Welcome to Sunland Realty Group’s blog! A Collection of Short Stories since 2013

Investor Story 30: Taiwanese Investor’s Three- Property Portfolio in Dallas

About This Client:

This is a case study of one of my clients from Taiwan. She sold her condo in Taiwan and used funds to invest in properties in the Dallas area. This is how we built her portfolio. During our initial discussion, we understood that her objective was long term. She wanted to build a portfolio that she could pass on to her children when they grew up. She wanted to invest in nice areas but would want to mix some properties for yield purpose. This is what I designed and bought for her.

First Property: Three-bedroom, two-bathroom property in Mesquite

This was her first property. It was a three-bedroom, two-bathroom property in Mesquite. It was a property built in the 1960s, so we needed to inspect the sewer line, and we found there were big roots underneath the house. We decided to remove the tree to avoid these roots becoming a major issue to the foundation. The property was located right across from an elementary school, and it was leased out to a family with four children—they picked the property as all of them could walk to school themselves. This was not the best performing property for her. The house was too small for a family of six people. I actually advised her against this property, but she wanted to buy something cheaper for her first property.

Eventually, we sold the property as there was too much maintenance cost. I also took over the property management and placed another tenant (family of two), which reduced the maintenance cost. The rent was not bad—it was leased out at $1,200 per month, and the cost for the property was $120,000.

Second Property: A townhome in Garland

This client also wanted to diversify property type. I showed her a townhome and a condo, and she purchased a townhome first. This was in an established community in Garland, and I picked this location as it was right between Garland and Richardson. It was very close to the new State Farm Insurance Headquarters, and many residents that lived in this area worked at State Farm. This was one of the emerging areas as East Plano became a major headquarters location for insurance companies. This property is also within five minutes walking distance to these employment centers.

It had an interesting layout with two bedrooms and an extra room as a study. However, as this additional room did not have a closet, it could not be regarded as a bedroom. The tenant did like this additional room and used it as a study. It also had two bathrooms, one in the master bedroom upstairs, and one was converted downstairs inside the laundry room.

This was one of the townhomes that I really liked because it a had small backyard, and the HOA fees were reasonable. The downside was that it was the middle townhome, so it would hear noise from neighbors on either side.

Third property: Four-bedroom, two-bathroom property in Mansfield

To complete her portfolio, I also recommended a better and larger home, and I picked a property for her in the Mansfield area. She bought the property for around $210,000, and leased it out at $1,800 per month to an aviation engineer who recently moved from Seattle. I mentioned that Grand Prairie and Arlington areas are now regarded as a hub for aviation companies with many aviation engineers moving here. I leased out three properties in one month to employees at Lockheed Martin, Raytheon, and Pratt & Whitney.

This was a four-bedroom, two-bathroom, two-dining room property—the second dining room was a versatile room and could be used as a study. It was in a nice area close to an elementary school, middle school, and two high schools (one was designed for gifted students). It was leased out to a teacher working for the Mansfield ISD, and I was able to increase the rent by $100 in the second year. It was originally leased out at $1,800, then increased to $1,900 in the second year.

This was a balanced approach to my client’s portfolio—after the first 12 months, the third property had appreciated the most, followed by the townhome.

The first property, while it looked attractive initially in terms of rental yield, the maintenance cost was much higher than anticipated, and smaller homes appreciate less than larger homes.

Investor Story 31: Building a Portfolio from Foreclosure Properties

This case relates to a syndicate I am managing for my clients. This syndicate has three partners and they are all risk takers. They are all overseas buyers, who confided in me to manage the entire process.

Step 1: Financing Strategy

We obtained a bridge loan facility with a lender for the purpose of investing in foreclosed or neglected properties. These properties would need major renovations and could not be purchased using conventional loans. We obtained a loan that would provide 60% of the purchase cost.

