Finding my Rock Star Team..

[Liz Cole]

Hello! Can you suggest a Podcast or Webinar or give me your thoughts on setting up a team to do flips? The area I'm interested in is 3 hours from where I live. 1. Who do I need in my back pocket and as @David Greene would say:, How do I find the Rock Stars? ---- RE Agent ---- Contractors --- HML and PMLs, ETC. 2. How do I QUICKLY analyze a deal when the various BP calculators make Dumb ME enter the data on what things will cost? lol 3. Do I trust the listing agent on a property to tell me the truth? Or am I smarter to find my own person? Thanks for the advice!

[Jay Hinrichs]

I cant think of a more risky venture as this.. going to be a lot of folks lose a lot of money trying this their first time out I don't care what rock star team you put together.. CAUTION this is not as easy as anyone makes it sound..

[Account Closed]

Originally posted by @Liz Cole:

Hello! Can you suggest a Podcast or Webinar or give me your thoughts on setting up a team to do flips? The area I'm interested in is 3 hours from where I live.

1. Who do I need in my back pocket and as @David Greene would say:, How do I find the Rock Stars? ---- RE Agent ---- Contractors --- HML and PMLs, ETC.

2. How do I QUICKLY analyze a deal when the various BP calculators make Dumb ME enter the data on what things will cost? lol

3. Do I trust the listing agent on a property to tell me the truth? Or am I smarter to find my own person?

Thanks for the advice!

 I agree with @Jay Hinrichs that you are looking at this entirely incorrectly. Why go 3 hours away on a hunch? That is a daily drive until completion or living in the property while you renovate or staying in a hotel. Arlington is just 30 minutes away. Find a project there or along I-5.  Any seasoned investor would say "no" to a 3 hour away project. 

The rock start team you are asking about will find you when you have a property that is likely to be profitable. They aren't in it for the ego. They want profit. You have to be able to show how it will profit them. There are things you still have to learn like Washington has an onerous transfer tax of nearly 2% depending on municipality. That alone adds about $6,000 cost to the project on to a $300,000 House (if you can find one). If you want to be successful, hitch YOUR wagon up to someone already doing projects by joining their team for one or two and learn the ropes first. Or, front the money and credit to a project that is local.

[Liz Cole]

@Account Closed Thank you. 

I'm fully aware it's Ri$ky. I have the distance issue resolved already. I don't have the money to invest in my expensive area. You can barely buy a trash can for $250K. What I don't have resolved are trust issues regarding contractors, realtors that are investor savvy/friendly. etc. I didn't feel it was necessary to tell everything to get a little positive advice. I thought someone could give tips on things to ask or look for.   Additionally, I accidentally found a deal while half-heartily looking that has issues but would give a decent flip return.

[Jay Hinrichs]

Originally posted by @Liz Cole:

@Account Closed and @Jay Hinrichs Thank you. 

I'm fully aware it's Ri$ky. I have the distance issue resolved already. I don't have the money to invest in my expensive area. You can barely buy a trash can for $250K. What I don't have resolved are trust issues regarding contractors, realtors that are investor savvy/friendly. etc. I didn't feel it was necessary to tell everything to get a little positive advice. I thought someone could give tips on things to ask or look for.   Additionally, I accidentally found a deal while half-heartily looking that has issues but would give a decent flip return.

just giving you reality.. long distance rehab is about as risky as it comes.. especially for a first timer.. I know it seems to be soup de jour and there is a book about it or pod cast but its easily talked about but rarely executed by those that are just starting out..

I know I have had my butt handed to me a few times..  

[Liz Cole]

@Jay Hinrichs   Well it takes me 20 minutes just to get to the grocery store, so I didn't really see 3 hours as a big deal, more like an inconvenience. I was looking further away for a market that was more affordable but did feel that was more than my bravery gene could handle. I'm also in a position to move if I deemed it necessary. I do have an old school background in real estate. I was a top producing agent in Mesa AZ during the 80's (that was due to my ability to bird dog great deals for first time home buyers). Owned and worked in a drywall company for 10 years with the EX. Did a rehab on a house I owned a few years ago. It's just time to jump off the cliff and make my dreams turn into my goals. And, I am aware RE Investing is not for the faint of heart and most quit before they get started. Been there too. For me it the unknown. Obviously, I want and need my first couple of deals to go well. Not a lot of room for error and the error is the contractor stuff. Not being familiar with what things cost to do  now a days. 

