PLP-079 Rashaad Rasberry: Looking At Comps From A Realtor’s Perspective

PLP 79 | Single Family Comps

PLP 79 | Single Family Comps

 

Like most of those who get into this industry, Rashaad Rasberry saw real estate as a way to generate wealth. He did just that working as a real estate agent helping clients in their buying and selling experience. In today’s episode, Keith Baker talks with Rashaad about single-family comps and ARV, as he shares his thoughts on Houston pre- and post-Harvey. Having worked with investors and cash buyers, Rashaad walks us through the differences between the two. He also goes deep into his area and talks about comps from a realtor’s point of view – from what to look for in a property to the kinds of buyer behavior.

Listen to the podcast here:

Rashaad Rasberry: Looking At Comps From A Realtor’s Perspective

How To Comp An SFR Property

You’re going to get some bombs dropped on you. I’m excited about this episode, our interview with Rashaad Rasberry. If you’re looking for practical tips and advice on mitigating and eliminating risks with the investment vehicle known as private mortgage lending, then you’re in the right place. If you also want to learn from my mistakes that you can avoid them and the mistakes of others, then have a seat. This is the show that is created for those who are looking to take control of their financial future by doing what it takes to create wealth in the marathon of life with old-world techniques and values. I’m looking to create a tribe of lenders that will disrupt the way we think about money, not only the way we think about money, but especially the way that we teach our kids about money.

Together, we can all prosper without the too big to fail banks and brokers. This episode is sponsored by Quest Trust Company and their Self-Directed IRA EXPO being held in Houston, my backyard, from August 23rd to 25th, 2019. I attended in 2018. I was a vendor and I’m excited to take part in the second annual Quest EXPO. Quest does go out of the way to create these wonderful networking and education opportunities that benefit all types of investors. If you’re within earshot, I highly recommend you make the trip to attend. When you do, stop by and say hi to me. I love to meet my audience. I’d love to meet other investors. I love to hear how people get creative in financing. Sometimes it’s stuff that I haven’t thought about or haven’t heard about. Go to PrivateLenderPodcast.com/expo for the link to purchase your ticket. That’s not an affiliate link. I don’t get any money. As everyone knows, I want to beat Scott Carson over at We Close Notes. He won in 2018. He got the most tickets sold. I’d like to beat him. He’s a great guy, but I love a little friendly competition. When you go to that website, use promo code, PLPodcast, for 25% off the already low-ticket price. The bills have been paid and now it’s time to get down to the brass tax. In this episode, I have the pleasure of speaking to a new friend in the real estate investing world. I’m excited that he accepted my invitation and took time to come on the show. Let’s go ahead and start talking about single-family comps with Rashaad Rasberry.

Lender Nation, I’d like to welcome Rashaad Rasberry to the show. Thank you for coming on and agreeing to come on and allow me to abuse you with some questions.

Thank you, Keith. I’m happy to be here. Hopefully, the abuse is minimized but we’ll see how we fare towards the end of the show.

A little background, Rashaad and I met not through real estate, but through soccer. Our daughters played on the same team together. I see him wearing a realtor shirt. I’m like, “Real estate.” One thing led to another, one decent season of soccer with some kids. Now, here we are. I’d like you to give us a little background about yourself. Let the Lender Nation know how you got into real estate and how you became a realtor.

My venture into real estate was not your typical journey. We try to give all praises to our wives. My wife got into real estate when we lived in Georgia back in 2010 to 2011. She was doing more property management and the idea was more how do we become entrepreneurs with some of the things that we enjoy doing. When we moved to Texas a few years ago, she got licensed and we got into residential real estate sales. It took me a couple of years after her to join that venture officially. I always helped her with contracts and working through deals because I love numbers and I’m data-driven, it was not a natural progression for me there.

I saw real estate as a way to generate wealth like most of us who get into this industry. It’s also a way to create some autonomy with decisions as an entrepreneur. I’ve been at it for a few years. We target the Katy, Spring and Cypress markets, but we serve all of greater Houston. We work under our brokerage, Keller Williams Realty, but we brand and operate as cornerstone property group specifically. Trying to think through what are some other good nuggets there, but I don’t want to bore the audience with my background.