Step 2: First Purchase

This was a condo which we purchased for $38,000. It was a foreclosure property that needed a new HVAC, and we negotiated with the bank for them to pay all outstanding HOA dues. We spent around $7,000 in total to improve the property, and another $3,000 for a new HVAC unit. It was hard work considering this was just a small condo. We leased the property out at $650 per month.

Step 3: Second Purchase

The second purchase was a townhome. It was a three-bedroom townhome. The previous owner went through a divorce and then there was a storm, so he just gave up on the property and let the bank foreclose on it. It was a nice property with a good layout, but it had plumbing issues. The total cost was around $80,000 for this property, and we leased the property out at $1,000 per month initially.

Step 4: Third Purchase

This was another foreclosure property, and we used the same crew. This was a totally different property. We paid $150,000 for the property and spent $20,000 in renovations as we remodeled both bathrooms, added a new fence, and changed all the flooring. This property was leased out at $1,600 per month.

Step 5: Consolidating portfolio and revaluation for refinancing

We completed all the renovations within three months. There were ups and downs as in any renovation, and plumbing was the issue for all three properties. Unexpected weather issues also caused problems as we had very cold weather in Dallas that year with heavy snow that delayed the project by another month.

Fortunately, our team did a good job, and we were able to lease out all the properties very quickly. We achieved above average rent for all three properties. We then asked the lender to refinance our portfolio as valuation had appreciated for all three properties.

Total Loan from Bridge Loan Lender: $156,000

New valuation: $368,000

The loan approved was based on 60% of the valuation, which equated to around $220,000, so the bank agreed to refinance the entire loan from the lender, plus they gave us an additional $65,000 in cash. We used the additional funds as a down payment to buy another property. This is an example how we used a bridge loan to buy neglected properties and then refinance with a conventional loan.

Photos BEFORE Renovation:

Photos AFTER Renovations:

Investor Story 32: Your Tenant Is Already In The Neighborhood

Client Story: Californian Investor

About This Client:

This is an interesting case. This involved a longtime client, a Californian investor who bought a property in the Mira Lagos subdivision. I have been and still am very active in this neighborhood. The property is a four-bedroom home, with a living room, open kitchen, and covered back porch; the kind of property I like and is always popular for investors.

About This Property:

Nothing major was identified during inspection other than some pest control required, which happened several times for this property. Apparently, there were wasps nesting inside the fireplace, and in winter, they would fly out. It was a scary experience as the owners had kids, and in the middle of night, 12 wasps started flying around. The pest control company found a tiny hole in the roof, and the wasps somehow got through the hole and built a nest inside fireplace.

Key Points Learned from This Case:

This is an interesting case that I would like to share with our readers—this is where our cross-selling strategy works very well.

This property received five applications within a weekend, which shows how popular a four-bedroom, single-story property is in this area. It was a difficult decision for my client as there were hardly any difference between the applications.

On the third day, a neighbor contacted me saying that she would like to view the property. She lived just around the corner, and she had lived there for three years. Her children really liked the school. We decided to lease to this family as they had an immediate move-in requirement. She moved into the property two days later, and signed a three-year lease, which allowed her children to stay in the same school all the way to the end of elementary school.

We then allocated the other five prospects to different properties we had in a nearby area, including Grand Prairie, Arlington, and Mansfield, all properties in the Mansfield ISD. Unfortunately, I did not have enough properties to place all these tenants, but I did place three out of five tenants. It was a very successful campaign. Basically, we held one open house on one property and placed three tenants on the same weekend. Cross-selling is a very useful strategy as many tenants are looking for a similar type of property and are willing to pay more in rent in a desired neighborhood.

Investor Story 33: How to Promote Your Property to Interstate Tenants

Client: Virginia Investor

Location: North Fort Worth, attending Northwest ISD

About This Client:

This is a new client who had read my articles online and decided to use me as his realtor, even though his relatives already have realtors in the Dallas area. His relatives’ realtors only knew Plano and Frisco areas, and were unwilling to travel to other locations.

