RG 054 – New Market, 2 deals, $2mill raised all in 5 months with Pete “The Deal Hunta” Halm
About Peter Halm
- Peter is an Aussie who moved to LA
- He founded The Deal Hunta and started flipping houses in LA.
- He’s married to Monick Halm from the Investing Goddesses who was on the show in November.
Nuts and Bolts
Peter moved to LA and started to get involved in real estate investing by flipping houses however soon after he started he began to be priced out of the market. He began to look for other ways to use his
capital and this was when he met Robert Helms from The Real Estate Guys who taught him about other people’s money. Working with Robert he moved into syndication and starting looking for new markets which is when he met a real estate agent at a mixer who encouraged him to look into Albuquerque. Peter completed two syndicated deals in quick succession so he’s perfectly placed to give great advice to new investors; he also recommends finding mentors for every part of your life and business. Through having great mentors Peter has been able to find deals, financing and a great property team to help him build his portfolio.
Finding a market
Peter has a list of criteria for the city he was looking to invest in, he didn’t want to select a prime city because there is too much competition so instead he started looking at 2nd tier cities that often go under people’s radar. The TV business was just starting to take off in Albuquerque with the filming of Breaking Bad which was a good employer for local people; there was also properties with CAP rates between 7-9 which was ideal for Peter. He was looking to do the opposite of what other people were thinking, and so Albuquerque was perfect. Peter advises that no matter what market you choose to invest in, as long as you stay focused and work hard you’ll find deals. Peter recommends that after hard work the next most important factor when investing in real estate is personal branding. Peter has been working on building his brand as The Deal Hunta as he says the more people see what you’re going the easier it is to ask them for funding. It’s a lot harder to approach people for money out of the blue, it’s much better to already have a relationship and some online visibility.
After finding the market in Albuquerque Peter decided to work quickly to form a local team and highlight some deals. Firstly he looked on Lootnet for a broker and then he interviewed for property managers, contractors, lawyers and a CPA. Within 2 weeks of deciding on his market he had all these decisions all wrapped up. When finding the property management company Peter did online research first, then called for references and finally visited the team. He also had a lucky break because the team he was interested in hiring was also managing a property he was interested in buying so he managed to get the inside details on the sale. Peter’s purchasing style is to take C class properties and rehab them into A class. He does this by using granite and quartz counter tops and stainless steel appliances to make them stand out in the market. He also adds small changes to try and appeal to the millennial market, for example by creating an electronics charging point, a gym onsite, a dog park and a coffee machine etc. By doing this he can secure a 20% rental bump and cater to more up market clients.
Finding deals and financing
Peter found his first deals in Albuquerque from Lootnet.com and this was a successful venture because many of the properties had been on the site for a long time which made the sellers more motivated. Through his work with a mentor Peter has set a personal rule that all deals should be returning double digit annualized cash on cash, and double the investors’ money over 5 years. His first two deals had CAP rates of 7 and 9 and were both financed by Freddie Mac. Peter explains that he could have gone with Fannie Mae as the loan would have included the rehab money however the Mac deal had much better terms which allowed them to pre-pay without penalty and refinance the property whenever they wanted. On these deals Peter is projecting double digit returns for his investors by the end of the first year and that’s even when he’s been very conservative with the figures. Peter always allows for vacancy and renovation costs in his figures.
Top 5 investing tips
- Get comfortable being uncomfortable; grow and get into it.
- Find a mentor for every area in your life.
- Build your brand and network.
- Build a solid team of best people; don’t be afraid to work with the best to raise your level.
- Create win-win situations in all deals and relationships so that all benefit.
Contact – Facebook thedealhunta