I like getting the background. It’s like your origin story in the comic books. We all fall into whatever it is that we do, whether it be real estate or my day job with the insurance adjusting. I had no desire to go into insurance. It’s boring, but there I go, then here I am now with private lending, talking about it and trying to help keep people safe. You brought up a good point that your numbers are driven and that’s exactly why I wanted you to come on the show because we can talk about comps and ARV. We’ll definitely get into that. One of the other interesting things is that not only do you do residential retail buyers and sellers, you also work with some investors and cash buyers. Walk us through the obvious differences and maybe the not so obvious differences. Cash buyers get emotional in the negotiation, but they don’t get emotional on the property, by and large. Walk us through in your line of work what you see and what the differences are with the cash buyers for you.

Cash buyers are definitely unique. You make a great point. A lot of the emotion tied to a specific property or multiple properties is typically not there. It’s more about a return on investment. That’s the beauty of working with cash buyers or investors in general. We tend to help them with multiple deals. The work that I do with them is more in volume versus a singular approach to a transaction. They have more leverage more often than not, meaning the Houston market has been strong for years in terms of being a buyer. With all of the new construction that we have going on, it seems like there’s a new development in every suburban area popping up every quarter.

It makes it difficult for those who are trying to sell the property to compete with new construction or regentrification and things like that. With our cash buyers, our experience took off post-Harvey. A couple of years ago was a unique position for all realtors, all investors and all homeowners in general. Not to diminish the impact of Harvey, but to keep it more real estate focused. We saw a huge surge with our business with cash buyers. For Kim and me, it was a unique opportunity to get more involved in that side of the deal. Most of our market has been generated around first-time home buyers. It’s completely different. We took on a handful of investors and we loved it.

The closing dates were reduced at twenty-plus days with a cash buyer. The experience we got from learning about rehabs and working with general construction teams, to understand what material and labor costs are. Ultimately, what can we do to get that house relisted for that investor and help them get some return? We’re shooting for the win-win in our business at all times. The most interesting part as I think back on the investment side of it is the amount of work that it requires from a real estate agent to help a cash investor. Harvey, we looked on average, I was going back through some of our data. Per client, we must have visited and touched on average ten to twenty homes. That’s not normal, but at that time it was a learning experience.

We saw from the Memorial area all the way to Katy different price points and we had to help them how can I gauge a good ARV, but ultimately how can I gauge profit and revenue. The cash buyer, the investor nowadays completely has leverage just about in any market, particularly here in Houston because of our landmass and how much more we have available to do new construction. That resale property or that distressed property out there that they may be targeting, the sky’s the limit.

Cash buyers get emotional in the negotiation, but they don't get emotional on the property by and large. Click To Tweet

You brought up an interesting point because Harvey shuffled the deck. Everyone was worried about property values. This was the pre-Harvey ARV, and now people started talking about a post-Harvey ARV and. To give some people some perspective, because I know exactly what you’re talking about, but I realized if someone’s not in the Houston area that the Katy, Spring, Cypress areas the northwestern quadrant up to the North Memorial is a nice collection of neighborhoods south of I-10 that runs basically from downtown all the way out to Katy. That’s a pretty nice little swat there. Buffalo Bayou runs right through it as well. There was a lot of houses that got affected by the flooding with Harvey down the bayou.

You did a lot of volume with them. Hopefully, your work paid off and all the properties paid off. We’re coming up a couple of years post-Harvey. My flood premium went up about $50 a year. I’m happy because we were fortunate we didn’t get touched. Speak a little more to the Houston market. If this was a nine-inning baseball game, how many innings? I’m not going to hold you to it, but what is your gut telling us at Houston? Houston is special. We have a lot of rice fields that are getting converted into subdivisions. There are tons of lands all around. It’s build, build, build. That makes us unique outside of say the West Coast or the East Coast. Where are we? How many substitutions have you made? Are we into the extra minutes yet in the soccer game?