About This Property:

We showed him properties in Mansfield and Arlington, then we found this property in North Fort Worth. This subdivision is called McPherson Ranch which is assigned to the Northwest ISD. This subdivision is very beautiful with lakes in the middle of it.

The lakes really helped the presentation, and when we advertised online, this was an immediate attraction. A lot of families are moving to the Dallas area, so many prospects don’t even have a chance to look at properties in person, and just lease a property online first so that they have a place to stay when they arrive here. In the end, I leased this property out to a family moving from North Carolina. The husband was very handy and knew how to repair many items himself. I asked them why they chose this property so that it will help me to understand what interstate tenants are looking for, and below were their responses:

Key Points Learned from This Case:

  1. Within 30 minutes driving distance to major employment centers: There are numerous new employers moving to the Fort Worth and Keller areas, including aviation, pharmaceuticals, and IT industries. This tenant was able to find a job within two weeks.
  2. Lakes in a community really helps: Even though they don’t really see it from their home, communities with a lake are usually considered as luxury areas in other states. We took several photos of the lake when we advertised the home.
  3. Low crime rate is very important for new families: We used a website called spotcrime.com to show them that this area had minimal crime activities.
  4. Use social media to find interstate tenants: We posted this on Zillow, Trulia, and Nextdoor. Nextdoor was an effective tool to inform people, as a neighbor saw the post, and contacted his relatives about renting the property.

Investor Story 34: Solar Panels Can be Opportunities for Buyers to Negotiate on Price

This is an interesting case study that I would like to share with you. Solar City had been promoting their solar panels very aggressively in Texas during the past few years, and many people were installing solar panels on their rooftops to save energy costs. What most owners do not know is that solar panels are considered liabilities rather than assets when it comes to resale, and properties with solar panels usually have problems in selling because new owners don’t want to take over the lease.

Solar Panel Contract:

This usually has a stringent Termination Clause, and it’s not as easy as just removing the panels and terminating the contract. The new owner will need to assume the lease, which is usually 10 to 15 years long, and if you terminate the lease earlier, you need to pay the penalty.

How Much is the Penalty?

Typically, this means you have to pay for all the outstanding leases if you want to terminate the contract. I have seen a case where the seller just signed the lease with Solar City, and he still had 15 years on the lease remaining. There was a $25,000 penalty if the new owner decided to terminate the lease earlier. The property was only worth around $120,000, so that was a huge amount proportionally.

Properties with Solar Panel Contracts – Examples:

We sold two properties with solar panel contracts. The first property had 11 offers in the first weekend and the seller was very arrogant. He thought he could get a really good price for his property. By the time the solar panel contract was sent to prospective buyers, every buyer backed out. None of the investors wanted to touch the solar panel contract, so the property went back to market three times before my buyer jumped in and offered a price lower than asking price.

Another property was the same. They had 20 showings on the first day, and the seller thought he could sell the property in one day. The property sat on the market for 60 days and every offer was terminated as soon as they saw the solar panel contract. It was a very hot market, where properties were usually sold within three days, but this property took 60 days. I had three buyers interested in buying the property, but all of them backed out.

Pricing Negotiation Strategies on This Type of Property:

  1. Determine how much the termination penalty will be and use that price to negotiate with the seller to basically cover the penalty cost.
  2. Ask the seller to terminate the contract and pay the penalty—this doesn’t work usually as the penalty could be $10,000 to $30,000, so they would usually just negotiate on price reduction. However, these contracts could be flexible, and I had seen cases where the seller reached an agreement with Solar City and agreed to pay less in a penalty.
  3. Assume the lease, charge higher rent to tenants, and provide electricity to tenants. This is a strategy where you keep the solar panel and charge $100 to $150 more per month, and the tenants can use unlimited electricity. It is a selling point to attract tenants.

