Learn this week’s Best Ever guest’s best ever books, real estate deals, ways to give back and biggest mistakes
Best Ever Book – Autobiography of a Yogi
Best Ever Deal Jeremy has Done – Foreclosed 5-plex
“A 5-plex [I purchased] at the foreclosure auction in Snohomish County [in Seattle]. Bought it for $288,000, put $85,000 of renovation and costume into it, and it appraised for $500,000 six months later and cash flows really well.”
Best Ever Way Jeremy Likes to Give Back – Provide Real Estate Advice to Others
“The way I like to give back the most is by giving others my understanding of their needs if they ask me ‘oh you’re in real estate, can you help me figure out where I should refinance or sell my house?’ or ‘can you help me figure out how to buy my first rental?’ [I] talk to other people and share the path that I’ve taken to obtain passive income and see the lights go on in them.”
“Also, [I] give that advice and help without any desire to gain personally from it, just as a desire to help. I find that being very gratifying.”
Biggest Mistake Jeremy Has Made So Far In Real Estate – Taking on Projects that are Too Unique
“For me, [my biggest mistake] was doing a flip project on a home that was too unique. When we went to sell it, there weren’t enough comps to validate the offer and we got stuck having to go back and forth between a couple different buyers. By the time our holding costs had added up, I lost a few thousand dollars. It was a lakefront home. The most beautiful home I had done as a flip, but the only one that lost a little bit of money.”
“I’ll caveat this mistake to say that I would probably do it again if I went back and that mistakes are good opportunities for learning. If you do enough deals, sometimes you’ll have one that doesn’t go ideally, but it can be valuable. You might get something out of it that really does help you, so it becomes a win.”
Related: Jeremy’s Best Ever Advice How a Yogi Finds Seller Financing Deals
Best Ever Book – The Alchemist
Best Ever Deal Nick has Done – First Rental Property
“I had just moved back from New York to the Buffalo area. I was in New York City working as a consultant. I moved back to the Buffalo area and the natural thing to do was I moved back in with my parents. Within a month, I was like ‘alright, we’ve got to figure something out here.’ I had to move out.”
“My business partner was in a similar situation as well. We said ‘well why don’t we do the house hacking idea? Why don’t we buy a duplex, live in it, and that’ll get us out of our parent’s houses?’ So we actually found a 3-unit, financed it personally [using] a FHA loan, lived in the middle of the three units – middle being the median, not the highest rent and not the lowest rent [unit].”
“The reason I’ll call it my best deal because financially it does fine, but it unveiled to me how much I wanted to do rental properties. Without buying that deal, maybe I would have bought one later. But that turned the light on in my head that it doesn’t just have to be flipping. This rental think can be cool too.”
Best Ever Way Nick Likes to Give Back – Volunteering at a Non-Profit
“I like to take whatever I’ve learned, as far as operations and strategy, and try to be part of some non-profit. Right now, I’m part of something called Sled Hockey Foundation. I’m working with them as they’re getting up and [helping] on the operations of their business – how to set up some of their social media, how to plan events, and how to get the word out about this new foundation. That’s been pretty rewarding for me so far.”
Biggest Mistake Nick Has Made So Far In Real Estate – Ignoring the Little Things
“I can say I made this [mistake] on a few [deals]: ignoring the little things about the property, the qualitative features of the property that certainly impact the value. What I mean by that is having a cloud over your head when you’re doing the analysis that the numbers are working and ignoring things that should matter to you. These can be little things like what’s the parking situation like or what’s next door.”
“I had a struggle with this early in my career. The numbers looked great, the comps looked great, but I ignored the fact that my comp is not as good as I though it was because my property is fill in the blank – doesn’t have a driveway, is one and a half vs. two stories, etc. I ignored those things. While I was a really quantitative guy and I remain to be, I’ve learned pretty quickly that you have to look at some of those qualitative features of your houses and buildings.”
Related: Nick’s Best Ever Advice How to Get an Income Approach Appraisal for a Residential Property
Best Ever Book – The Go Giver
Best Ever Deal Curt has Done – 2500% Profit on Hoarder Rental Flip
“I bought a nice 4-bedroom, cedar home, 2.4 acres in the city limits. I had it rented for 13 years. Now, [I’m] doing a rehab. One of the tenants left us a hoarder’s mess. It was a junkyard in the yard. The house was full of literally everything! I have 100 hours cleaning out the basement alone. But we’re cleaning it up, remodeling it, doing a short plat to add 3 additional units. When that’s complete, I should realize about 25 times the investment originally.”
Biggest Mistake Curt Has Made So Far In Real Estate – Investing Out-of-State without Proper Due Diligence
“I bought a house across the country without proper due diligence. I live in Olympia, Washington, just south of Seattle. I bought this [property] in central Florida on the word of a well-intentioned friend. True rents were 25% below expectation. Our property management structure fell through. Of course, the market crashed. I currently have it on the market. It will probably sell for 75% of what I bought it for and I will be happy it’s gone.”
“The lesson is [to] do your own due diligence. Don’t take the word of somebody else.”
Best Ever Book – Rich Dad, Poor Dad
Best Ever Deal Shawn has Done – Huge Profit on a HUD Property
“A property came on HUD one day. It was listed at $110,000. I offered $63,000 and it was accepted. I made one call to a hedge fund and offered it to them for the listed price of $110,000 and they said ‘yes.’ 25 days later, we closed on it. Did a double closing back to back, used their funds to fund the whole thing and walked away with a good check.”
Biggest Mistake Shawn Has Made So Far In Real Estate – Buying an Occupied Property at Auction
“There was a house we bought [for] $22,000. ARV was about $90,000. It was occupied so I wasn’t able to get in [prior to auction]. Those tend to really be bad and this was the worst one ever.”
“It was a little 1,400 square foot house and I think we pulled 120-yards of trash out of there, which was about $4000 because the hoppers and labor to get it somewhat cleaned up. We had several million fleas to deal with. The expenses just went on and on.”
“Wholesale wise, it was probably worth $25,000 and I was into already well over that – closer to $26,000 just to get it cleaned out. I held onto it for a while and couldn’t get rid of it. [I] ended up selling it to a local buyer and ended up eating a $2800 hit just to get rid of it.”
“When I see an asset listed [for auction] as occupied, I try to put in extra cushion, because that’s how they always end up turning out, but that just wasn’t enough cushion. It was a hoarder and it was a horrible, nasty house.”
Did you like this blog post? If so, please feel free to share is using the social media buttons on this page.
I’d also be VERY grateful if you could rate, review, and subscribe to the Best Ever Show on iTunes by clicking this link: http://bit.ly/2m2XyM1
That all helps a lot in ranking the show and would be greatly appreciated. And if you have any comments or questions, leave a comment below. Or comment what is your best ever book, personal growth experience, deal, way to give back, or biggest mistake?
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.