KGCI: Real Estate on Air - How to Spot a Good Deal in Real Estate

Episode Date: January 15, 2025

Hello, everybody, and welcome back to the abundant investor podcast. I'm your host Beth Rooney, and I'm here with Christine today. And today we're going to talk to you about our favorite topic, which is building wealth through real estate. And we're going to talk about how do you spot a good deal? So whether you are a real estate investor, and this is something you're doing outside of your primary home, or you are somebody that's considering you buying your first primary home or maybe trading up, this episode is for you because spotting a good deal is getting more and more difficult as the market gets, you know, heated up. But it's possible.

And what's really important through all of this is having the right mindset. So we're going to talk about all of that today. Absolutely. I can't wait to dive in. This is a topic that I love so much. I think there's so much opportunity in real estate. Like you said, Beth, it's available to anyone that wants to do it through where they're living, which is a really cool way to think about building wealth,

or as you become or build your real estate portfolio. So we have a lot to dive into, and we're going to tackle a lot in a short amount of time today because this is a great way to really hone in on what we talk about all the time building wealth through real estate. Yes, I love it. So, you know, the number one way to spot a good deal, I think, is to be open to look at things that others have looked past, right?

Agreed. So maybe Zig when others zag. So, you know, one thing might be to say, hey, this home has been sitting on the market for a long time, especially if we're in Greater Boston, things are not sitting on the market for a long time. They are coming on, they're getting multiple offers, and they're going off. But occasionally there is something that's been sitting for a while. and it's likely because it needs work or, you know, whatever it may be. So I'll give you an example of something that I did.

My husband and I built a house from the ground out. And the lot that we bought had been on the market for well over a year. And it was something I drove by almost every day. As a matter of fact, I had a client that was going to buy it, but then decided that it was going to be too much work and decided to buy a home that was almost done. And so what was wrong with this lot? Well, it was in a great location, but it had a lot of conservation land on it. So the way you positioned the house on the lot was restricted.

The height of the home was restricted. So you couldn't build a typical sort of colonial with a finished attic, right? And also it had a high water table. So we had to build the lot up, which restricted the height. So we had to, you know, design a cape style home. It's still a two-floor home. And we had to position it a certain way in the lot. And we could only build so much driveway because of the conservation.

All of these things were hurdles, but things you could just get over if you were willing to do the work. Yeah. And I think that, too, you're willing to see the vision that was maybe not the traditional way that most people would think of that. And it's so interesting to hear you tell this because I haven't heard the story before. And I think about that house. And I think I would have never known you were restricted because it was beautiful. That had a big driveway. It didn't seem like it was height restricted to me. Right. So I think these things come up. And a lot of people say, I don't want to deal with that. That sounds hard. It's challenging. And, you know, so they go and buy

that finished house. And that's totally okay if that's what you want. If you want, If you want to make an investment and see the opportunity to build equity, you're going to have to look at things the way that you're talking about and the way that you did in this circumstance. And I think that that is like ultimately the key way that you build wealth through real estate investing is being able to see something, like finding a great deal that other people are going to look past because largely because of fear, because mindset, maybe time is a true constraint and they're not able to. But I think if you're willing, there are opportunities in any type of market. And it's a matter of, you know, thinking around them and talking to people and getting ideas and being open-minded, right? Like you are. It's like a game. Really, I looked at it like a game.

A puzzle. You know what I mean? A puzzle. Figure out this piece of the puzzle, you move on. You figure out the next piece of the puzzle. You unlock the next step, you know? And if you can just have that mindset and take it. one step at a time. Again, it's like building a house. There's a process you go through. You don't

pick out your kitchen first. You might want to, but before that, you have to say, you know, how big is it going to be? And, you know, what color windows do you want and all that other stuff first, you know? So there's a process. And if you, and to avoid getting overwhelmed by it, you just do the step that's in front of you next. It's like a lot of things in life. Totally, totally. And I think, you know, a lot of people would think, oh, building a house from the ground up, that sounds like very overwhelming. But I like how you broke it down and you saw the possibility. I mean, you also probably like we're thinking about this for some time because it was on the market and you have the opportunity to visit it with your clients. So the wheels start turning and then you're realizing no one else is jumping on this. I could build my dream home here and then voila like you did. And it was amazing. Yeah. And it was pretty similar for me. I decided I wanted to buy a house in a beach area on Cape Cod here outside of Boston. And the house I knew was the one we were going to buy was one that sat on the market for almost a year as well. And not every great opportunity, by the way, has to be something that's been sitting around for a while.

And we'll get to some other examples. This house had been abandoned and it was completely overgrown. You drive up. Everything was overgrown. I mean, it might look a little bit scary to some people. And then you go inside and the furnishings are still there. And there were some bizarre things. There was a priest that lived there.

So there was a pew inside of the living room, right? Like it was, and there were a lot of pictures up. And it was a vibe, right? And we could see past that and see that we could turn this into an inviting beach cottage that people would love to come and vacation at, including ourselves. And it had this adjacent cottage, which was adorable. And apparently the priest had created a separate living space over there and put it in an illegal kitchen. And we had neighbors.

