Pivot or Get Crushed: Why Real Estate Investors Must Adapt to Survive This Market

Nate Hirschberg (00:00)

Yeah, I think inevitably for sure. It’s the old friends episode with pivot with the couch. But, but definitely you got to pivot. got to be one thing for sure is change is inevitable. No one likes change, but change is inevitable. And we, we really, really felt that I would probably say the most this last year, we always did a bunch of outbound marketing, really state specific and area specific.

And we really were running with that fix and flip model. Whereas now we actually operate pretty much nationwide with the exception of Texas and California.

Dylan Silver (02:07)

Hey folks, welcome back to the show. Today’s guest, Nate Hirschberg is a real estate investor in South Carolina with Stag Mountain Properties. You can find him at stagmtnproperties.com. Nate, thanks for taking the time today.

Nate Hirschberg (02:20)

appreciate you having me, I’m excited to be here.

Dylan Silver (02:22)

Now, the Carolinas are an interesting place. You were talking about this before the show. Obviously, being in South Carolina, you’ve been aware how great it is for real estate investing, but right now in particular, it feels like there’s a national consensus that it’s a great place to be investing in real estate, not just for folks who are living there, but also for out-of-state investors as well.

Nate Hirschberg (02:44)

Yeah, I it’s definitely, definitely true. No doubt about it. The Carolinas have always had this stigma. Like we were talking about, it’s a great place to raise a family. And there’s tons of corporations here too. Like here in, here in Charleston, Boeing, they don’t have their headquarters here, but they’ve got a massive infrastructure here. So that compared with just a good quality of life, spot on. Yeah. Carolinas are getting flooded.

Dylan Silver (03:08)

Now I do want to ask you specifically about getting started in real estate in the Carolinas, because I know that you’re involved in a number of different segments. You were talking before the show, know, mobile home, single family wholesale for folks who are getting started and they’re not sure. Hey, do I start with a flip? Do I start in the wholesale space? Do I go on market, buy and hold? You know, what asset class should I be looking at? Is

South Carolina specifically, is one segment, do you think, more feasible for a newcomer investor than another in South Carolina?

Nate Hirschberg (03:42)

I think that’s a good question. It is relatively market specific, ⁓ but as a whole, I think a safe bet if you want to get started, know, Charleston or Carolinas aside, wholesale is, I think, the best way to get started. There’s little implications for cash needed.

you can really do a lot of damage with a mentor. And I think that’s the underlying message here is if you want to get started, fix and flip, get started, fix and flip. Maybe you have some cash, maybe you some experience, but like get a mentor and find out what you want to do. Cause you might get into wholesales and hate it and be like, screw this. I want to fix and flip. And there’s nothing wrong with that. That’s the beauty of real estate investing is you can figure out what you’re good at and what you enjoy doing and pour gas to that fire.

Dylan Silver (04:28)

Yeah, I mean, that’s exactly right. I’ve had an investor on the show tell me, you know, if you enjoy hosting people, you might be compatible to be a short term rental host, you know, Airbnb or something like that. But if you are, you know, encumbered, if you feel like it’s bothersome to be texting guests and, you know, managing stays and cleaning clues and you’re always, you know, having to deal with regular turnover, that could of course be an annoyance for you. So you do have to pair.

you know what your interests and passions are with the segment of real estate that you’re investing in. I would like to get a little bit granular into the weeds if we can’t hear on wholesale in South Carolina. I mentioned before Hopping on you know this is where I cut my teeth in Texas specifically in the wholesale space and each market is different right. If we’re talking you know wholesale in in South Carolina for instance. What’s the the you know typical.

acquisitions price that folks might be targeting there might be a range right but for a distressed property that might be a good let’s say a flip opportunity what’s the general range that you’ve seen for for wholesale

Nate Hirschberg (06:24)

South Carolina, I feel like this is every state, but it’s gonna vary so much on your market. As an example, I could go into the, what they call the upstate of South Carolina and get into some maybe not so affluent markets. And my price to entry is gonna be far lower. I’m looking at ARVs after repair values and sub $200,000 still.

Dylan Silver (06:46)

well.

Nate Hirschberg (06:47)

Whereas here in Charleston, that’s just not reality. You’re looking at like, you know, probably anchor price to like 350 ARB to 400 is kind of your bread and butter. And you have your higher end homes. There’s a lot of people that I know that are making some, some assignment fees off of ARB properties of 800,000 to a million. It’s really going to be in South Carolina, specific to your market. But if you’re just getting started to answer a question a little bit further, I don’t know that there is a

better just know that when you’re targeting sub $200,000 properties you’re probably gonna have headaches that you won’t have such as maybe title issues maybe the area hasn’t fully jetrified yet so you might not have as much many buyers as you will in maybe a little bit more of a jetrified market like Charleston

Dylan Silver (07:36)

I’m a big fan of the investing in the urban sprawl of cities. I think that that’s a generally good strategy wherever you are. Of course, if you’re in an area which is one of the major metros of the United States, that urban sprawl could be massive and you might still be dealing with relatively high priced entry points. When we’re talking about South Carolina, Charleston, Charleston is south or north?