The biggest issue is what happens when you want to resell the property. Are you going to keep the solar panel contract? You will be facing the same dilemma, but the penalty cost does decrease each month, so if you are selling the property 10 years later, there won’t be much penalty left if you terminate the contract earlier.

Investor Story 35: Buying into a Four-Plex in U.S.

Here is our investor story about owning a four-plex in the U.S. Let’s interview this client about his experience in owning a four-plex in America. Four-plex are buildings that contain four units, usually upstairs and downstairs, and sometimes it can be front and back, or in a row of four townhomes attached to one another.

Question: What prompted you to invest in a four-plex?

Answer: We have never heard of four-plex in Australia, so it was a new concept for us. For Australian investors, it was hard to imagine that you can actually own a whole entire building, as it costs $500,000 to own just a one-bedroom unit in Australia.

Question: What are unique features about your four-plex?

Answer: It has four units, and they are upstairs and downstairs. There are two units upstairs and two downstairs, and there are two two-bedroom units and two one-bedroom units. The layouts are very similar, and there is also a common area where we have two washers and two dryers in the unit for tenants to do their laundry there.

Question: What are the advantages in owning a four-plex?

Answer: Cost sharing. You have one roof for four units, one HVAC system for four units, and one duct system for four units. You have four income sources, so even if one unit is vacant, your occupancy rate is still maintained at 75% and you still get income. You also get some additional income from the laundry.

Question: What are some unexpected issues from owning a four-plex?

Answer: You are owning four properties, so you have four times more chance for maintenance issues. In my four-plex, this equates to eight toilets, four dishwashers, four garbage disposals, and eight shower-heads. In the first year, we had regular requests which was really frustrating as we did not expect so many maintenance issues. However, when I changed my mindset, I understood the probability.

Another issue is tenant selection. If one tenant is a troublemaker, such as making loud noises or if he/she did not take out trash or is causing other nuisances, it would affect the other tenants, and they would move out as a result of a bad neighbor.

I also found it was harder to increase rent, as these units were really small, it was hard to increase rent very much as you could only do so much to improve the property.

Question: What will be the exit strategy for a four-plex

Answer: A four-plex has more limited options compared to duplexes or single-family homes. I own several duplexes, and I could convert them into half-plex and sell them individually, which I could sell to home buyers just like single-family homes.

With four-plex, you could try to apply for a change of zoning and turn them into individual condos to sell, but you will face an issue with financing. If less than 50% of the condos belong to homeowners, then you are not able to get a conventional home loan. Therefore, in most cases, four-plex will be sold to investors, so the best strategy is to improve cash flow and profitability and sell to the next buyer on a higher multiple.

This can be tricky for a four-plex, as it does generate good income, but it only has four units—there is a limitation on how much more you can achieve. It will be a different story if you own a larger complex. Then you can add more washers or dryers to increase laundry income, or you can install solar panels on the roof to generate electricity for power companies.

Another strategy I am considering is if I can convert one-bedroom units into two-bedroom units, which I can then charge more for rent.

Photos:

Investor Story 36: Seven Weird Reasons Why My Client Backed out on the Contract

In Texas, you can have an Option Period—you pay $100 to $300 as an Option Fee, and you get 5 to 14 days of Option Period which allows you to terminate the contract at any time. Here is a quick summary of what I have encountered in my experience over the past three years with the Option Period.

Weird Reason 1: Dog barking next door

Everything went well with this property. It was in McKinney and was a nice property. My client was a cash buyer, so he did not need an appraisal. On the third visit to the property, he went to the back porch, and the neighbors’ dog started barking. It was a tiny Chihuahua, but it was barking very loudly. My client terminated the contract afterwards saying, “I could not enjoy a quiet evening in the backyard.” It was one of my first deals, and I could not imagine I would lose a deal because of a barking dog.

