Real Estate Hackers

Season 2 is on its way. This introduction podcast outlines the different podcast shows that will be released in a weekly format during season 2. Additionally, learn about the new Real Estate Hacker Membership that is being launched today.

Location isn't the only factor making or breaking your property investment. Investors often overlook two critical questions: Who are they dealing with, and who's renting the property?

In this episode of Real Estate Hackers, we look into the real estate situation in Detroit for investors. With a good block, appreciation, and a good team, you can make a lot of money in Detroit — more than you might expect!

Here are some power takeaways from today’s conversation:

Episode Highlights:

[04:54] Investing in Detroit Today

The real estate market in Detroit has drastically increased. Acquiring a move-in-ready B-class property would now cost a little under $100,000. Meanwhile, the rental rates have increased to a minimum of $1,200.

There has been a tremendous amount of growth in Detroit in the last ten years. It's now more than just downtown and it’s continuing to develop.

[10:33] The Impact of COVID on Detroit

The COVID situation in Detroit was an investor’s nightmare. The court system in the city is tenant-friendly, so owners had almost no say about tenants not paying rent at that time. It was even more difficult to get possession of their property back.

On average, it has taken about 4 to 6 months to get a tenant out even without asking for rent payment. Pre-COVID, it only took 60 to 90 days at most to evict tenants.

[16:17] Basics of Leasing in Detroit

Pre-COVID, Detroit property owners used to require 550 credit scores. It increased to 600 and up post-COVID. The background checks have also become more extensive. However, a dilemma surfaced in the newly-enforced law excluding evictions occurring during the pandemic in records.

Be hands-on when selecting tenants. Do interviews, and have a detailed conversation with their previous landlords.

[18:55] Investment Purchases in Detroit

The average house in Detroit now is over $100,000. As long as you can find a decent block, you can acquire a good property. Most investors these days do financing more than cash purchases.

Notable quotes from the Episode:

[10:20] “In terms of the impact of COVID. I know it got a little bit tricky there, evicting tenants through COVID. Some places were greatly impacted. Some weren't impacted too bad. I feel like Detroit was impacted pretty tough, where it was really hard to get tenants out. It feels like that's kind of nearing the end.”

[19:18] “So doubling the average house price in four to five years, that's pretty insane appreciation.”

[23:29] “9-, 10-type cap rates aren't impossible. If you find a good team, and clearly there's some appreciation here, there's people making actually a lot of money in Detroit, which may surprise people.”

Resources Mentioned:

www.facebook.com/tyraa.nicole

www.facebook.com/tyraanicoleproperties

www.facebook.com/Tnpmllc

www.instagram.com/iamtyraanicole/

[email protected]

www.home365.co

[email protected]

Some cities don’t roll off the tongue quite like the popular ones. But it doesn’t mean they don’t hold desirable real estate. Sometimes, you just have to stop and see the bigger picture.

In this episode of Real Estate Hackers, we delve into the state of the real estate market in two cities of Pennsylvania — Pottstown and Reading. With recent developments in these areas, on top of investors’ efforts, these two cities’ real estate trajectories are going nowhere but straight up.

Here are some power takeaways from today’s conversation:

Episode Highlights:

[05:58] Properties in Pottstown

Pre-COVID, properties in Pottstown played around $40,000 for estates needing major rehab to $120,000 for single-family homes. Rents ranged from $1,000 to $1,200.

Post-COVID, properties in Pottstown now range from $100,000 up to $400,000. Rents for single-family homes range from $1,200 to $1,800. Pottstown cash flows well due to a desirable market, which can be attributed to lower rent price and strategic location.

[10:53] Properties in Reading

Single-family type properties in Reading range from $70,000 to $150,000. A two-bedroom can be around $850 to $1,000, while three bedrooms range from $1,000 to $1,400.

Over the last two years, many investors have acquired and redeveloped properties to obtain higher rents. This alone could patch up the relationship between the investors and the city.

[17:15] What’s In Store for Pottstown and Reading

Pottstown is a highly recommended location for property investors. Reading is a good city to buy, but you must look into the good areas and understand their rules.

