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 DealsÂ
- Loan me $925K Short Term? Â 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
First Time Reading? Â Sign Up Here
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 FinancingÂ
- Railroad Spur (dormant)
- Offering Memorandum
- For details, contact Henry Webb at 901-526-3100
- Price $985,000Â
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:
- You lend $925,000 to the LLC which owns the house.
- The loan pays you 10% interest & 2 points origination ($18,500)
- Your loan is secured by a 1st position mortgage & note
- I personally guarantee repayment with interest, regardless of whether the deal turns a profit
- The $925,000 must wire to the title company 1 day prior to closing, which we anticipate to be October 29.
- 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)
- 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.