I’ll speak in terms of inventory touching that because I think that’s important. A couple of years post-Harvey, we’re still creeping into the second quarter or second half of the soccer game. We’re post-halftime at this point, meaning a lot of the good buys or good investments where someone could come in and get a property for relatively next to nothing. There’s an oversaturation of investors flooding in for this market. I’m not talking about local investors. We’re looking at foreign investments, companies coming in trying to look and purchasing that volume.

You have people from out-of-state looking at this market. The competition certainly has increased and intensified like any game would right in the second half. There’s still inventory out there. It takes a little bit more of a creative approach to identifying it. Your investors, looking back early 2018, maybe even late 2017 as everyone was trying to wrap their head around what happened. There were a lot of homeowners looking to walk away. They were done. They were part of the Tax Day flood earlier that year. Harvey was not their first rodeo. They were looking to be done with it.

On the investing side, that’s like a Yellow Brick Road. Here you can come in and save the day and it’s a win-win for everyone. Now, we’re at a place where the road’s not so yellow. You have to go in. Your bids have to come in a little bit higher. You have to take some risk on your ARV. You have to take some risk on the materials that you’re putting into the house and what it’s going to cost you. Sometimes you can use spec one materials that would be great for a home buyer. Depending on what the community looks like and the comps for the homes around it, if they have nice marble and granite, you’re not going to be able to come in as an investor and keep the material and labor costs relatively low like you would in the first half. There’s a lot that has changed. Is there still opportunity out there? Absolutely, but the time is ticking.

I try to dabble and do some wholesaling and some owner financing and whatnot. I’ve literally gone to houses and there’s our postcard and there are five, six other ones. They’re all lined out. I’ve got six investors to come. What’s the best you can do? I’m on the spot. I’ve done my research and I’m like, “These are the numbers I’m going to come in with.” I was out here in Katy near Cimarron. I came in and needed some work. Unfortunately, she had been divorced and the upkeep was not what it should have been. She didn’t hire the most qualified people. There were some brothers and some cousins that came over to help here, put a little duct tape on this and whatnot.

PLP 79 | Single Family Comps

Single Family Comps: Opportunity is still out there in Houston, but the time is ticking.

 

I came in and I said, “Let me give you a range. I’m going to say $115,000 to $120,000 because it’s going to need this.” She says, “I’ve already gotten better bids in that.” I said, “Thank you,” because I’m not risking overpay it and get caught holding the bag. I want to go on the record and say I’m not trying to predict or get you to say that some big crash is imminent. Markets have corrections and bumps. We saw it in the stock market, a nice little 10% correction. Things need to get leveled out. I’m not trying to predict like Nostradamus here like, “The next 2008 will occur again.”

When are we going to hit that next bubble? Let’s hit on that. From a real estate perspective and the general rule of thumb that I’ve always followed. Even as a homeowner myself and I’m looking at making my own investments as well. What I can always tell you that has been true, tried and tested as it relates to investments in the Houston market is what does the economy look like? What does our employment look like? Not what does it look like the current state? How has it fared over the last decade? If you study, and I’m not an economist by any means, but the key thing that I want to look at is do we have job growth? Is it accelerated? Is our unemployment rate in the hole? As long as those things and conditions are not set the correct way, real estate will be fine.

That’s the one thing that we can all follow in our market is that over the last decade or two, even though everyone who works in oil and gas will tell you there’s a huge ebb and flow to that. Over the course of time, it’s been pretty steady. I don’t see many trends going like this as it relates to unemployment in Houston. That tells me there’s always going to be a qualified buyer and a qualified seller as it relates to real estate transactions. If people are gainfully employed and our economy is growing from a commercial standpoint, that’s a key indicator to me that we’re fine. As it relates to the next bubble and predicting that, I would get some concerns when I see our unemployment rate spike or something like that. Outside of those conditions, I personally tend to not get emotionally caught up in all of the other market conditions that could occur.

