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The Equity Growth Trifecta

6/9/19 11:31 AM / by Davey Wilde

Davey Wilde

My clients often express they ultimately want to become Real Estate investors, usually alluding to an undefined future date once they can afford it.   Many people think they cannot start investing until they have the 25% down payment saved, but this couldn't be further from the truth!
 
My goal is to help my clients see their home, their primary residence, as a stepping stone to start building the real estate portfolio NOW!
 
Buyers that want to take this route, I call "Investment Minded Buyers." Does this describe you?
 
 
equity growth trifecta davey wilde fresh look grey fb
 
 

A Smart Way to Buy a House!

This article is a segment of my complete discussion on "How to Buy Your First Home like an Investor


When working with Investment Minded Buyers, we are always looking for something I call the Equity Growth Trifecta; In other words,  move-in ready investment properties loaded with potential for massive equity growth.
 

 

#1 - Buy with Equityunique situation

Our first objective is to find or create a unique situation that allows us to buy with equity.  This means for some reason we are able to secure a deal,  just like when you find a great sale at Nordstrom Rack.  
 
My most common strategies to accomplish this objective include:
  • Make multiple offers
  • Probate or Short Sale properties
  • HUD owned homes
  • Distressed properties
  • Off Market Opportunities
  • 20+ days on market

 


#2 - Buy in Growing Areagrowing area

Our second objective is buying in high appreciation areas.  Of course, most all of Seattle is an appreciating area, but what specific neighborhoods can we expect an above average growth compared to the overall market? 

There are also dozens of submarkets in the cities surrounding Seattle, all have fantastic growth opportunity at 50 to 80% the cost of owning in Seattle proper. 

Ways to identify a growing area:

  • Research neighborhood growth plans available at the City's Urban planning dept
  • Research local colleges and universities, are they expanding?
  • Research building permits pulled in a given area,  are builders building a lot?
  • Research transportation development plans, are there any major transit systems going in?
  • Look at recent growth patterns, are there any nearby neighborhoods that could be good candidates for the next "it" spot? 

 

#3 - Forced AppreciationNeeds TLC

The final objective is locating a property that needs a little to a lot of physical work aka TLC. The more work you are willing to do, the more value you can add immediately.  Not everyone is comfortable with this idea, but you may be comfortable with a smaller scope of work than a complete remodel.  Some clients in the past have spent $7,000 after closing to have interior walls painted and new floors installed, instantly increasing the value of the property by $15,000. 
 
The best advice is to examine your skills and / or what you enjoy doing.  If you like gardening and landscaping, look for a property with an ignored yard waiting for your green thumb.  Perhaps you are particularly skilled at interior design,  a cosmetic kitchen and bathroom renovation could be the best use of your skills. 
 
I once worked with a client who is a Roofing contractor by trade.  This was an obvious one, we were looking for properties with extremely old to failing roofs.   Perhaps you are not a tradesmen, but is there anyone in your extended network who is?  For example, your co-worker's husband is an electrician-- let's look for properties with old electrical systems, because you have someone you trust in your network perform the work at a reasonable price. 
 
Simple Ways to Force Appreciation:
  • Add a fence or dog run
  • Replace windows / doors
  • New roof & gutters
  • Interior and / or exterior painting
  • Landscaping Overhaul
  • Replacing flooring
  • Have the home re-wired

Deal Sweet Spotdeal sweet spot

I want to find you a property located in a growing area, that needs some work, that has been sitting on the market for 20+ days.  
 
Getting all 3 is extremely hard to do, we typically shot for 2 out of the 3, but on the rare occasion, we are able to secure all 3!
 
Securing the best deal for you and your financial future is easy to understand, but difficult to achieve.  I compare it to golf, very easy to understand - Put this ball in that hole - But very difficult to do well.   
 

Work with Me

I am consistently able to secure Equity Trifecta Deals for my clients because I've been developing the correct skill set since 2011.  These skills include:
  • Patience - Waiting for the right deal
  • Contract presentation - Knowing what is important to the seller
  • Negotiation - Facilitating a win for my clients
  • Organized follow up - Following up consistently with those who told us NO
  • Off-market opportunities - Most deals are not on the market

davey wilde sold the house

Davey Wilde

Fresh Look Real Estate Broker

DW Homes Investments

Email  davey@freshlookre.com

Call/Text  253-740-5205

Website  www.freshlookre.com/davey-wilde

 


 

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Topics: Buy, real estate, seattle, Fresh look real estate, Davey Wilde

Davey Wilde

Written by Davey Wilde

Davey Wilde is one of the founding broker of Fresh Look Real Estate. He entered the real estate industry in full time in 2012; Davey serves as a licensed broker and is actively investing. Davey's clients are primarily investment minded homeowners, flippers and builders. His clients goals become his goals and he has worked in markets ranging from Marysville to Spanaway, while focusing himself primarily in North Seattle markets.