Right after we bought it, the neighbors came walking by a couple of them and said, oh, like, I can't believe you bought that. Isn't there mold in there? I said, yes, there is. And we're taking it out. We're going to have that removed. And what do you know? Like, that's exactly what we've done. And I'm so grateful that we were able to see.

see past everything in there. And that's really so much of, it's the vision to be able to see beyond and create a new building, a new, a new home for yourself. And then also it's like the mindset that we can do this. Like you said, it's a puzzle and approaching it in a way that's, you are not going to let yourself fail on something this big. I can tell anyone out here, even if you're like really afraid of this and haven't made a move for 20 years, but I always wanted that vacation house. You are not going to let yourself fail. I just know you're not.

It's mindset and then it's just taking the steps and getting it done and you will get there. And this is possible to almost anyone. Yep, I love it. I love it. You know, I had the really blessing and I was so fortunate that my dad did this. I saw my father do this down the Cape. We bought a house on the Cape that was done and it's really cute. And he had a building in Boston that he made an investment in and kind of turned it around quickly

and came into some money. So he bought a second house in the Cape. And when I tell you, this is the ugliest house in the prettiest street, I'm telling you. It was one room, you know, it was built in the 70s. So one room was like orange and yellow. The next room was red, white and blue. You remember these houses? And it was just, even the style of the house was ugly.

It was just so ugly. And he was like, this house is beautiful. And I remember thinking the same thing because a lot was so cool, like where it was located. And, you know, he rented it to. somebody for a couple of years, sight just as it was. Somebody was willing to live in the orange and yellow and brown and red, white, and blue. Well, he built plans and saved up some money and then renovated the whole thing and put an addition on. And we enjoyed that house down the Cape for 30 years and made such beautiful memories. He ended up selling the other one. And so, yes, it's like it's the

the house that others have maybe disregarded or that, you know, like in your case, that just overgrown, it's a mindset and a vision. And, you know, I think the uglier, the better, you're going to rip it out anyways. You know what I mean? That's right. Exactly. We were talking earlier about the smoke smells. We walked into a property recently that had been smoked in for years and years and years and it just permeated everything. And I'm sure there are people that walked into that house. We had a hard time staying in that house. There were people that walked in and walked out because they could not see beyond, smell beyond the smell. Yeah, exactly. That smell is like money, you know, like I can get rid of this. We know how to do that. Yeah. Yeah. I mean on.

Yeah. I love it. Yeah. So I think, you know, I think that's another point is that there are going to be houses that come on the market that haven't sat for a long time, that are still going to be untouched by a lot of buyers. A lot of buyers will rule them out right away and you might be able to make an offer on a place that comes on the market that hasn't been on for very long for either considerably lower price, you know, put in a considerably lower offer or you might be able to spot something right away that you can snag up before someone else finds that's price to sell on MLS. So investors. find deals on NLF, they'll find deals off of NLS just by putting the word out as well,

but they're like looking for properties. I just want to say, though, that, you know, if you have your eye on the market and you have these searches set up so that you have them coming into your inbox and you're keeping an eye on the market, you're going to find things. They're definitely out there, and they take some grit and they take some, you know, seeing beyond. They're there all the time, though, and they don't. don't have to be something that's been for a very long time.

The other thing, Christine, is, you know, maybe looking out, if you're an investor, especially, because if you're buying your primary home, you're probably going to want to be in a certain community, right? And that, I understand that. But if you are an investor, being open-minded to other markets, especially if, you know, like we're, as I said, we're in Greater Boston, the market here is really, really hot. It's expensive to get started. So why not look outside of your primary market?

And Christine and I offer a service where we coach mostly women on how to get started investing in real estate. And we had a client recently that would just, I was just so impressed. We were able to help her find the right market. We were able to help her find the right agent. And we were able to help her find the right property. And she closed this week. But how she was able to do that was really her mindset. she was a take action and put fear in the backseat kind of approach.

And I really respect that. And I think that's such a big, I mean, like we're talking about all the ways you can spot a good deal, all the places you can find it. But if you spot a good deal and you don't have the gumption to move forward because of fear or because of, you know,

you're just not great at taking action. We've talked about making good decisions on other podcasts and making decisions as opposed to like, you know, falling into analysis paralysis, it doesn't matter. You have that you really have to first start with that mindset. That's right, 100%. And I love what you brought up about looking into other markets because people invests out of state all the time.

And you have so much, I mean, there's endless, endless menu of opportunity in terms of locations. Look to places that you already maybe have a connection to to begin with. Or like you said with this client that we worked with, We pointed her in the direction of some place that we already knew, put her in touch with an agent who really honed in on the specific community where she ended up buying a two family. And it's just so exciting to see. And you can manage, that's a whole other podcast for another time. You can manage real estate out of state.

