- Dedric and Krystal Polite have amassed a portfolio of 66 units worth $5.2 million in just a few years.
- The couple’s unique real estate investment strategy is featured in an A&E series called 50/50 Flip.
- They share how to find properties at a discount, obtain financing and flip them for maximum profits.
“As much as we like to flip houses, the plan here is to build the neighborhood and develop more housing that we can rent out and pass on to our children to really create real generational wealth,” Dedric Polite said in a statement. trailer for A&E’s new 50/50 Flip series.
Like many real estate entrepreneurs, Dedric traces his passion for real estate investing back to reading “Rich Dad Poor Dad” in his early twenties, but it wasn’t until he met his wife, Krystal, that the former sales manager put the idea into action.
Together, the enterprising couple, then based in Boston, began renting out their apartment on Airbnb. The side hustle quickly took off and brought them $50,000 in revenue in four months, recalls Krystal, who worked for an appraisal management company.
In 2012, the Polites moved to North Carolina where they secured their first wholesale deal after finding suitable property on Facebook Marketplace. In a wholesale sale, buyers do not need to renovate to resell the property. They obtain the contracted property and then sell or assign that contract to another investor at a higher price.
That first deal netted the couple a profit of $11,000, but their real estate business quickly ramped up from there. Before they knew it, the Polis had earned more than their annual salary in three trades.
“That’s when we realized we really could quit our corporate jobs and do it full time,” Dedric told Insider in an interview. “Our goal was freedom. And that’s what real estate has allowed us to do, which is to become truly financially independent where now we have enough passive rental income where we don’t have to work if we don’t want to.”
The Polis quit their jobs at the company, but they’re still working – on something they love. In 2017, the husband-and-wife team launched their real estate investment company, Be Polite Properties LLC, which now has a portfolio of 66 units worth more than $5.2 million, according to filings. review viewed by Insider.
In addition to the lucrative properties in their portfolio, some assets do not yet have addresses or bank valuations because they are vacant land that is subdivided from houses owned by the Polites. Their estimated value is based on the selling price of comparable-sized lots in the area, according to the couple.
TV-worthy real estate investment strategies
With such rapid growth in their property portfolio, the duo, whose long-term goal is to own 10,000 cash-generating rental units, shows no signs of slowing down. They staffed their real estate investment firm with a tight-knit team of eight people, including virtual workers.
More recently, their unique real estate investment strategy was the subject of a miniseries on A&E titled “50/50 rollover.” The six-episode reality show chronicles their journey to renovate and transform 10 single-family and multi-family homes for less than $50,000 each and all in less than 50 days.
The official trailer for the series premiere #5050flipfind out how we’re creating generational wealth by flipping houses on Jan. 29 at 12 p.m. ET on @AETV. pic.twitter.com/LA7Le664jP
— Dedric Polite Meta-Investor (@dedricpolite) January 20, 2022
Renovating properties on a limited budget and schedule can seem like a daunting effort, but finding a good deal is often the hardest part, they say.
To locate discount properties, the couple would drive around a neighborhood and look for vacant or distressed homes, a strategy they called “driving for dollars.” They also engage in the old-fashioned “direct mail” strategy where they send letters to landlords asking if they are interested in selling their properties. Another strategy is to cultivate long-term relationships with sellers by going out as a team to meet people, knock on doors, and gauge their interest in selling.
“We typically buy properties at 40 cents to 60 cents on the dollar because we’re going straight to the seller,” Dedric said. “It’s a concept we call renovation wealth, which is buying properties that need work directly from sellers, repairing or renovating them, as a way to create wealth. “
How to get funding and invest opportunistically
While the Polites had steady salaried jobs before going into full-time real estate, none of them came from the money, having been raised by single parents who lived in subsidized housing.
In order to secure financing for their first transactions, the couple turned to family, friends and colleagues for interest-bearing loans.
“My husband’s mom was our very first private investor. She gave us $10,000 for our very first flip,” Krystal said. “So start with the people closest to you because they’ll understand a bit more if something goes wrong, but that’s a way for you to do it in the beginning.”
Besides private funding, the couple also suggested using the Loan insured by the Federal Housing Authority program, which has a relatively low down payment requirement of 3.5% of the purchase price instead of the usual 20%. One caveat is that FHA only allows one FHA loan in an individual’s name at a time, so unless an investor can refinance their FHA loan into a normal mortgage, they cannot apply. another FHA loan. Also, the FHA loan program is designed to borrow to purchase a primary residence, which means the homeowner must occupy the property for most of the year.
Another way to get financing in the early days, according to Dedric, is to hack the house.
“That’s actually what I did when I was 25,” he said. “I bought a triplex in Boston and lived in one of the units and rented out the other two; the other two units pretty much paid off my mortgage.”
The Polis like to keep multi-family properties and short-term rentals because they tend to generate better returns than long-term leases on single-family properties. After accumulating a few properties in the form of buy-and-hold, they began opportunistically engaging in housing flipping to generate more capital for their next big project.
Bullish outlook despite uncertain macro trends
Like many real estate investors, the Polites’ success has been boosted by the boiling real estate market over the past two years. This could change as
Federal Reserve
is on track to raise interest rates and reduce its bond portfolio by $9 trillion to curb inflation, which is at its highest level in almost 40 years.
Already, US mortgage rates have reached their highest level since March 2020, with the average rate on a 30-year loan standing at 3.55%.
Politicians acknowledge rising mortgage rates could ‘put a bit of a drag’ on home price appreciation, potentially bringing the annual appreciation down to single digits from the double digit growth seen during the pandemic.
However, they still view real estate as a long-term strategy for building generational wealth. They argued that the low housing stock in the United States could last for years as housing demand continues to rise as urban workers seek more space and a better standard of living in the age of work. home.
That being said, the couple have a simple philosophy for investors looking to get into real estate: invest in education and take action. “When my husband and I got into real estate, we spent over six figures attending conferences,” Krystal said. “So by the time we got our first contract, it was really on to the races.”
Dedric added, “When Krystal and I first met, I read all the books and attended seminars, but I was hesitant to take action to start doing this.”
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