Month: October 2024

People often ask for VIP treatment on our deals. We reply that we don’t play favorites with our buyers and we run a fair process. The truth is, we do favor STRONG buyers over weak buyers. Those strong buyers are the VIPs who win our deals often-even at lower prices.

Here’s today’s agenda:

• For Sale – 24 Real Estate Investor Deals 
• 3 Deal Killers
• Podcast on Property Radar with founder Sean O’Toole
• How to Borrow OR Lend Private Money (Masterclass)
• 3 Steps to VIP Treatment on Diamond Equity Deals

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Today’s Featured Deal For Sale 10 Units + 4 Garage Spaces
Galewood Section of Chicago, 60639

For Sale 6221 W. Wabansia Avenue, Chicago, IL 60639

I’ve owned this building since 2019. During that time, I’ve torn off & replaced the roof with a 20 year membrane, rezoned to legalize the basement units, added HVAC in 9 of 10 units to maximize rent, and updated most of the units.

The average rent per unit is $1,400 and each is 2 Bed 1 Bath. This is desirable because 2 bed units rent quicker & go vacant less often than 1 bedroom units (people form relationships & move quickly thereafter). This building also has separate electric & gas meters leaving only hot & cold water expenses on you, the owner.

• Current Gross Income $150,000
• $500,000 Capex in the Past 4 years
• Garages may be rented at $150/mo per space
• On site laundry, managed by 3rd party
• View the Offering Memorandum
• Price $1,149,000 

Please contact my broker, Jason Marcordes, at 630-842-5557

Kiavi offers Hard Money Loans Starting at 9.64%
Volume Flippers may Obtain $1M+ Lines of Credit
Get $350 Credit on Your First Loan – Begin Here
Sign up Now, even if you’re not ready to borrow & lock in your $350 credit

How to Get VIP Treatment on Diamond Equity Deals

First, let me begin by highlighting that we run a fair process on every deal. We don’t play favorites with any buyers and give everyone an equal shot to present offers on every deal.

To gain VIP status, you simply follow these 3 steps and earn your reputation as a strong buyer:

1. Make the Offer
2. Large EMD
3. Always Close the Deal

Step 1: Make the Offer – ALWAYS make your offer. Sitting a deal out is the 100% guaranteed way to NOT get the deal. We appreciate all offers made, even when they are below (sometimes significantly below) our offer price.

Step 2: Large EMD (earnest money deposit) – We often choose our buyer based on the strength of the offer. In other words, we ask ourselves, “What are the chances that this buyer follows through on their offer & closes the deal as they agreed?”

While our minimum suggested EMD is just $5,000, buyers will sometimes put much more on the contract, such as $25,000 or more. One buyer who really wanted a deal put down $125,000 EMD on a $125,000 purchase price. They won the deal. Large EMD = Strong Offer.

Step 3: Always Close the Deal – We sell a lot of deals to buyers who have performed with us in the past. Close your deal as agreed, and reputation is cemented as a strong buyer.

If you cancel or try to renegotiate a deal, any future offer you make will be viewed with great suspicion. Your reputation will be cemented as a weak buyer who doesn’t follow through.
Strong buyers win deals over weak buyers when their price is higher.
Strong buyers win deals over weak buyers when at equal prices.
Strong buyers even win deals over weak buyers when their price is lower.

Since Jan 1, 2023, we have bought & sold more than $96M in residential real estate. Not a single deal was more than 6 units. And we made a profit on more than 97%. Do enough deals, you’ll take a few losses. The key to success in real estate? Do MANY deals, not just one. Many eggs in the basket. Some will break.

Here’s today’s agenda:

• For Sale – 33 Real Estate Investor Deals 
• Rockefeller’s Strategy applied to Investing
• Podcast on How to Flip Commercial Deals for $1M+ Profits

First Time Reading?  Sign Up Here

Doing a Deal with Diamond Equity

Quick Shout out to Robert Jones for sending over a few deals to review. These didn’t exactly fit the buy box, but I am grateful for the chance to view.