Weird Reason 2: Superstitious parents

This was for a client from Taiwan. She had to buy a property at a certain time based on her daughter’s birth chart. She said, “Everything needs to match perfectly, otherwise my daughter will not find a good husband.” As you know, negotiations can take days, and this property was a condo, so it required an HOA resale certificate, which took 21 days to process. That missed the “fortune date” for closing, so she terminated the contract. I never told the title company and sellers the reason as it was too hard to explain.

Weird Reason 3: Texan cockroaches

I hate bugs. They look scary, and they can also kill real estate deals. Texan cockroaches are big. We went to see a property, and my client made an offer as it was a great property. When we did the inspection, we found cockroaches in the attic. My inspector took a photo of one particularly big roach to show what type of cockroach it was, so that we could ask the seller to schedule pest control. The photo scared the buyer as they had never seen such a big cockroach, and they terminated the contract.

Weird Reason 4: Shape of the willow tree in front yard

I have to say, I don’t like willow trees myself, and they also scare me. For this property, it had a gigantic willow tree in the front. It did look scary at night—it was fine during daytime, but at night it made noises when the wind was blowing, and kids were really scared to see it. They just didn’t like willow trees, even after I told them just to remove the tree.

Weird Reason 5: They worried the property is haunted

Some of my clients were very concerned about older homes, as they worry that previous owners may have died inside the property. For this property, it was an estate sale. I explained to my client what happened. The previous owners had passed away and passed the property down to the heir. My clients became very uneasy and asked me to find out if the property was haunted. There was a website at the time which published a “is your property haunted” rating. Subsequently, too many owners complained about the website and they changed it. Anyway, my clients were just too concerned, so they terminated the contract.

Weird Reason 6: The property had hidden stairs in the back

We saw a property with a very weird layout. It looked normal until you started walking to the kitchen. Inside the pantry, there was a set of stairs going downstairs, which was really strange as we do not have basements in Texas, and it was not a pier and beam structure property. I went downstairs and discovered there was just one room and a toilet down there. The inspector suspected it was an illegal casino, and it was just too strange for my client.

Weird Reason 7: It was scary

We went to a property in Dallas once, and on the MLS, it said, “An old lady will open the door for you, please wait as she is very slow.” The lady opened the door for us after almost 10 minutes, and as she sat on the chair in the living room, she mumbled, “I am dying, I am dying.” To make matters worse, a tree in the backyard collapsed. It was a scary scene, and although it was exactly the type of house my buyer wanted, he decided to back out.

Being a realtor is a pretty tough job. Just when you think you have seen everything, the next lesson is waiting for you the next day. While I was writing this article, my client just terminated a contract because of termite activity in the bathroom.

Investor Story 37: Building a Portfolio for My British Client

About This Client:

This was one of my first British clients. He had subsequently moved to the United States and was a very active client. We built a portfolio of three properties for him in Dallas within 12 months. He sold his properties two years later as he was getting married. It was an interesting case study, and he was a nice guy. I hope I can meet him in person one day, as we just communicated through emails like most of my clients.

Property 1: A duplex in Garland

He was seeking to buy a duplex, so I found one for him in Garland. It was an old duplex—it had cast iron pipe and the area was just okay. However, we did some updates inside the property, and we were able to achieve good rental for the duplex combined. We asked the seller to remove a big tree in the backyard as it was causing pressure to the gas line. This property did not achieve much capital appreciation when we sold it because it needed foundation repairs, but over two years, it did generate good income for my client.

Property 2: A small home in Cedar Hill

This was a nice 1,200-square-foot home, and with a smart layout. It felt much bigger than 1,200 square feet. It had a separate shower area in the master bathroom which was unusual for a property of this size. The kitchen was also a good-sized kitchen, and it even had a formal dining area. It was getting around $1,150 in rent initially, and I sold the property within three days of listing.