We are unique in the sense that Texas tends to be business-friendly, certainly lender-friendly. That’s why I’m happy in Texas because I can foreclose relatively quickly. We’re a deficiency judgment state. If a house is sold, and let’s say I talked about how I lost my whole investment on the second lien, I have as a recourse I can file a lawsuit for the deficiency. Not every state does that. That’s why Texas is lender-friendly. Houston is the energy capital of the world. We live and die by oil. I remember growing up here in the ‘80s and interest rates were 12%, 16%, 15% on starter homes. They built this neighborhood in this field behind my house. I was devastated. They came and bulldozed it. They built houses. Within a couple of years, this was about ‘84, somewhere in there, there were the white foreclosure signs in the windows that had this little heading from the county court and everything. What does that mean? Foreclosure, what is that? Most people can’t afford the house.

They lost the job or whatever. I interviewed a successful real estate investor and a now private lender who’s basically wanting to ride off into the sunset. He came to Houston from Montreal in the early ‘80s. He’ll tell you to this day, because there was blood in the streets. There was an opportunity and he packed up, came on down and invested his way through it all. If anyone remembers the ‘80s in Houston, it was bad. Even ‘08 weren’t that bad for us. Overall, compared to the Coasts, but the ‘80s were bad. ’82 to ’83, that’s like our ’08 for Houston. My dad was in the oil field as well. I remember him sitting on the couch for a couple of months and going to every interview, doing everything he could. Once the oil came back around, it’s okay but people were still moving to Houston. They’re still building. This is the energy capital of the world.

We have to balance making a lot of predictions and gauging pulse on our market as it compares to the national landscape. As you mentioned, we’re the energy capital of the world, but you look at some of the other industries that are lifting here in Houston. Healthcare, manufacturing, professional services, all of these industries are, during the first quarter of the year where we were looking to add over 3,000 manufacturing jobs to the city of Houston. We’re the energy capital of the world. However, we are such a diverse city in many different ways that it’s dangerous to gauge our investments based on what’s happening nationally versus what’s happening more on a local market.

The cash buyer and the investor nowadays completely have leverage just about in any market. Click To Tweet

We’ve teased a little. Let’s get down into your area. For me, I’ve always said there are two different types of comps. There’s the retail sale comp on the house and then there’s the, “I’m going to landlord this house.” You’re not going to get retail, you’re not going to have the same fixtures in furnishings, generally speaking, unless you do put it and make it to a high standard, which later on in the market cycle it becomes more difficult to put that in, for example. First, let’s come at it from a retail perspective because the best way to look at comps is from a realtor’s point of view. On a retail sale, I’m buying a house. I’m putting my house on the market. You’re my listing agent. Beyond the beds, baths, square footage, what are you looking at?

I’d be happy to talk to anyone about this more in-depth but first and foremost, from my point of view, outside of those things as you mentioned, I’m going to be looking at proximity. What I mean by that is my subject property, what is my market doing within a half-a-mile radius? When you go to the Zillows of the world, which are great resources we all have at our fingertips to a certain extent or Black Knight or some of the other ones out there that will give you your market value. What you have to realize is that those are algorithms. From a real estate point of view or real estate agent point of view, I’m looking at the proximity first and foremost. To the point I made about being careful about comparing the Houston market to the national landscape, you’ve got to be careful about comparing your property to a property that sold five miles away from your property.

We have no zoning in Houston. That’s critical. That’s key. Proximity is going to be a key indicator that I will always start with. What are the homes within a half-a-mile radius like mine doing in the market? How are they performing? How long does it take for them to sell? Ultimately, what do they sell for? That’s what you want to know. I’d say proximity and then age on the market. What has sold? Not within the last year, not within the last couple of years, I’d say within the last few months. If you can get it down to the last month, you’re building an accurate comp based on some of those other characteristics like square footage, fixtures, etc. You have to start, in my opinion, with proximity and date relevancy in terms of a home sold.

I love the fact of the half-a-mile radius. I’ve had some BPOs and some CMAs come back. I’m an investor, which means I’m notoriously cheap. If I ask about something I expect, I pay for the CMA or the BPO. There are some houses that I’ve looked at before the appraisers have come back and they said, “It’s too unique. We can’t give an accurate appraisal.” They’re bare-bones criteria and let me get a BPO, Broker Price Opinion or a Comparative Market Analysis, the down and dirty. All you have to do is type in the address. MLS has got it down easy, but there’s an algorithm behind that as well. When someone is coming to me and says, “Your subject property is 1,800 square feet. Here’s one for 1,300 3.5 miles half miles away.”

