🏘️ Living in a hoarder house got me into RE

📈 Market Snapshot

📰 Headlines

🏛️ $400M NAR settlement: The end of 6% commissions?

This month’s judgment was intended to level the playing field for buyers and temper the US’s reputation for the highest commissions of any country. Rob Hahn makes an awesome argument that banning public commission offers won’t change anything. Agents will negotiate commissions offline and steer sellers away from buyers offering less than 3%.

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☀️ It’s always sunny in… Madison?

State regulars gave the green light to turn 6,500 acres of farmland into a solar plant in Madison County (to put that in context of places you’ve heard of, Madison is 25 miles west of Columbus). The plant will power up to 170k additional homes and be the 2nd largest solar plant in the country.

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🏚️ How living in a hoarder house got me into real estate

I grew up in a hoarder house in North Linden, a neighborhood in Columbus.

At first, it was kind of fun – as a young kid, each room felt like its own Disneyland zone.

Tip-toeing over shoe boxes.

Curling up with my Gameboy behind a fort of Kitchenaid and shake-weight boxes.

…That quickly lost its charm in middle school.

And ended up being a near-diaster when I was 21.

My mom passed away in February of 2020 and real estate sharks immediately locked onto the property.

These people tear through obituaries and scrape the web to interrogate the next of kin.

It was ridiculous… I received calls, emails, and letters - you name it, I got it.

They told me how easy they could make things for me, promising a quick sale for $60,000.

My mom purchased the house for $80,000 in 1997.

I was shocked… real estate was booming and they were telling me the house dropped in value by 25%?

I couldn’t believe it.

But I didn’t really know… I’d never done any real estate.

So I went with my instinct.

F* these guys I thought.

It’s the middle of COVID. No one is in New York. I’m going back to do this myself.

I moved back to Ohio, interviewed a bunch of contractors, and learned everything I could about flips the following 3 months.

I learned so much. Here are 3 lessons I want to share with you that will be helpful regardless of the size of your portfolio.

Spend time in person with a deal

The best deal to be in person for is your first deal. The second best is your next one.

Investor-focused agents and contractors can be amazing partners.

You want to get to know them.

Often, many of their clients are from out-of-state – if you’re in person, it’s easy to stand out and they go to bat for those folks.

During my reno, one of many silly mistakes I made was neglecting to wash the exterior of the house before photo day.

The house looked awful and my agent’s photographer couldn’t reschedule for a week.

Then I get a call from my contractor - he’s sending his son over the same day to pressure wash the entire exterior.

Mario is the man.

The photos turned out great and I narrowly avoided a week of twiddling my thumbs.

Ask “who” not “what” for answers

In business and life, the smartest way to move faster is to stop asking “what” the answer is and instead ask “who”.

If you’re a scrappy person who can quickly get 1:1 time with someone who has the “ideal scene” of what you’re looking for, you will win.

On my first deal, I didn’t know anyone.

So I posted to BiggerPockets daily.

Want to get 20 years of smoke smell and stains out of the walls of a house?

Normal paint may work – but if it doesn’t, you just signed up for a very costly re-paint.

It turns out TCP (super strong chemical) on the walls and a $65 ozone machine will save your butt.

Thanks, Matt (you rock, wherever you are).

The person least attached to the deal always wins

In any negotiation, the side that cares the least wins.

Even if you really do care, you must convince yourself you do not, or you will have zero power.

Jason Bateman calls this sexy indifference.

Me? I wanted to sell so badly.

Renovations are stressful, I was already working 60 hours a week in consulting, and I missed my friends.

And, frankly, NYC is expensive - I needed the money.

Every day I’d run my little Excel numbers on how much I was getting after fees.

I was certainly not indifferent and it was not sexy.

I fell out of contract twice in the middle of winter… the third buyer quickly understood my Achilles heel.

They walked me down from $170,000 to $159,000.

My all-in costs were $125k (theoretically $60k if I sold as-is + $65k reno costs).

A fine deal? Sure.

But that house is worth $215k now.

Oh well, that’s life!

📊 Chart of the Week

If there’s one last frontier for cash-flow properties in 2024, it’s Ohio.

🐤 Tweet-y Tuesday

#1

Ever seen countertops and cabinets for this cheap in Ohio? Scratch n’ dent auctions, folks.

#2

I wish I could have done this with my mom.

It’s a beautiful gesture and is now forever on my wishlist of things to do for my close friends when we get old.