Rental Properties: What It's Like to Land a Real Estate Deal in Today's Fast-Moving Environment (Video)

If you've tried to buy real estate recently, you know you have to move quickly. But you may also be wondering how other investors are dealing with this crazy real estate market. In this episode, you'll hear from a RealWealth investor who's now working for us as an investment counselor. She's seen how the market has changed over the last few years, and knows what it's like to buy investment property in today's market.

Leah Collich started building her portfolio in 2010 when it was a very different market. Demand was low, supply was high, and prices were cheap. In 2017, she became a RealWealth member and expanded her portfolio into five new markets while living overseas. She now owns over a dozen properties in Texas, Florida, Ohio and Alabama. When we invited her to share her experience on an investor panel, we were so impressed that we offered her a job. And she shares some of her inside knowledge in this interview.

If you'd like to talk to Leah or one of our other investment counselors about available investment properties, you can do so for free, as a member. It's also free to join our network by clicking here to join.

Links:

https://www.RealWealthShow.com

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Audio Transcript:

[00:00:00]

[music]

Speaker 1: You're listening to The Real Wealth Show with Kathy Fettke, the real estate investor's resource.

Kathy Fettke: What are experienced investors doing in this crazy wild real estate market? I'm Kathy Fettke and welcome to The Real Wealth Show. Who better to ask than one of RealWealth network's own investment counselors. Leah Collich began investing in real estate in 2010 when it was a very different market. Demand was low, supply was high and prices were cheap.

In 2017, she became a RealWealth member and expanded her portfolio into five new markets while living overseas. She owns a dozen properties in Texas, Florida, Ohio, and Alabama. Several years ago, we invited her to be on an investor panel to share with other RealWealth members what she's doing. We were so impressed that we were lucky enough to be able to hire her as an investment counselor helping others today. She knows a lot about what's going on out there and is going to share it with us here on The Real Wealth Show. Leah, welcome back.

Leah Collich: Thanks for having me. I was just saying, we either need to do this more often or I need to move less. I'm on the Eve of another relocation here very soon. [chuckles]

Kathy: Oh my goodness. That's because your husband is in the military.

Leah: Right. They keep us moving. We were in Boston for a quick bit and now we're headed to Texas which is our home state.

Kathy: Before that in Columbia.

Leah: Right. Bogota, Columbia, before that, California, we've been all over.

Kathy: It sounds like maybe a good time to not be in Columbia. Sounds like a tough time there right now.

Leah: Yes, it's been hard to watch.

Kathy: Thank you for taking this time when you're trying to move. I know you're probably a real pro at it now. Let's just talk about that process. You are a real estate investor. You are an investment counselor at RealWealth and you just tried to buy a house in San Antonio for a primary residence since you're now going to be there. [00:02:00] He's being positioned. What would you call it, transitioned? There's a word for it.

Leah: Assigned.

Kathy: Assigned, yes. He's being assigned to San Antonio for about three years. What was the process like to try to buy your primary residence in San Antonio today?

Leah: I have a lot more practice buying investment properties than primary. I was in a really bad way for a while because I'm so pragmatic about purchases and looking at the numbers and being very logical through things. Unfortunately, the market in San Antonio is like many places in the country, there's no room for that. [chuckles] It was stressful. I think we made offers on six different homes, all above asking all the day they came on the market waving appraisal contingencies. We were one of a dozen offers.

What we eventually started looking at to make it more numerical, we started looking at what is the average annual appreciation? Let's look at every quarter in these areas, homes are going up 4%. You start looking at if we wait until the fall or the winter months when things slow down, if they slow down, if there's fewer buyers in the space, we will probably be at 4%, at least maybe 8% higher prices. We might as well come in strong with those offers now. That's what we did and we got one and feel really good about it. It was counter to so many of the rules that we do when we're buying investment property.

Kathy: It's different when it's your primary but I am curious how do you know how much more to offer over asking price and what to let go of? No contingencies is really scary too.

Leah: I know. I think that is the delicate dance and I think I'm a little bit messed up too because everyone talks about you can bring a California bias into these other [00:04:00] markets and everything looks cheap. You can just throw money that you don't think about. We haven't lived in Texas for over a decade. During that decade, home values have clearly gone up in Texas. We've lived in California, we're living in Boston. We've had some of that influence I think of like how high housing prices can get. I think it was trying to tamper that. It was really just after losing out on a couple of offers that we thought were strong offers to begin with that we just started getting progressively and progressively more aggressive. The irony though is that the house appraised after it.

Kathy: That's amazing in itself because that's been an issue too where people do get the winning bid but then they can't get the appraisal. Did you also do no contingency on inspection or did you--?

Leah: No.

Kathy: No. Oh, good.

Leah: We did do an inspection contingency. That was what's crazy because we gave them an offer that I felt like was incredible and nervous about for a sick to my stomach about how much we'd offered on this home. They came back to the offer with a counteroffer wanting us to adjust our terms even so it said to us that our offer wasn't that much better than the other offers.

Kathy: Wow.

Leah: It was nuts but I'm thrilled to know that we have a landing place on the other end. We'll move right in when we get there.

Kathy: Oh, that's great. I'm glad you get to settle in for a bit. Let's talk about what you're hearing at RealWealth. I know you're talking to investors every day about what they're trying to buy. What are you hearing from them? How hard is trying to close on a property for an investor these days?

Leah: It's competitive. Deals are moving so fast that it's completely opposite than it was when I joined the network back in 2016. When I joined, every team would maybe have 10 or 12 deals available at a time, [00:06:00] you could think about the deals, you could get on a phone call and talk about it. You had time. [chuckles]

Kathy: Time, yes. [chuckles]

Leah: Now, we did a property showcase webinar with our Indianapolis team last week and they featured four or five properties. I heard from the team about a half-hour after the webinar, they had 50 email inquiries and 20 requests for contracts. From our members only.

Kathy: For what five properties?

Leah: Right.

Kathy: Oh, wow.

Leah: It's intense. What I've been telling everybody is you've got to get yourself positioned where you understand what you're looking for, your financing needs to be like, ready to go. Don't put an offer on a property or even talk about putting an offer on a property before you've talked with the lender to make sure that this is even possible for you. It's really just in the preparation.

Then I think also managing expectations, that's been a lot of my conversations is just helping everybody understand that you might need to be a little bit patient. If you have one market that you really want to be in, you can get it. It will happen eventually but you might have to just be the squeaky wheel for a little while to get the deal that meets your criteria.

Kathy: What's the case for new builds? Is it the same? Is there a waitlist for those?

Leah: Some markets do have waitlists for new builds but I think there's still tremendous opportunity with the new builds because you have the ability to get som