Are you interested in passive income? If your answer is “yes,” then you and Karen already have something in common.
Although Karen has worked in and around real estate for years, she recently started her investing career. There is something she loves about finding a property and turning it into a home someone will love.
With an entrepreneurial spirit, Karen is no stranger to hard work. Whether it’s at a training or through experience, she takes what she learns to every next deal. And since she’s done 5 investment property deals in ONE year, she’s learned a lot!
Here’s one of Karen’s hot tips: As an investor, consider getting a real estate license. It will literally put money back in your pocket every time you do a deal!
Listen to our conversation with Karen to find out exactly what kind of rehab she is willing to do and to learn about the “easy slam dunk deal” she found on MyHouseDeals plus…
MyHouseDeals.com Success Stories
- How to avoid draw fees when using hard money loans
- What you should look for in your first deal
- A unique tip for finding contractors
NOTE: Since Karen is a Premium Elite member, she received a FULL refund of her up-front membership fee for simply doing a deal! Find out more about our Premium Elite membership here
Tell Me About Yourself…
How did you get into real estate investing?
I decided to get my license in real estate investing in 2008. I was looking at different industries and this was something that I wanted to try out. I really liked the idea of taking something from the needing help stage and perfecting it. I’m an entrepreneur. Always have been one. I love taking a look at something, like a diamond in the rough. I want to shine it up, polish it, and make it happen. I’m just a very driven person and I wanted to excel. I wanted to get multiple streams of income.
Everything just fell into place. I started getting educated on what I needed to do and finding hard money lenders. Now, I’m a full-time real estate agent. I formed my business last year and started doing research on many different real estate groups. I did a lot of Google education to learn the necessary information for my business. Then, I found out about MyHouseDeals and decided to sign up.
How did you build up your real estate investing education before you did your first deal?
I just went for a 3-day seminar to find out about a real estate investing program. I believe I’m savvy enough to gather my own information via websites, different free seminars, etc. I did pay for this 3-day seminar since it discussed important information on the business like how to form your LLC. I also come from 32 years of mortgage banking. So, I already knew quite a bit about real estate when I started out.
Tell Us About the Deal…
What were you looking for when you found this Dallas investment property deal?
Honestly, I was just looking for a good deal. I didn’t want to start with an expensive property, like something for $200,000. I just wanted to see how my first deal would go and was looking for a property around $100,000.
What I then looked for was strictly cosmetic repairs. I didn’t want to do anything with the roofing, foundation, plumbing, etc. I wanted to go in there and do things like redoing the countertops, changing out light fixtures, adding flooring like carpet or tile, etc. I needed an easy thing that I could turn really quickly.
For my first deal, all I had to do was change up a faucet, put carpet in the secondary rooms, change the ceiling fans out, and get some new appliances. It was an easy slam dunk deal. It was on the market for only 8 days and it closed within 30 or 35 days.
How did you find contractors to do the repairs for this deal?
Since I’m a real estate agent I already knew some contractors. I’ve been a licensed agent since 2008 so I’ve accumulated many vendors and contractors.
I tried to go with a team I already knew. I walked the property with my contractors and we made a to-do list together, estimated our costs, and that was our repair bid.
How did you finance this Dallas investment property deal?
I started calling different companies for hard money lending and found a company called Sherman Bridge Lending to finance my first deal. I was going to go with Opportunity Funding because their rates were lower but their process took 21 days. Now, with these deals, you have to go fast. So 21 days was too long. Sherman Bridge, on the other hand, only took 5-10 days. So, I went with Sherman Bridge.
Can you tell us about the draw process with a hard money loan?
With the draw process, you want to make sure that you’re only getting 1 inspection for the property. The inspection fee is normally about $199, so you don’t want the inspector to keep having to go out because that takes out of your draw amount. Also, make sure to request a draw at the very end of the process. It normally takes 3 to 4 days to get the draw money back.
Normally, I pay for all the repairs with my own money and then I take the draw to compensate for those expenses. I would recommend doing that. Use a credit card or something to at least buy the equipment and retain vendors. Sometimes, vendors wait for 2 weeks to get paid and then you can pay them with the money from the draw. It all depends. Everyone’s situation is different. Some people may have the money and others may not.
What do you want your business to look like in 5 years?
I hope to be doing some holds. I’d like to do a flip and then a hold and keep alternating like that, so that I can hold on to at least some properties. Right now, I’m strictly just flipping. I’d like to have a pipeline of homes that I own. My ultimate goal is to have some passive income coming in.
I’d also love to find a property in a great area, right off the freeway or something and start the property as a vacation rental. I’d want it to be nicely furnished and be similar to the experience of going to a hotel, except that you get your own private home with a full kitchen and garage and all. That’s one of my future endeavors.
Give Us Some Advice…
What advice do you have for new investors?
Just do your homework. Ask questions and get a mentor. Let that person be someone who’s already doing this kind of work and then use them as a go-to person for advice. Tap into real estate investing groups. Go to things that are free of charge but also give you significant insight into different ways of investing.
If you really want to get into real estate, consider getting your license. When I list a house, I list it myself. From that, I’m saving myself half of the commission. I’m just paying a buyer’s agent if I don’t procure a buyer. This saves 3% right there. If you don’t have your license, you would have to do both and give up at least 6% of the profit.
Do you have any advice for finding reliable contractors?
I would recommend teaming up with an agent. Most agents have their own partnerships with reliable contractors. So, agents can always refer. My clients even today ask me, “I need help with windows. Who do you recommend?” Team up with an agent. It will be a huge help since they’ve already established strong connections.