[21:54] Pennsylvania — a Landlord-Friendly State

Pennsylvania has more easy-to-deal-with landlord-tenant laws. If a tenant stops paying and you’re considered a good landlord, you can easily evict them within 45 to 60 days. Remember that any Pennsylvania City requires a landlord to have a rental license.

Notable quotes from the Episode: (Please choose one)

[02:47] “Reading, Pennsylvania, Pottstown, Pennsylvania. There's a lot of people who have never heard of these cities before. It's not exactly Philadelphia — it doesn't roll off the tongue like that.”

[09:51] “Both of these markets, COVID has helped them. You talked about the equity prices going up, but I think rent prices have gone up to, I would think, at least 10% in the last year and a half and in both of these cities.”

[21:10] “Pennsylvania, in general, is a pretty landlord-friendly state.”

Resources Mentioned:

www.peakassetteam.com

[email protected]

www.home365.co

[email protected]

If you’re like most people, you probably think of real estate as a more stable investment than stocks. But what if there was a way to invest in cities the same way you invest in stocks?

In this episode of Real Estate Hackers, we discuss Nada’s Cityfunds and how they allow you to buy portions of properties in major cities — just like you would shares of a company. Cities are like stocks: sometimes they’re on the rise, and other times they’re not. With Cityfunds, you can invest in cities that can minimize your risks and maximize your profits.

Here are some power takeaways from today’s conversation:

Episode Highlights:

[03:04] What Nada Does

Nada recently branched out to Cityfunds, a fractional home-ownership model where clients can sell a portion of their house. They look for areas on the upward trend and hedge their bets.

[07:55] Liquidity on Cityfunds

If you took out the Cityfund, you could still pay it off and own 100% again. Investors that bought into the fund should remember their investment is spread out. They could be bought out, trade for another city, or cash it out and redeem on a secondary marketplace.

[11:27] Prototypical Homeowner and Investor

Owners and investors should be comfortable with new ideas and technology. They are looking for first-time homeowners between 28 and 38 who want to make home improvements. Since the fees are less, the equity percentage given up is less than home equity loans.

Investors tend to be slightly younger in demographics. Mostly, they get investors who think real estate is a safer bet but can’t buy a whole property. They must be able to put in at least $20,000.

[16:45] Creating a National Cityfund

Nada is working on a DAO which will allow qualified investors to pool their funds and create a national Cityfund. They are leaning towards a particular coin called Algorithm.

[23:47] What the Future Holds

Sundance thinks title companies will face a threat from cryptocurrency. They will have to change their service model and become departments rather than stand-alone businesses.

Notable quotes from the Episode:

[19:02] “[Blockchain is] a transparent system. So you can see exactly where your funds were deployed, what your rate of return is instantaneously because it’s all verified.”

[22:01] “It’s the same function; we’re just trying to find something that’s a little more efficient, and we’re going where our audience is.”

[23:50] “I think that title companies are really going to face a threat from the blockchain, from cryptocurrency.”

Resources Mentioned:

nada.co

republic.com

www.home365.co

[email protected]

Investing in real estate isn’t easy, but with the right tools in your arsenal, it can be much less daunting. One of those tools is a property inspection.

In this episode of Real Estate Hackers, we discuss the importance of inspection data and how it can help increase your property value. By getting a professional evaluation of a property, you can reduce the chances of making an expensive mistake — and that’s something every investor should keep in mind.

Here are some power takeaways from today’s conversation:

Episode Highlights:

[08:49] Data Application

Micro application is where data is collected and connected to transactions after the initial one. By collecting clean, structured data, there will be significant operational savings as it helps automate work. Desktop and hybrid appraisals offer quick due diligence and valuation.

Macro application, on the other hand, is where inspection data aggregated across millions of homes can be used in heuristics to predict future value and rehab costs.

[19:19] Using Inspection Data in the Future

Many touchpoints happen during the life cycle of a property where data needs to be captured. Connecting previous data with future touchpoints can make them more effective.

[26:41] Data and Flipping

Since land is scarce, real estate is the best investment class. So instead of flipping houses, hold onto your property and be creative with your capital.

