Want to be a property owner? Think way outside the box, a panel of real estate investors told attendees Wednesday at Inman Connect New York.
Kristin Smith owns a cemetery.
The Dallas-based agent with Dave Perry Miller Real Estate said Wednesday afternoon at Inman Connect that she didn’t set out to own a collection of burial plots, but she was always on the look out for deals and eventually a cemetery popped up on her radar for only $25,000. It had been mismanaged and Smith thought she could turn it around so she took a chance and bought it. Later, she found out the deal was even sweeter because she scored a $50,000 city grant to improve the property.
The experience epitomized Smith’s thesis Wednesday that agents who want to become property owners will benefit from thinking way outside the box.
“Get creative,” she told an audience of a couple hundred people Wednesday.
Smith offered a handful of other strategies she’s used to pick up other properties as well. She said that at one point she found a promising rental but didn’t have enough cash to buy it, nor could she get financing from a bank. So instead, she offered to pay the sellers 6 percent interest if they put up the money for her to buy their property.
The deal went through. Now, she owns that rental, the former owners are making interest on their loan to Smith and, she said, everyone involved is happy.
“They’re making just as much money,” Smith added.
Smith also advised agents to use their local market knowledge when embarking on real estate investments.
“Look for transitional areas,” she said. “You as a Realtor should know where the market is going. You need to go to those areas before everybody gets there. That’s where you double your money.”
Other strategies Smith has used to pick up rentals include creatively structuring contracts and approaching landowners about off-market properties.
Bill Lublin, the Philadelphia-based CEO of Century 21 Advantage Gold, has also built up a portfolio of rentals using creative strategies. Lublin, speaking during the same Inman Connect session with Smith, recalled for example flipping properties when he didn’t have the cash to actually buy them.
“Somebody has a piece of real estate, I have the money to rehab it but not to buy it,” he explained. “So they’ll put up the property, and we’ll sell it and split the profit.”
In Lublin’s case, he said that he is willing to pay 100 times the monthly rent for a property, and he wondered aloud during Wednesday’s session why more people don’t invest their money in real estate. The answer, he speculated is that it can be very difficult, especially at the beginning.
But, he added, with each purchase, investing gets easier and easier.
“Buying your first is crazy hard,” he said. “Buying your 21st is pretty easy. Buying your 121st, you don’t even think about it.”