We did the following when we prepared for the listing, and this really helped the showing:

  1. We re-surfaced the bathtub. This was a good strategy without changing the whole bathtub as it looked really new and most buyers thought it was a brand-new tub.
  2. We replaced faucets. Buyers were picky about old faucets, so I asked my client to give me a $500 allowance for me to change the faucets. It was a small investment that made a huge impact.
  3. Air duct cleaning: This is something I would recommend to all properties. We cleaned the air ducts and asked the technician to spray with citrus flavor disinfectants, so the property would smell better. We left the invoice on the kitchen countertop so that potential buyers could see it.
  4. Serviced the AC, recharging the Freon to make sure it was cooling efficiently. This was a small cost. We recharged Freon and tuned up the AC, and we left a copy of that receipt and service report on kitchen countertop as well so that everyone could see it. We listed this property on a hot summer week as buyers would pay more attention if it was not cool enough inside the property.

When it comes to listing, remember all the senses—it needed to look good, smell good, and feel good. The above are simple tricks we apply for listing to make sure buyers feel good when they walk into the property.

Property 3: A property in Mesquite

I then bought another property for him in Mesquite. It was a cute property, 1,200 square feet, and it had nice sized rooms. It was already updated, but it was all carpets inside. What I liked about this property was it had a formal dining room, and it had a nice kitchen layout. However, the backyard looked really small, and it was a triangular shaped backyard. After some discussion, we decided it would be a good idea to add a side yard, so we raised a fence on the side so that occupants could have an additional yard.

That was a good decision, and it increased the yard by almost 30%. The first tenant really appreciated the side yard as his kids played soccer there. My client sold the property in the second year, and he replaced the carpet in the living areas with laminate floors, and also updated the kitchen appliances. It was a good investment for him as he sold the property with the lease attached. This tenant renewed the lease and continued to pay $1,290 per month. Total cost for the property was around $135,000.

The only issue we had with this property was an electrical problem. Several switches kept having issues, and in the end, I asked my electrician to replace the panel box to solve the electrical issue.

Investor Story 38: Chinese Investor Uses Financing to Build His Property Portfolio

About This Client:

This was a Chinese investor who was buying five properties through an equity line we helped him arrange. He then leased out all the properties and refinanced them with a local bank. My client is very experienced—he already has properties in other states, and he understands the process very well.

Financing Arrangement:

We arranged a credit facility of $3 million for this client even though the lender only provides this kind of financing to professional investors. He was approved for a $3 million line of credit—he only needed to pay interest when he withdrew funds from this credit facility.

This allowed him to purchase and close properties quickly, and he could use this loan and purchase multiple properties simultaneously. We used a California-based financial institution to arrange funding for him as I have an existing relationship with this lender, and I have used their loan program myself.

First Portfolio:

He utilized this credit facility and purchased three properties in the first month—it was a mix of properties. One was a relatively updated property in Frisco, one was in Garland, and one was in Mesquite. The Frisco one didn’t require much updating, but the Garland and Mesquite ones both required some updates.

The most challenging part was SPEED—time is of essence when you use a bridge loan as the interest rate is much higher than with a conventional loan. You need to make sure you can finish renovations in time and find tenants as soon as possible so that you can refinance the loan.

There were delays with one of the properties. It ended up having an additional month of delay, as contractors were unable to finish everything in time.

Leasing & Second Portfolio:

Remember, this is very much like a HELOC (Home Equity Line of Credit)—you only pay interest on the amount you draw. My client had two options: he could refinance his first portfolio (three properties) or he could wait until his second portfolio was ready. He decided to wait until his second portfolio was ready, as then the bank would consider the whole package as one loan instead of two loans. Banks needed to underwrite a new loan every time he presented more properties to them, even though he was the same borrower.

Therefore, the pressure was on. We were looking for tenants for the first three properties as well as finding three more properties to add to his portfolio simultaneously.