[31:33] Spotting High Variance in the Data

Be cautious about “weekend warrior work” or work on a property done by the homeowner. If you don’t have the budget to sell and build from scratch, walk away from it. Data can help capture those hidden aspects of a property.

[38:11] Future Developments

Increased institutional interest in short-term rentals will allow more people to get into investing. Transactional and management tools will be more digitized. Expect more rent appreciation and more opportunities within the investing space.

Notable quotes from the Episode:

[13:07] “If your data structure is not perfect, if your pricing is not perfect, and you’re doing it at amazing scale, like highest scale, you can lose a lot of money.”

[15:45] “In a market where velocity is both king and queen, being able to offer a very, very quick turn on both diligence as well as valuation can make or break the deal.”

[35:41] “There’s this tremendous opportunity to inspect homes uniquely, because they’re all heterogeneous, to create a much better output in terms of inspection.”

Resources Mentioned:

[email protected]

www.inspectify.com

www.home365.co

[email protected]

Real estate is all about location. And picking the best location for a real estate investment can be a challenge. With so many factors and locations, you may feel overwhelmed — or worse, you might end up making a mistake that can cost you, and not just financially. If you’re having trouble deciding on a place to invest, you may want to consider Pittsburgh!

In this episode of Real Estate Hackers, we discuss the Pittsburgh real estate market with Gabe Gordon. He shares his thoughts on the flourishing economy of Pittsburgh and why it’s the best place to invest in right now.

Here are some power takeaways from today’s conversation:

Episode Highlights:

[03:58] Why You Should Invest in Pittsburgh

Pittsburgh is a leader in technology, higher education, and healthcare. It’s also considered one of the most livable cities, making it a good place to invest in.

The quality of its higher education institutions and housing affordability are two factors that are fueling Pittsburgh’s growth. Moreover, great effort is put into attracting tech companies.

[13:05] Pittsburgh During the Pandemic

After COVID hit, the suburbs of Pittsburgh saw its share of hardship: many new apartment buildings were stalled out; people started trickling out to the suburbs to get more space; rental rates were also lower before the pandemic. On the other hand, single-family homeowners benefited from the shift to the suburbs.

Currently, people are starting to make a return to multi-family homes, but the suburbs are still seeing a lot of profit from people moving to Pittsburgh.

[16:18] Population and Prices

The population decline is due to the older generation passing away. Thus, a population increase is to be expected in the future. Though it may sound morbid, population decline can add value to properties. Listen to the full episode to find out what price points you can expect!

[22:31] Handling Investors and Investments

Get to know your investor. Learn their goals, risk tolerance, and experiences. Right now, cash is king and investors tend to buy with cash.

Pittsburgh is incredibly resilient and recession-proof. There’s also increased appreciation that beats inflation, and cash flow that produces greater returns. With its stable and growing health, tech, and education sectors, Pittsburgh is an ideal place in which to invest.

Notable quotes from the Episode:

[11:05] “There are some pockets that have not been developed yet. But Pittsburgh is just a growing metropolis of activity all over.”

[23:41] “Everybody’s a little bit different and wants something a little bit different.”

[25:35] “Now, even as interest rates are starting to creep up or have been creeping up, I’m actually starting to see a preference towards cash because people want to get houses purchased, and then they’re going to know what to do with it on the back end.”

Resources Mentioned:

[email protected]

Online Real estate tools and new technology with the Product Manager at Apartments.com Lucas Hall.

From innovating new Reese’s candy ideas to doubling the value of an apartment building in 1.5 years, Ari has quite an eclectic experience and journey to Real Estate Investing. Recently he’s been innovating in Real Estate Partnership structures. Find out what he says is the best way to partner to accelerate your financial independence. Go to http://www.kapelrealestate.com/jv to find out the right Real Estate Investing Approach for you.

Chad holds a webinar with talented women in real estate. They discuss both their experience and tips for both long term investing and short term rehabs. They also touch on being women in a male dominated business.

Chad tells us how his origins in mortgage lending gave him a unique perspective on real estate. We discuss how him and his team pivoted their model including moving from Oakland, California to Austin, Texas. He also gives us lots of great details on how they analyze and structure their metrics to be profitable for both flipping and rentals.