Today’s Featured Deal For Sale 6.71 Acres, just $95,000

For Sale 19 Lots on Mustang Dr. Vineland, NJ 08361

Here is a chance to buy & develop, or simply land bank 6.71 acres. Just across the street there are approximately 17 houses. On the back side is a solar farm-which will make for quiet neighbors.

This project has not been soil tested or entitled for construction, which is why the price is so cheap. If it were approved, the value would likely be 2-3X your purchase price of $95,000. If you buy it and get it approved, you drive the value.

Or, just buy it and sit on for a decade or two. Taxes are cheap enough.

• 19 lots across 6.71 Acres
  • W5 Zoning Allows Single Family
  • No soil test, or survey available
  • Photos here
  • For details, contact Amanda at 215-987-6705
• Price $95,000 

Here’s What I’m Buying:

• Retail Strip or Shopping Center 10,000-250,000 Sq. Ft.
• Industrial or Flex Warehouse 20,000 – 250,000 Sq. Ft.

An ideal property might be a shopping center you notice with many vacant spaces. If you notice a property like this, please refer that location to me by replying to this email.  I’ll hunt down the owner and never stop until they sell to me. If I close the deal, I’m happy to include you in the General Partnership ownership stack with an equity stake.

Kiavi offers Hard Money Loans Starting at 9.64%
Volume Flippers may Obtain $1M+ Lines of Credit
Get $350 Credit on Your First Loan – Begin Here

Sign up Now, even if you’re not ready to borrow & lock in your $350 credit

How to Flip Commercial Property & Profit $1M+

My buddy Sean Katona & I recently recorded an REI Diamonds Show episode on how he has flipped several commercial properties in the past few years netting himself & his investors profits exceeding $1M on each. Listen here

John Rockefeller’s Strategy on Obscene Returns

While Diamond Equity does NOT enjoy the kind of monopoly that John Rockefeller built with Standard Oil (that’s Exxon/Mobil today), we have used his business strategies to build a company that has bought & sold $96,000,000 in real estate since Jan 1, 2023. Since we were founded in 2006, that number is likely 4-5 times that figure.

We’ve been blessed & lucky in the market for sure, but even more importantly-just like Rockefeller-blessed & lucky to have assembled a smart, loyal, & hungry team to create this reality. I suggest listening to The Founder’s Podcast Ep 368 – a review of Rockefeller’s autobiography.

One nuance of the Rockefeller strategy was in buying assets that compounded inside the business. Let me explain. If you earn $182,101 or more per year flipping houses, you’re paying 32% in federal tax alone. So on that next $50K in income, you end up with $34,000. This is a good problem to have-because you’re making good money.

As high-income real estate investors, we have 2 options to compound our money inside of the business the way that Rockefeller did:

1. Long Term Rentals – Long term rentals are likely the best place to start if you’re in the front end of your real estate career. Once you reach a certain amount, maybe 10, maybe 100 depending on what you buy, you realize your rentals are a BUSINESS. A hungry business that requires a team and your attention to continue the compounding effectively.
2. Passive Investments in Syndications – Investing in syndication deals is where you place your money with the operator and allow THEM to be the BUSINESS that compounds your money. I look for syndications which will double my money every 5 years.

Doubling your money every requires a return of 14.4% per year with NO tax paid along the way. This is the tax-efficient mindset toward investing that syndications provide. Double your money in 5 years, if compounded at 14.4%.

If you managed to flip houses and earn 20% return each year, pay tax at 32% (or more), and compound that amount every year for 5 years, you’d end up just short of doubling your money. The math can get complicated, and I won’t waste your time going through it here right now.

The point I’m making here, and the lightbulb moment for me, is that the most efficient investments I can make are into other businesses with great teams, solid business models, and competitive edge in their space which the value will compound over time without getting shaved by taxes until the very end-after it has grown in value. And, at this later date, treated as long term capital gains instead of ordinary income.