It does you no good. Our team at Cornerstone Property Group, we take all those things into consideration, but if it requires at more in-depth look because this is what the appraiser’s going to do. A good appraiser, you’re going to pay a few hundred dollars for each property that you buy. They’re going to go to that property. They’re going to assess the materials on the exterior of that property. Is the hardy plank diminishing or bricks? Are we poles expanding to where there are signs of physical or weather damage? There are a lot of different factors. What does the land value look like that the property sits on? What are the surrounding amenities around that property, schools, commercial, etc.? It’s a more in-depth approach at looking at comparable values that have sold. A real estate agent can do the exact same thing.

The one key difference that we do is that we can get access to properties right inside. That is the key difference when you’re working with a real estate agent. Sometimes we’re looking at comps. What’s on the market now? I don’t focus on what’s active on the market or what’s pending necessarily, but those are good properties to gauge and investigate. If they were to sell at the listing price, why would they sell at that price? You have to go a little bit further and to say, “Forget the year it was built. Forget the square footage. What’s inside that home that’s driving that listing price or that pending price? Let’s see if it sells. If so, we can stack rank that against some of the other properties that have sold recently to come up with a good indicator.”

PLP 79 | Single Family Comps

Single Family Comps: A real estate agent can do the exact same thing appraisers do. The one key difference is that real estate agents can get access to properties right inside.

 

If I get an appraiser I trust, then they go to the property. They’re going to look at what materials are there. Is this Formica? Is it laminate countertops? Is it something oddball? I’ll go ahead and say this. I do one day want to acquire lots and lots of money. In my experience, the more money you have does not necessarily mean you have since I have walked into some houses, Royal Oaks, I’ll give you a prime example. In another life when I was trying to sell window tinting, I went to this huge million-plus home and I walked into the kitchen and I swear to you, hand to God, it looked like a convenience store. It was this blue laminate. It’s like walking into a Chevron station and going and getting a fountain drink or a hot dog.

If I have to use a realtor’s comp or BPO, what I like to do is drill down into the photos. There are professional photographers that take beautiful photos of homes, especially some I’ve seen on some of these newer communities like Bridgeland out here in Katy. They’re obviously Photoshopped. They’re beautiful, but beyond the gorgeous image, what does it have? What can you see? Is that hardwood flooring? Is it laminate flooring? One thing I try to teach and preach people is don’t fall in love with or don’t be enthusiastic about your borrowers’ enthusiasm. Don’t invest in their enthusiasm. Best in good due diligence and if it’s marginal, don’t be afraid to say no. Do you guys do the same thing on a retail sale in a relatively new community? You’re going to have a lot of the same homogeneity. In that sense, you’ve got some similarities that you can rest upon basic. Let’s say you go into the Spring Branch area, something that’s older. Houses are built in the ‘50s. It could be the original build. It could be something completely new.

My question being is, when I’m diving into those things, especially on an investment standpoint, I hang my hat on those little details, does it have aluminum wiring in it? I tend to overanalyze a little, I get a little paralysis sometimes. I learned from a guy I’ve had on the show, Ray Sasser, he literally is an encyclopedia of Houston real estate investing. He’ll tell you, “The Woodlands, you’ve got to watch out for the stucco. They had problems back in the ‘80s with this. Watch out, that place was built with Chinese drywall.” He is an encyclopedia and I’ve watched him comp properties before because his daughter was a realtor. He had his MLS access and he taught a class one time. He printed everything out and brought it to the class. He went through and showed like, “Look at this photo here. This has vinyl siding on this house. This one has a hardy plank or whatever.” Do you get that crazy specific as needed?