You don't have to physically be right near it. And there's a lot of ways that make that in need today. I think that the reason this all happened so fast for this client was she was just ready. she's ready and willing to step into the unknown and she'll do it scared and I think a lot of us let that fear hold us back and so we never take the step beyond reading rich dad poor dad and you know the best book for anyone wanting to invest and you know we've read it maybe three times and it's on the night and then never actually go and take the leap taking the leap is where it's at and we have all kinds of tools as well that's right for being able to look at an investment how is it going to cash flow, what is the return on this? Even we can point you in the right direction to tax advisors who can help you. There's so many tax benefits to real estate as well. If you want to look at saving on your overall tax bill, it's a great strategy.

So, yeah. I just have to interrupt you here for a second and just say, you're such a great example of this, because tell our listeners where you're tuning in from this morning. This morning I'm sitting in Syracuse, New York. I am here at where my daughter's in school. We decided to invest in property because we researched the market. We saw a big opportunity to come in here. The average housing price here is about a fifth of what it is at home.

It's risen in the last year since we've purchased. However, it was hovering closer to $200,000, which is incredible compared to the market that we are in, which Beth said is really hot. you know and then now we have a place I'm not staying in it right now but we do because mine are fully rented they're rented midterm so I've got long-term tenants in them we've got a place to stay when we come if we want we've built some community here we've got a place to store some of my daughter's things over the summer in the basement it's great it's really like there's so many pros to it and we've built some community out here in terms of having a property manager that we

trust, having other people, other investors that we know and that's who's Airbnb I'm staying in right now. So yeah, there is just endless possibility and it's really, really exciting. And real estate is helped by 90% of millionaires and multi-millionaires. So I think if you're thinking about getting into this game, it's definitely an interesting one. To me, it's a lot more interesting than just putting money into stocks and bombs, but I really, there's nothing tangible about it actually like houses and I like to think about them and we can offer you know we offer this client we've helped her to find her local team we've helped her to think about how to manage it going forward that's our zone of expertise so we can help you to

the extent that you want to outsource this stuff yeah you know it's it's so exciting and beth you had an example too where you bought another house that you lived in where you saw something come on the market and you said that's for me it's the house on the block that no one you know that needs the most work right and you could you could see the potential and you were willing to live through the construction of it which you know when you talk about it doesn't even sound like it was not wrong yeah no it's it's true and i think you know that talking about spotting up you know a deal and like you say christine once you start looking you're going to get really educated and know when something's a good deal and when you should jump and we've talked to

And we've talked about taking action and being really able to make quick decisions. Well, my husband and I were at a baseball game. It was 4.30 in the afternoon, 4 o'clock, and we saw this pop on. Like we got the alert that this house came on. And we left the baseball game. We came and looked to the house. We made an offer that was good for three hours. And we had the house under agreement by 6.30 that night.

It doesn't always work that way. You know, not every real estate agent is going to be willing to cancel their open houses. We have an open house this weekend and we've already had several agents try to get us to cancel it. And we think we're not, you know, we know we're not going to do that. We're going to host all three open houses and get all the offers in. But occasionally you'll come across a seller who just wants to, yeah, we'll take that and we don't want to deal with it. And it's every situation is different. And we were able to capitalize on that and get it under agreement really, really quickly.

And so I think if they had gone to an open house, we probably. we would have had to pay a lot more for it. And so the opportunity is there. You know, so before you say that's never gonna work, try it. Try it. It just need work, right? And if it doesn't, well then you can make a decision

if you're gonna be part of a multiple offer situation or not, you know? So I, and I give like we, as we had people try it with us, I didn't give them credit. We were very like, you know, polite to them. Thank you very much for, you know, for trying that. But no, thank you. Right. So no, no, you know, no, no big deal.

No big deal. No bad feelings. It's all good. You're just trying different strategies and seeing what's working in. It's not personal. Yeah, exactly. So, you know, I think Christina, I just want to give people a couple of different ways they could work with us to get started just to get educated. So we have a very simple course.

It's $47. It gives you a great video explaining all the different ways you can invest, all the different ways you can finance it. We give you a workbook so you can start to take some notes and start to visualize on how you might want to become an investor. And then we give you a couple of really easy spreadsheets to start being able to do some back of the envelope math on analyzing deals. So that's one option. Another option is we're going to have an investor panel coming up soon. power panel of so we're bringing in experts around how to finance this we're going to have um yeah exactly so we have we have this really great panel set up if you're interested in that

just shoot us a DM and we'll get you an invitation we'll put the link to our course and the notes and then finally if you want to have us coach you if you if you really want that one-on-one like you know help this is where i want to invest this is what i'm thinking this is the market I'm thinking of, we will help you and we'll get you in touch with somebody that's local to that market and and coach you along the way from, you know, visualizing it to celebrating your closing like we were able to do this week with one of our clients. So it's all really fun. We love working with folks on this topic, obviously. Hopefully you can hear the passionate voice for it. We have some great experience that we really, we really like to share. we'll put the links in the show notes and you can always check us out on Instagram or on our website the abundant investor.com. Thanks for tuning in everyone. Thank you.