Who are Great Operators? Meet Henry Flagler & John Rockefeller

The photo above is an actual Standard Oil Stock certificate I keep in my office, always within sight. I find it inspirational that John Rockefeller & Henry Flagler both signed this certificate. They’re energy is here, with me, as I negotiate deals, conduct my business, and write this email.

Henry Flagler was John Rockefeller’s business partner. He was a few years older and together they built and operated Standard Oil. Once retired, Henry Flagler fell in love with the warm weather in Florida and became the real estate developer responsible for much of East Coast Florida. He even built the Florida East Coast Railroad through the keys, which eventually became The Overseas Highway extending US Rt 1 to Key West. These were HUGE risky projects-but their impact on our country, tremendous!

Henry & John provide an excellent standard for what to expect in Great Operators. They knew the details of their business. They always strive to evolve the business, regardless of how much success they achieved. These are the kind of people I want to be in business with. Either as my business partners, or those with whom I can place my capital. 

Seek quality. Or, if you haven’t yet gotten rich enough, BE quality. Become great. Be a great partner, find great deals. The gates of Heaven will open and pour upon you more opportunity than you can handle. Reading the biographies, or even listening to the Founders Podcast are a great path for anyone seeking to succeed at a higher level in the business of making money.

Oh-and if you’re in Palm Beach, be sure to visit the Flagler Museum. I stumbled upon it by accident a few years ago-and discovered a rich history and source of extravagant inspiration right on the water in one of the toniest real estate markets in the U.S.

Our prayers go up for those affected by the hurricanes over the past few weeks. Even just one hurricane is a disaster, but a 2nd just a few days later in the same areas – Astonishing! A few of my friends and partners have sustained major damage, but thankfully, no loss of life. Sadly, that’s not the case for everyone.

Here’s today’s agenda:

• For Sale – 43 Real Estate Investor Deals 
• Loan me $925K Short Term?  10% int & 2 Points
• How we Flip Houses all over the U.S.
• Hurricanes Created the Booming Florida Real Estate Economy
• Podcast on Industrial Real Estate with Ian Horowitz

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Doing a Deal with Diamond Equity

Quick Shout out to Ken Grant for sending over a 200K sq. ft. Retail Center valued at roughly $16M. If we end up closing this, Ken will be included in the ownership stack for making the referral. Thank you Ken!

For Sale 203 E Trigg Avenue, Memphis, TN 38106

• 30,658 Sq. Ft. on 8.94 Acre Industrial Lot
  • Up to 40″ Ceiling Height
  • Seller may Consider Seller Financing 
  • Railroad Spur (dormant)
  • Offering Memorandum
  • For details, contact Henry Webb at 901-526-3100
• Price $985,000 

Here’s What I’m Buying:

• Retail Strip or Shopping Center 10,000-250,000 Sq. Ft.
• Industrial or Flex Warehouse 20,000 – 250,000 Sq. Ft.

If you find me a deal like this, I’m happy to include you in the General Partnership ownership stack with an equity stake.

Kiavi offers Hard Money Loans Starting at 9.64%
Volume Flippers may Obtain $1M+ Lines of Credit
Get $350 Credit on Your First Loan – Begin Here
Sign up Now, even if you’re not ready to borrow & lock in your $350 credit

Here’s how we Flip Houses all over the U.S.

Here at Diamond Equity, we flip houses all over the U.S. We have a few favorite states, but are equipped to do a deal anywhere through our Virtual Offer system. Here’s how it works:

A seller sends photos using our Virtual Offer app. We evaluate the condition from the photos and obtain comps and market data from Zillow and other paid national real estate information sources. We schedule a zoom call and present the offer face to face.

Once under contract, we hire a local appraiser to confirm our underwriting and a local inspector to professionally inspect the property. Often, we find an agent who has represented rehabbed properties as the listing agent and tap them for any contractor resources need to prepare the house for retail sale.