In all transparency, it’s case by case. I want to touch on a couple of things that you mentioned because they’re important to flush out quickly. That level of detail that Ray and his daughter used is necessary if you have the time to knock that out. If you think about the world of lending and investing, what are we all stacked up against? It’s 24 hours in a day. Houses and inventory can move. Something you see at 8:00 AM tomorrow can be gone at 2:00 PM that afternoon. Do I think that’s critical? Do I think there’s a place for that? Absolutely, if you have the time. The other thing that I want to rewind and talk through before I answer your question specifically is I’d imagine that for everyone who’s a lender, a seller, a real estate agent like myself, what we need to study when we’re thinking about comparables is buyer behavior.

In my own crazy psyche sometimes, I’m looking at it more from another angle. What do most buyers tend to want when they purchase a house? First and foremost, depending on who the buyer is, if it’s a first-time home buyer, they’re looking typically for something pristine, that’s clean, that’s move-in ready. If I’m working with an investor, they’re looking at the potential. To give you a couple of specific examples in my psyche, if I’m working with a first-time home buyer, I am going to tell my seller, “Your house is positioned in a place where you’re typically going to get traffic from first-time home buyers.” The way I know that is school systems, new commercial property, there’s an allure to the area that everyone’s chasing after. If you think about the early ‘90s with Cinco Ranch, it was first and second-time home-buyers. There weren’t many investors flooding the area, buyer behavior. For any buyer, typically a buyer who wants to be a first-time or second-time homeowner. One of the things that I tend to anchor to is everyone wants space and not just square footage. When we talk about square footage, that’s a number in most respects.

How is the house configured? Is there good functionality? Like the house out in Royal Oaks that had the crazy whatever, how many houses have you walked into where the minute you walk through the garage or something funky like a bathroom, a powder room that’s connected to the garage. That’s weird. Although the square footage may say it’s 3,000 square feet. That’s something that we all need to pay attention to as investors, lenders, agents and sellers. Is my house configured with the functionality of someone who’s looking to buy this house? Did I make some improvements to that home that’s wacky? It’s a turnoff. Buyer behavior is key but to answer your question specifically, yes, we do get that in-depth around comps sometimes if it necessitates because it makes no sense for me to work with any of my investors and give them a price point that’s way off from reality. It does us no good. We waste time. I lose credibility. They lose confidence. It’s a terrible experience. We do that when time is available and when the property requires it.

If people are gainfully employed and our economy is growing from a commercial standpoint, that's a key indicator that we're fine. Click To Tweet

Your criteria were great, give you a half-a-mile, don’t cross a major road, give me something in that area. Old comps, that’s fine. That shows the trend looking back. What’s been the most recent? When I’ve gotten my CMAs or my BPOs in lieu of appraisals, all I’m looking for generally is, “Give me that range. Give me where you think it is and give me the links to the photos so I can dig down.” I always go back and I go look at the crime. Out this side of town, that’s why people move out here unfortunately. You’re the first realtor that I’ve brought on in. At least that’s your job. Some people have gotten licensed through the investing side of things, but as far as your primary source of income, you’re looking at retail buyers, but you also realize these investors, there’s only 12% of the houses that are sold don’t get listed or whatever. There’s a niche, but your entrepreneurial spirit. I’ve already got this one source coming in through real estate, why can’t I have subsequent sources to come through.

Quit asking realtors for free stuff. I have too many friends that are like, “I need to get a realtor friend so I can get free comps.” It doesn’t work that way. I feel like that old lady on what commercial where she’s putting photos up on the Facebook wall saying, “I’m unfriending you.” Her friends right in front of her and the lady’s like, “This is not how this works.” There’s got to be some reciprocity or I know realtors will charge for CMAs. Someone in their office will handle it and like, “This is for an investor. This is not for retail buyers. The criteria are going to be a little different,” and so on and so forth. I want to get that out there. Quit badgering. I do feel bad for my realtor friends because I know they get badgered all the time. That’s my first point. Something you mentioned tied back, your buyer behavior and it’s a good distinction of if it were to be a retail sale, what buyer would be coming in?

