Apr 3, 2018
Most investors would never even think of investing in flooded
homes, but not Jason and Pili Yarusi. This real estate power couple
began flipping these flooded homes and raising the elevation. It’s
no wonder they excelled at more traditional flips and are focused
on renovating apartment communities. As the hosts of the REI
Foundation podcast, they help others learn how to build solid real
estate footings through the steps and missteps from other
investors. On this episode, they explain their approach to
renovating flooded homes in New Jersey and how they identified
Louisville as an ideal market for out of state apartment investing
through their commercial asset firm, Oak Capital Partners.
Key Market Insights
- Jason is from New Jersey, Pili is from Hawaii and moved to NY at 21
- In 2003, met at work and it took 10 years before they started dating
- After Hurricane Sandy, Moved to NJ to help the family construction company
- Started reviving flooded homes, raising them to a new elevation
- Rapid flooding continues in areas where excess rain has nowhere to go
- Flood insurance rates are going up as much as $12k/annually
- Check FEMA website to see if home is in a flood zone
- Jersey shore flooded home flips take 9-12 months
- Flood Zones: X, AE, A, VE , V
- Houston has 101,000 properties within the 100-year flood map
- FEMA can buy home, but it can no longer be used for development
- If looking to invest in flood zone properties: team up with a house lifter, go to the local township and learn the FEMA rules and get it in writing
- Manasquan, NJ is a beach town with lots of opportunities for flooded homes
- Flipping focus: Union County in North Central , NJ.
- Started buying duplexes in Indianapolis and used the team they had in place
- Criteria for out of market investing: Steady population growth, job growth and job diversification
- Wildcard was finding a market where they had personal connections – sister lives in Louisville
- Louisville major employers: GE, FedEx, Churchill Downs, Aetna
- Started understanding the areas and then breaking them down to see where there was new construction
- Honed in on South and South Central Louisville for working class families
- Wanted population density and lots of complexes
- 94 unit found through a property management company
- Was $1,000,000 off on the price and after 7 months the seller dropped the price and they negotiated
- Leverages property management to help them know the market prior to finding the property
Bull’s Eye Tips:
Winning Your Market: Have someone on the ground, figure out what you’re good at
Tracking Market Changes: Google alerts and talk to people in the area, finding the path of progress, do what’s boring on markets
Daily Habit: Pili - time blocking and doing her one thing; Jason - meditation
Resources:
Miracle Morning by Hal Elrod
Best Business Books:
Never Split the Difference by Chris Voss
12
Week Year by Brian Moran
Digital Resources
Tweet This:
"3% of the shoreline could recede and be under water"
"Many investors will not touch flood zone properties"
"The key to reading is implementing"
"When investing, stay boring"
Places to Grab a Bite in New Jersey:
Connect with Jason and Pili:
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