We fund the deal, manage any repairs, and sell the deal without ever stepping foot into the house or the state where the property is located. This is all done by our National Acquisition Managers working from our Chicago location.

Our ideal profit on a deal like this is $100,000 or more to justify the risk. Our average actual profit on deals like this is currently about $50,000. In unknown markets, we always need to expect more as a margin of safety.

Our National Acquisition Manager is a 20% partner on each deal, bringing none of their own capital and none of their own leads. The average partner split, calculated at 20% is $10,000. They run the deal start to finish. The Acquisition Manager is the captain of the deal-directing, with the help of senior leadership, the negotiation, acquisition, sale prep, and sale.

Right now we rank highly in google for many terms and many locations throughout the U.S. and also generate leads using direct mail. We are looking for a new partner to join the National Team. This person would ideally be located in, or willing to locate to the Chicago region to work from our office, however, for a candidate with similar experience and a track record of closing deals at a distance, we may consider 100% remote work.

If joining our team and working directly with Aaron Lockhart, Vice President, and myself sounds exciting, please email me a resume and a cover letter detailing your deal making experience.

Are You Interested in Lending $925,000 for 6 months at 10% Interest?

We just received a verbal agreement on a $900,000 purchase which will be cleaned out and immediately listed for sale at $1,349,000. This closing will occur in 2 weeks or less. Here’s how it works:

1. You lend $925,000 to the LLC which owns the house.
2. The loan pays you 10% interest & 2 points origination ($18,500)
3. Your loan is secured by a 1st position mortgage & note
4. I personally guarantee repayment with interest, regardless of whether the deal turns a profit
5. The $925,000 must wire to the title company 1 day prior to closing, which we anticipate to be October 29.
6. Because this deal may sell & return capital in less than 3 months, we pay a minimum return based on 90 days. The minimum return will be $41,308.22 calculated as $22,808.23 (10% for 90 days) + $18,500 (2 points)
7. Upon repayment, you’ll send the title company a notarized release and mail us the original note marked “paid”.

If you are interested in discussing this deal further, please reply to my email. If you are interested in lending to us in the future at amounts smaller than this current opportunity, please sign up at www.FundRehabDeals.com

Hurricanes are Responsible for Florida’s Real Estate Booms

Florida real estate has been one of the most “Boom & Bust” real estate markets in the U.S. since air conditioning in homes was invented. One reason for this, in addition to warm Winters & favorable state tax code, is the destruction wrought by the hurricanes.

Hurricanes provide a bust after the storm hits because many choose to Just Sell it as is, rather than rebuild. One of my friends called 3 days after Helene last week and offered me his house for less than his mortgage balance. He just wanted out and combined with the insurance, could sell for less than he owed. I assume many people feel exactly like him right now.

The issue here for me, as a flipper, is that I cannot gauge the demand for the renovated house here-as I expect a large number of houses will hit the market in the next 12 months under the exact same circumstances. Here comes the oversupply for the Florida market.

The demand also weakens as many would-be buyers will hold off for a year or two until the region rebuilds. This is partially because of the fear of further hurricane destruction and partially because many of our favorite restaurants, ice cream stores, and other businesses are not there right now. Hopefully they can rebuild, but many will not. The market is made up of those hunting for bargains-and the offers are lower than they used to be.

See Cape Coral for the numbers. This is the result of this phenomenon 2 years after Hurricane Ian. Not a blow out, but this market tops the lists of softening markets way ahead of most of the U.S.

Now for the Hurricane Boom

Florida is unique in that much of the outdated inventory is destroyed by the Hurricane cycle. Many with insurance simply sell quick and walk away by choice. Those underinsured or uninsured are forced to sell and walk away. More of this distressed activity occurs near water-where values and demand are always strong.