To avoid geographical concentration risk, we picked properties in different areas—Plano, Mansfield, and Arlington were selected as we were very active in those areas, and we already had an existing database of tenants on a waiting list. To speed up the process, we did not pick properties that required a lot updates—these were move-in ready properties, so we were able to place them on the market to find tenants right away.

Final Stage – Refinancing:

Banks could refinance as soon as the leases were signed and security deposits were paid and shown on bank statements. By combining six properties into one loan, the client was able to save substantial loan costs and able to negotiate a better interest rate as the loan amount exceeded $1 million, which would qualify for a better interest rate. Additionally, he was able to save on attorney fees and appraisal fees because of the volume, and he was also able to save more on insurance premiums as well.

 Investor Story 39: My First Five Properties in Dallas – Q&A

I get asked by my clients all the time, how did you start investing, where did you invest, and how is your portfolio going? We expanded our business since we started our real estate business a few years ago, and now we have our own renovation team and property management operation. As a result, we can manage our properties much more efficiently.

We did not come from a wealthy family, and in fact, when we arrived in America, we did not have much with us. What I had was an American dream and determination as I strongly believe this is the Land of Opportunity for me, my family, and especially my kids.

We were renting for two years as I did not have a job and had a small savings. I kept photos of where we used to live. I then decided to apply for my realtor’s license as I could not think of anything else I could do at the time. It was a very stressful time of my life as I had no direction.

Anyway, let’s discuss our own journey into our first five properties in Dallas. My wife and I always had a strong belief that you have to get your feet wet first. As such our first five properties were all properties that had numerous issues, so that we could practice our business model.

First Property: For the first property, we reached an agreement with a hard money lender, and the interest rate was high as we were new immigrants at the time without much credit history.

The first one was a cheap condo I bought. It was in bad shape and was also a very messy transaction as the listing agent was completely clueless and the title company was unwilling to help. This was the first time we renovated a property in America, and it was quite an experience. We replaced all the floors, tiled the kitchen and bathroom areas, and painted the entire condo. It took about three weeks, and we achieved about 12% return in rental yield.

Second Property: The second one was a foreclosed townhouse. It was my second experience in buying a property in Dallas, and I wanted to gain as much experience as possible in renovation. This was a nice townhouse, but it was flooded as the bathroom was upstairs and water was flushing down through the ceiling to downstairs. The plumbing caused some issues, even after we repaired the property, but it turned out to be one of my best investments in three years as I was able to increase the rent every year due to its prime location in Garland.

Third Property: This was an interesting project—I have mentioned this project in another post. It was a property owned by an old lady who had owned it for over 30 years. She painted the entire property in a brown color. I couldn’t stand it. She also used oil-based paint and different paint for the doors and trims. She even painted the kitchen countertop. Why? Why! I was in shock when I first saw the property, and then I saw the listing agent wanted to buy the property herself. I realized there was a great value “behind the colors.” We made an executive decision and bought into this property. The painting took a while as we had to apply three to four coatings, and also need to get rid of the oil paint smell inside the house. Once again, it was a great investment—we increased the rent and the property has been appreciating at 8% per year as well.

Fourth Property: When it came time to look for the fourth property, it was time for a break from all these renovations, so we bought a nice property in Grand Prairie. This was an interesting case, as my client had the property under contract, but she changed her mind and decided to buy another property instead. While she was terminating the contract, I asked her if she would mind if I bought the property. She said it was fine, so we bought this four-bedroom property at around $200,000 and found out this was an excellent area for rental and growth. Since then, this area has become our top selling area to investors.

Fifth Property: The fifth property was our own home, which we found by the time we finished our fourth property. As we were building our business, we invested all our capital into the fourth property so that we could gain experience in renovation and financing strategy. We bought a property that required substantial renovation, and it took four months for us to complete everything. It was our biggest renovation project in 2016, and it was totally worth it. We remodeled bathrooms, added new windows, painted the entire house, and added a new fence. We use our home as a showcase to demonstrate what we can do for a total renovation.

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