Make the woman happy. If she likes the house, the husband will sign the papers. Ask me how, I know. As investors, we always have more than one exit strategy. You’re going to flip the house, that’s great. What if it doesn’t sell? Are you going to rent it? Are you going to owner finance it? Can you refi it? What are your exit strategies? It’s also important when looking at comps. I liked that you bring in the buyer behavior to that. I’ve never quite heard it done. Maybe somebody said that, if they did, I didn’t hear it. It didn’t speak to me. I’m glad that you brought that up and definitely want to incorporate that. Back in my earlier life when I built homes for MHI, I found that they want everything to be pristine. Unfortunately, people who come from apartments think that new homes come with maintenance men. They’re the construction managers.

We laugh and joke about that. Understand that psychology of consumers is what we’re talking about here. That goes well above and beyond any data point that I could share. The MLS doesn’t even speak to that. As great as the MLS, I use MLS every day. I could probably tell you what the UI looks from left to right. At the end of the day, what’s the psychology of consumers in nowadays market? We can divert into generational psychology. How do Baby Boomers purchase versus Millennials? The reality is if you don’t follow buyer behavior, you may lose in this business from time to time. You may make the wrong investment. You may invest too much. You may invest too little. You may put the wrong materials in there. You may configure the homes the wrong way.

Keeping a pulse on that is important. To be honest with you, I never caught the wave of that aspect of it until someone that I trust and who I see as a mentor in this business brought that to my attention. If you don’t understand buyer behavior, you’re doing a disservice to your clients. He was exactly right. I want the audience to catch that and think through that. Think about your experience as a home buyer. That’s the first place we all should start. What do we want in our first home, our second home or what have you? What do we want in our first investment property, our first project? What were we looking for in the ideal situation? Anybody who’s coming along right after you are looking for the same thing. We have to start there and then build upon our strategy based on that.

You’re right, it’s buyer behavior and that should be part of the exit strategy for everybody involved in the transaction. We’ll have to do part two on this probably.

PLP 79 | Single Family Comps

Single Family Comps: Don’t just wake up and start investing, lending, buying, and selling. Have a strategy and be intentional.

 

Hopefully, I didn’t divert too far from the beaten path.

I grew up in the Atari-Nintendo generation. I was probably a candidate for Ritalin but was too old. I’d already had the ADD or whatever. My dad always said, “There’s nothing wrong with that boy. He just needs a whooping from time to time.” We grew up down here in the South, but I do have that shiny object squirrel. This is especially as I try to teach people how to stay safe as lenders and to give them every edge. The last second before you decide, if all the numbers look good on the deal whether you’re the lender, the borrower or the investor, I always like to go for the gut check.

What’s my gut telling me? Is there a voice in my head? Maybe there’s a 5% chance this goes wrong, but there’s a 95% chance it goes right for you. I like those odds. I always go with the gut check. The MLS is as much information as it has, it’s limited in the psychological aspect. No algorithm is going to tell you what color that wife wants the living room, the kitchen or the man cave if it should have brown leather, black leather. Should we allow cigar smoking? There’s some part of the human condition that can’t be quantified or put into an algorithm. I want to get you back on.

That’s the beauty of a real estate agent. I’ve got to throw this plug out here. Anyone who’s out there and they want to deep dive into what we were talking about, buyer behavior, the psyche of a buyer, psyche of a home buyer specifically. Let’s chat. Cornerstone Property Group would love to help you and guide you. Not everything will matriculate into a transaction. We get that. We take more of an educational approach to the market. If I can impress anything upon this audience is that be mindful about what you’re doing. Don’t just wake up and start investing, lending, buying and selling. Have a strategy. Be intentional. Too many deals go wrong when people pop up.

I want you to give us your links and your number and everything. That’s the one thing that I struggle with or I still struggle with as I try to coach lenders is you’ve got to be safe. You’ve got to be intentional. You need to think about what you’re doing. At the same time, if I hadn’t had a little bit of recklessness, I wouldn’t be here. For me, it’s how do I balance. I sat at the back of the REIA meetings for a few years not doing anything, thinking that I was an investor because I went listening and I was absorbing all this, which is good. You need to take that information in, but you need to press the flesh and shake somebody’s hand and say, “How are you doing?”