The buyers either rebuild the existing house with higher end finishes-driving up the value OR tear down and rebuild a much higher end house to suit their needs-also driving the value up. Now you end up with $1M+ renovated homes or $3M-$5M new constructions mansions instead. This in turn, drives up desirability for more wealth to become attracted to the neighborhood and pay more for the other existing homes in the area.

This cycle of boom takes a while after each Hurricane, but viewed over a 75 year period, it’s easy to understand how Miami, Ft Lauderdale, & Naples came to be. On the West Coast of Florida near Clearwater & St Pete, the smart money is buying near the water with similar expectations of future growth. I’d say if you’re patient, you’re probably right, but over the next 12-36 months it’s likely going to be a bumpy ride.

Good Morning!

Things have been improving in over the past few weeks because of the aggressive Fed rate cut. We certainly have noticed an increase in demand in our business, selling a dozen of our properties and closing about a dozen more in the past 2 weeks. Pending home sales are a leading indicator of closed deals, which means the recent NAR reported August Pending Home Sales increase is a sign of increased activity for all of us in the residential real estate industry.

Highlights:

• 8 Commercial Real Estate Case Studies (Saul Z)
• 41 Real Estate Investor Deals For Sale
• Private Mortgage Investment Avail Now

First Time Reading?  Sign Up Here

For Sale – Chicago Warehouse 8,800 Sq. Ft.
5522-26 W. Division Street, Chicago, IL 60651

• 8,800 Sq. Ft.
• Interior loading dock
• 12 Foot Clear Height
• Near Move Ready
• Perfect Contractor Space, Storage, Car Repair
• Recent Roof Replacement
• Lease Option Available
• Offered at $650,000 or $8,066/Month (Modified Gross Rent)
• Please call Oscar for access at 312-815-2751

Private Mortgage Investment – Available Now

• You Fund $207,500 @ 10% interest + 2 Points
• 12 Month Term
• Accredited Investor Only
• Must Fund this Week
• For Details, sign up at www.FundRehabDeals.com

Kiavi offers Hard Money Loans Starting at 9.64%
Volume Flippers may Obtain $1M+ Lines of Credit
Get $350 Credit on Your First Loan – Begin Here
Sign up Now, even if you’re not ready to borrow & lock in your $350 credit

Peek Behind the curtain of 8 Commercial Real Estate Deals

A few weeks ago, my past business partner, Saul Z, joined me on the REI Diamonds Show and discussed his evolution into his current $100 Million commercial real estate portfolio.

Saul writes the absolute best weekly Commercial Real Estate newsletter. Each week he shares his experience through detailed case studies and strategies he’s deploying in stabilizing more than 1 million sq. ft. of commercial & industrial space.
If you’re at all interested in commercial real estate investing, I suggest signing up for Saul’s “Commercial Real Estate Matchmaking” email newsletter here. It is 100% free, but infinitely more. He has nothing for sell other than the space he offers for lease. You’ll also find those 8 Commercial Real Estate Case Studies.  Oh yeah, when you sign up you’ll also receive the Pro-Forma excel file he uses to underwrite his deals. Go now & prosper!

Doing a Deal with Diamond Equity

Here’s What I’m Buying:

• Retail Strip or Shopping Center 10,000-250,000 Sq. Ft.
• Industrial or Flex Warehouse 20,000 – 250,000 Sq. Ft.

Here’s How to Passively Invest:

• Earn 2 Points & 10% Interest as a Private Lender on MY Deals.

Here is How I Run My Schedule:

• I only schedule calls for which I am prepared. If you’d like to schedule a call with me, please include the full agenda of what will be discussed in your email. These are calls I handle personally:
  • Accredited Investors who can write a Check for $1M or more and are interested in exclusive partnering on Commercial Real Estate deals.
  • Brokers, Wholesalers, or Owners seeking to sell the type of Commercial assets outlined above. I am the buyer.

Good Morning!

Getting back to work this week as a married man. What a great time we had at the wedding last week. I appreciate everyone who shared their congratulations last week.

