years of being in court with someone who swore she had rights to the property even though she made no effort to file a claim against the estate, did not file a will stating that she had rights to the property… basically did nothing for 6 years AND stole electricity from her next door neighbor, we won.  I got to the point where I almost gave up and was going to cut my losses just so I could move on.  I prayed a lot because it was really wearing me down and decided that whatever the outcome was, good or bad, that there was a lesson to be learned and that I would be fine with whatever God had planned for me.  There was so much that I could control and what I couldn’t, I left in His hands.  I’m so thankful and humbled because it took a lot of work, patience and trust. It was quite the roller coaster of emotions which I’ll detail in another post, but l’m so thankful we can finally move on from this!

First deal as an agent in the books!

It only took 6 months (I’m being sarcastic!) but I closed my first deal as an agent.  I received the referral from a good friend of mine. I was hesitant to take on the listing because the 2 properties next door were boarded up and vacant.  Just a few tips for anyone looking to rehab:

  •  If you’re working on your first rehab, don’t be a pioneer in an iffy neighborhood.  Ideally, if you’re going to be the first rehab to hopefully turn around a neighborhood,  make sure there are similar sold properties in the IMMEDIATE neighborhood first.  The definition of immediate neighborhood can vary from place to place.  It’s up to you to understand where neighborhoods cut off to ensure you have the right comparables in order to price your property correctly, right out the gate.
  • For something you plan to flip in the short term, don’t buy next to a vacant property OR if you plan to buy next to a vacant property, lower your anticipated sales price to entice your buyer.  If there are 2 completely renovated properties on the market priced exactly the same and one is next to a vacant boarded up property, would you make an offer on the one next to a vacant house? Probably not. BUT if that same house was $20,000 cheaper, do you think you would consider taking that risk for $20,000 less?  Maybe, maybe not.  But at least now you are making your property stand out by being priced lower.
  • Rehab your property with the end buyer in mind.  High end finishes can sometimes be a waste of money, when it isn’t necessary for a particular market.  Again, this is about understanding what has sold in your immediate market.  If other properties are/are not doing things to their rehabs, keep the money in your pocket and deliver a product that is similar to what’s available, but stands out as well.

Happy rehabbing!

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