Nate Hirschberg (08:02)

Yeah.

Dylan Silver (08:03)

Okay, so let’s get that confused. Thank you for clearing that up for me. When we talk about Charleston, for instance, and you’re looking at that urban sprawl, what are some cities or towns on the outskirts of Charleston that people might want to keep an eye on if they’re looking at, okay, well, maybe I’m not in Charleston proper, but I’m investing in the outskirts outside and there’s some opportunities here.

Nate Hirschberg (08:24)

Totally. And I love that too. Like how we set up our marketing just for like context on that is I always look at some major metropolitan cities, but then one hour in each direction as the pro flies is kind of my marketing radius. You’re usually safe with that. avoid super rural areas, but you’re still close enough where

a lot of folks will commute to these metropolitan cities. It’s more affordable. To answer your question about Charleston though, Summerville is a really up and coming market, almost unrecognizable within the last five years. And then you have your Goose Creek area and Monks Corner. That’s more so like your outskirts of Charleston proper, I would say.

Dylan Silver (09:05)

Now for flippers specifically, and I do think that flipping may be coming back slightly, but it certainly hasn’t been easy over the last handful of years. ⁓ What I’ve seen, and this is coming from my Texas experience now, is flippers are competing in many markets with new homes and ground up construction, which historically wasn’t always the case. But when people have the opportunity to buy brand new, some cases below

300,000 from one of the national builders and these flips can be around the same price point. It’s something that people have to keep in mind. So in some of those towns that you mentioned in the urban sprawl of Charlotte, are people having to keep an eye on, what are new builds going for? Because ultimately our end buyer might be looking at either a pre-owned property or they might go new based on the price.

Nate Hirschberg (10:35)

Yeah, absolutely. And I mean, I used to be really, really flip heavy. When the first year that I got into this business and did it full time, I did 32 flips that first year. And now looking back, I’m like, I couldn’t imagine doing 32 flips with the marketing condition the way it is now. So it’s been tough. Um, new builds, obviously you’re going to have a little bit more of an attention to them. They come with that, you know, extended warranty, generally 12 month builder warranty. It’s brand new. Uh, you can’t really go wrong with that.

And I’ve done new builds. I’ve done new builds based on the most recent one that I did was the exit price of 2.5 ARV million. So 2.5 million for the ARV. But I had a buyer before that was even built. And that was just so much more enjoyable. Now I have a flip listed right now for $350,000 that was supposed to take me four months. It’s now on month seven and I’m just now getting out from it.

And you know, I think that speaks volume of like, you just have to put your best foot forward. If you’re not going to do new building, you still want to flip, got to put a really good product out.

Dylan Silver (11:41)

Now, what I’ve heard about, you mentioned the property potentially is taking longer or sitting on market. I’ve also heard that people do have to be careful about improving beyond what the market supports, right? So I’ve seen folks go in with the mentality of, I have a pre-owned home. I want it to sell quickly, but then they’ll put in $70,000 more than what they had previously planned into work to get a HGTV level flip.

but they’re in a street even, just on a street by street basis where it doesn’t warrant that level of an exit price. Is that something that you’ve run into over there or that you’ve seen or is it really not an issue because people are willing to pay a little bit more for a nicer property in those markets?

Nate Hirschberg (12:32)

Yeah, that’s a good question. think at some point, inevitably, there’s a diminishing point of return on if you would go through and put gold sinks throughout the whole home and it’s a $300,000 home, that’s cool. But you’re probably not going to get that back.

I’m a big fan of looking at comps in the area that sold quickly. So in this market, like 45 days and under and looking at what did they do because that move in this, now I have a general scope of work that’s conforming to the area and has a actual historic data set showing that people want it. And that’s usually how I go about doing my scope of work to make sure I’m not over improving.

Dylan Silver (13:11)

I think a lot of people, you know, maybe go wrong unintentionally because they have a cookie cutter approach. And if they take that cookie cutter to an area where there’s no cookies, you know, in that area to match, then they’re potentially putting something on market that the market won’t support. You mentioned, you know, adapting what you’re doing to what those comps show. Do you have like a recent example of that so we can give folks like, hey, this is something that happened in a project?

Nate Hirschberg (13:39)

Yeah, actually I do. So ⁓ here in Charleston, I went away from, have, you know, my standard base level material that I always use, the selections. And this particular home just was, the layout was a little funky. So we actually went with different selections throughout. I hired somebody to do this for me because the design plan, I just couldn’t conceptualize it. So we had an actual pro come in and give us basic renderings that were, and were better

than anything that we would have come up with. And it paid for itself 10 times over. Next to the house actually that I was referencing earlier. And it really was totally different than anything that we had done before, but people loved it.

Dylan Silver (14:23)

How often are you working with a design professional? Is this a one off or do you do this on each prop?