I’m a newbie. There’s nothing wrong with being a newbie. Plus, people are going to sniff out a newbie anyway. You don’t have to tell anybody you’re a newbie. Don’t figure it out. Get the process going. Start talking to people. With me, I’ve found that I had a problem talking to sellers and potential buyers. As outgoing as I am, I couldn’t have conversations about, “I’d like to buy your house.” I had a few years in Toastmasters, public speaking. Get over that hump, get out there and it put me into proximity of people who are successful real estate investors, full-time investors. Ray Sasser’s one of them, Linda Moscarella, for example. These people that are in the Houston, the heavy hitters in the Houston real estate game. That put me into that. Definitely reach out to Rashaad. Don’t abuse him. He’s there to help. Give us the full plug. Give us all your info. How do we get in touch with you?

Too many deals go wrong when people pop up. Click To Tweet

The Cornerstone Property Group, www.CPGSellsHouston.com. That’s our website. Go check us out. We can also be reached at Info@CPGSellsHouston.com and I’ll share some of the links to our social media feeds. You can reach out to me directly at (832) 888-4836. I’d love to help. I’d love to talk. This is what I do.

Let’s thank your wife for getting licensed, getting into the game and then bringing you along as well. Rashaad, thank you so much for coming on. I do appreciate it. We’ll figure out another granular conversation and get into buyer behavior here hopefully pretty soon because that’s something I definitely want to get into.

Thanks for having me.

You take care. I’ll speak to you soon.

Take care.

There you have it. I told you there are going to be some bombs dropped. There’s a lot of common sense but there’s a lot of good insight in there as well that a lot of people don’t think about all the time. I wanted Rashaad to come on and give that realtor’s perspective. He got rid of a lot of Harvey inventory and he’s also got that eye for the investment side. I hope you enjoyed it as much as I did and hearing his perspective. Don’t forget, if you want to get 25% off the ticket to the Quest Trust Company’s Self-Directed IRA EXPO, 25% off the ticket, that’s $350 for a three-day event for VIP and it’s $100 or $150 for non-VIPs. It’s reasonable.

Go to PrivateLenderPodcast.com/expo, use promo code, PLPodcast, and get 25% off and I will see you August 23rd to 25th at the Royal Sonesta Galleria in Houston. That’s not an affiliate link. It would be nice if it was but it’s not. I just want to beat Scott Carson. I don’t get any money for that, please help me do that. If you buy your ticket, put it on Facebook. Spread the word to other people and other investors or people interested in not only private money but also all types of real estate. It’s a great place to be. It would mean a tremendous amount to me. I’d be in a great place if you could leave me an honest rating and review over at iTunes. The more ratings and reviews that this show receives, it helps bring it to more people who want to take control of their money and their future on their terms, just like us.

You can connect with me on social media. I appreciate you reading and I want to thank you for your time and your consideration. Please keep reaching out to me. I appreciate all the feedback that I receive. I don’t always get to respond in a timely manner. Sometimes some of what I’m finding out, I haven’t responded at all, I apologize. I’m getting the hang of all this slowly but surely. I do appreciate the feedback. Besides health, happiness and self-awareness, I do wish you all safe and prosperous private lending. I’ll catch you in the next episode.

Important Links:

About Rashaad Rasberry

PLP 79 | Single Family CompsNumbers Man

Data-Driven service helps clients make well-informed decisions. When to sell, what amount to sell for, the rate of return from an investment- these are all questions that accurate numbers will answer. A well-informed client is a happy client!

Deal Closer

The Win-win negotiation is a careful exploration of both your own position, and of the other party, in order to find a mutually acceptable outcome that gives you both as much of what you want as possible. If you both walk away happy with what you’ve gained from the deal, then that’s a winwin!

 

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About the author, Keith Baker

My ultimate goal is to create an economy for Real Estate (and other) Investors where banks are no longer needed. An economy where every day people look to each other for leverage and support. During the day I am an insurance adjuster for the oil field, where I handle millions of dollars of other people's money (OPM), and by night I invest in Real Estate and host this podcast. I hope you have an excellent experience and find real value within this website and the Private Lender Podcast. Please leave comments or submit your questions on the Contact Page.

I wish you prosperous, safe and happy lending and investing!

Thanks for listening

-k

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