Highlights:

• The $600,000 Real Estate Scam
• 43 Real Estate Investor Deals For Sale
• Selling $1.5 Billion of the $2 Billion in Apts (podcast)

First Time Reading?  Sign Up Here

Kiavi offers Hard Money Loans Starting at 9.64%
Volume Flippers may Obtain $1M+ Lines of Credit
Get $350 Credit on Your First Loan – Begin Here
Sign up Now, even if you’re not ready to borrow & lock in your $350 credit

Weekly Wealth of Wisdom
We Nearly Got Scammed for $600,000!

“For wisdom is better than jewels, and all that you may desire cannot compare with her.” -Proverbs 8:11

You might remember my mention of a $600,000 deal we were anticipating funding in Hollywood, Los Angeles, CA 2 weeks ago. It turns out, if it seems too good to be true, it probably is. We were the target of a wire fraud attempt.

Here were the red flags:

1. Unbelievable Deal – Our contract was for $600,000 on a property purchased in 2018 for $1.5M. Scammers will use this setup to suspend your disbelief at the opportunity being presented. A great example of this strategy is when con-man Lustig sold the Eiffel Tower in France – twice!
2. Suspicious LLC Docs – The LLC Docs presented by the con artist had a 2024 notary date, but the property had been held by the LLC since 2018. The dates didn’t match up. Look out for details like this.
3. Fast Deadline to Close – “Seller” was pushing for a 10 day closing. His reason was that he was going to lose a $100,000 EMD (earnest money deposit) on a deal in Mexico. He’s ready to sell this property at a $900k loss to avoid a $100K loss? This didn’t add up.
4. Suspicious ID – The first & last name on his California license were in the wrong locations. Another red flag.

Even before we signed, I was on high alert that this was likely a scam. That original purchase price and the agreed contract price was just too good to be true. We signed the agreement anyway to do our due diligence. We did NOT wire any EMD to the title company. When we sent our local contact, there was a general contractor on site already who confirmed that our “seller” was NOT the owner of the property who hired him. Needless to say, we didn’t move forward and the scammer disappeared.

We found out later that the next few steps in this common real estate scam would have been an email from an account at a very similar domain name to the title company with the wire instructions. For example instead of [email protected], the scammer would use the email [email protected] to send their own wire instructions with their own contact info as the “call to confirm” information.

My own strategy when confirming wiring instructions is the google the name of the title company and see if the phone numbers match. If they don’t, I may take another step and skip trace the number on the wire instructions. These numbers must match somewhere before I call in order for me to send money.

Luckily, we avoided the $600,000 scam and I don’t know what it’s like to lose $600,000. Hopefully we all get a reminder like this to be diligent and NEVER fall victim to a crime like this.

Imagine Selling $1.5 Billion worth of Your Portfolio (podcast)

Dan French was recently on the REI Diamonds Show. He & I discussed his near-perfect timing of the multi-family real estate market before the market collapsed in mid 2022. After assembling a portfolio valued at $2 Billion, he & his partners made the decision to sell the majority beginning in 2019. They completed sales over 2.5 years of $1.5 Billion, leaving a portfolio of $500 Million of the best properties in the best locations. Listen to the story here.

Doing a Deal with Diamond Equity

Here’s What I’m Buying:

• Retail Strip or Shopping Center 10,000-250,000 Sq. Ft.
• Industrial or Flex Warehouse 20,000 – 250,000 Sq. Ft.

Here’s How to Passively Invest:

• Earn 2 Points & 10% Interest as a Private Lender on MY Deals.

Here is How I Run My Schedule:

• I only schedule calls for which I am prepared. If you’d like to schedule a call with me, please include the full agenda of what will be discussed in your email. These are calls I handle personally:
  • Accredited Investors who can write a Check for $1M or more and are interested in exclusive partnering on Commercial Real Estate deals.
  • Brokers, Wholesalers, or Owners seeking to sell the type of Commercial assets outlined above. I am the buyer.