Nate Hirschberg (14:30)

That one we’ve done, we’ve used them twice. It’s something newer that I’ve started doing because it just makes it easier. the thing I like about it the most is it enables the designer to hand the contractor a outline of the level finishes to the point where she’ll actually have product selections on there. So like for the tile, here’s what we want for the bathroom.

They don’t have to think. So when the contractor and crews don’t have to think, they can move with speed and certainty, which shortens that process. And as we all know with flipping, time will kill all deals. The faster we can move, the better.

Dylan Silver (15:03)

kills deals.

Now I know that you’re involved in some other segments. were talking before the show, mobile homes, wholesale. You mentioned doing 32 flips at one point. I also know in order to stay active in real estate over a 10, 15 year period, people are gonna have to pivot and adapt. Walk me through some of those pivots, where you maybe started to shift away from the fix and flip strategy to where you are today.

Nate Hirschberg (16:15)

Yeah, I think inevitably for sure. It’s the old friends episode with pivot with the couch. But, but definitely you got to pivot. got to be one thing for sure is change is inevitable. No one likes change, but change is inevitable. And we, we really, really felt that I would probably say the most this last year, we always did a bunch of outbound marketing, really state specific and area specific.

And we really were running with that fix and flip model. Whereas now we actually operate pretty much nationwide with the exception of Texas and California.

And we really just wholesale in no big, we went away from outbound marketing heavy to inbound marketing because the quality of the leagues, while they are more expensive, the quality is so much greater. Whereas, you know, you’re going nationwide, you have a wider approach. That’s been the biggest thing for us is just shifting the marketing, being okay with that additional ad spend and making sure that our processes and systems on the back end were dialed in enough that we can move with certainty on nationwide.

model.

Dylan Silver (17:21)

Yeah, I mean, when we talk about, you know, remote wholesaling, think there are so many people who want to do it and I’ve attempted to do it and it’s not easy. And some of the things that come up are things which, you know, if you have a granular knowledge of the area, might be secondhand nature, like which title company to go to. Right. You know, in many cases, people can use someone that’s near them, that’s licensed in another state and so forth. But ⁓ I’ve come up against these types of barriers, you know, or where, you know, ⁓

local seller wants to go with someone who’s in their neck of the woods and then I really have difficulty corralling the moving pieces when they’re out of state, right? Being that you’re doing this remotely, how have you dealt with some of those issues as someone who’s wholesaling remotely?

Nate Hirschberg (18:10)

Yeah, it can definitely be challenging. And I think a lot of people downplay it. hear, I can just go nationwide and think it’s going to be easy.

I think really for us, been one, establishing local boots on the ground. So we use real estate agents as a whole in areas that we do a lot of volume in. You got to make it advantageous for them. Hey, like we’re going to be sending you volume. There is going to be times that we might need you to go by and grab pictures of the property for us. Maybe drop off some documents, have them authorize them for us. We use investor lift. So we’ll sometimes use that data set for like closing attorneys. They do a really great job.

I think the biggest thing that we found is setting clear expectations with the seller as soon as we get in contact with them. Like, here’s who we are, having a really polished webpage, having five star reviews, and force sharing that information with them so you can make them feel comfortable as opposed to like just hoping no one goes in person.

Dylan Silver (19:09)

Yeah, that’s a great point. ⁓ One of the things that I’ve noticed, you mentioned Investor Lift. It’s an amazing tool, right? But, you know, that’s for folks who aren’t using these types of tools, you’re competing with people who are doing this at scale. And it becomes, you know, very challenging because if I’m an out of state wholesaler and I’m, you know, using ⁓ some skip trace list that I bought offline and someone else is, you know, using what’s the highest level tier in Investor Lift? You know what I’m talking about?

Nate Hirschberg (19:39)

hotel mode, yeah.

Dylan Silver (19:39)

Yeah,

someone else is using cartel mode and investor lift. It’s going to be challenging for me to compete with with that person. so, you know, yeah, remote wholesale is great if you can do it. But the flip side is that there’s a lot of people, especially now, who are aware of what wholesale is versus, you know, 10 years ago, say. And so now there’s just more people, there’s more competition trying to get in the game, which I’m sure you’ve seen as well. We are actually coming up on time here, though, Nate.

Nate Hirschberg (20:05)

Bye for now.

Dylan Silver (20:08)

any new projects that you’re working on and then as well what’s the best way for folks to get in contact with your team.

Nate Hirschberg (20:14)

Sure, yeah, we have one new project. be…

It’s going to be a really awesome deal. We’re taking a plot of land, subdividing it and putting some really nice module at home. Some Clayton, Clayton homes on there that are HUD approved so people can get financing for them. And that’s going to be an exciting project, offer some actual affording affordable, nice housing in the area. So I’m excited for those. If folks want to reach out to me, ⁓ Instagram is probably the best way it’s at the REI Nate. ⁓ And just hit me up, send me a message any way I can help. I’d love to.

If I can’t, also tell you that too.

Dylan Silver (20:49)

Nate, thank you so much for coming on the show. Thanks for your time today.

Nate Hirschberg (20:53)

Appreciate it, man. Thank you.