[Jason D.]

If you want to find people who's goals align with yours, go to local REI meetings in the area, ask for recommendations. The important thing is to go network in the area you are looking to invest in. That's what I would do, long before looking for deals.

[Julian Sibley]

@Liz Cole the bigger pockets podcasts are a great resource. You will likely get some more traffic in this thread if you mention what area it is you are interested in.

If you want to do flips first thing you need to do is figure out your financing (traditional, hard money, private money, etc.). Next you want to get a good agent (or become one) so you can tell them WHERE you will buy your properties and WHAT type of properties you want to buy (how many beds/baths, in the suburbs, on the back roads, split level, ranch style, how old, etc.).

Next you want to get very good at analyzing deals, try to avoid doing it quickly. Remember that profit is made in the purchase, not the sale. Generally speaking the most you will pay for a property should be "X" where:

"x" = sales price - fixed costs - profit - rehab costs

For your sales price: pull comps and do a market analysis to get an idea of what your after repair value will be (price you will sell the home for after all repairs).

fixed costs: This includes purchase costs, holding costs & selling costs (inspection fees, closing costs, lender fees, mortgage payments, property taxes, utilities, insurance, commissions, closing costs on the sale, home warranty, etc.).

Profit: How much is reasonable based on the amount of risk you are taking/ amount of time your capital will be invested?

Rehab costs: The goal here is to get in the ballpark (maybe 10-20% high/low). Once you have a couple deals under your belt it will get easier, but as long as you're in the ballpark you can get an accurate renovation estimate once the home is under contract & you get bids.

I'd recommend meeting local investors. There's a local meetup on the 4th Monday of every month in Marysville @ the Bob's burgers @ 7PM through the Cascadia Investors Alliance. You can pick their brains, hear what deals they're looking for/finding in this market and get recommendations for help w/ building out your team

[Liz Cole]

@Julian Sibley  Thanks much! I asked about finding a local RE group in another thread, but didn't get any response so thank you for the information on the Marysville meeting. 

I've talked to a couple RE Agents about what I want to focus on. I've been looking for a few months at the MV area North of me. Everything seems so expensive around here, which is why I started researching a few weeks ago on area's further away. 

Been getting on the webinars and listening to the podcasts, reading etc. I understand the formulas pretty much, just NO confidence in my guessiments of what things will cost. :) @Account Closed had a good suggestion saying:

I should have thought of doing that a long time ago. Coincidentally, I heard that same thing on a webinar today. 

My instinct is to do a couple reasonable flips, then find a BRRRR, rinse and repeat.

Thanks again!

[Jay Hinrichs]

@Liz Cole  one thing to keep in mind there is a reason banks generally wont lend to anyone who does not live within an hours drive of their project.. they have learned over time the risk involved when their borrower is not on the spot.

I get these requests all the time.

One lady calls me and says she has a flip in Chico.. I then Ask were do you live she says Minniaplois  she went to a guru seminar and when folks complain that its too expensive where they live the gurus then go on to say then just go where its not.

so how am I as a lender going to trust a borrower who has basically never done this lives 6 states away.

I just cringe at the latest BP pod cast and book advocating this.. can it work sure is it fraught with a lot of economic danger not discussed yes in deed.

[Johann Batista]

Liz Cole Congratulations on your decision!!! As a newbie I can suggest you go to that area and “get your boots on the ground”. This week I took a 6 Hour drive to my preferred market area. As you stated I too live in a area where it is not financially possible to start off and get the first few deals off the ground. Some may suggest otherwise, however this is a personal decision and only You can make that!!
During my visit to my area I went to local restaurants and asked staff if they knew people in the business. Needless to say I received a contact for a local handyman.
I also went to an auction where I met some actual investors and got a few phone numbers.
Then in the evening I went to a bar! Yes a bar!! And guess what I found?? Some contractors!!
Despite my different approach to finding a team I can say it was a successful 2 day trip. Came back home with
1. Local Real Estate Investors contact
2. Local licensed agent
3. 3 different contractors in the area contacts
4. A local handyman

May not be the conventional approach but took advantage of my Womanhood and got the information I needed.
And before anyone gets the wrong idea let me make this clear, I was not mingling with these individuals it was completely business talk; as I was with my 10 year old daughter during all of this( except the bar)

[Jay Hinrichs]

@Johann Batista Ok finding your contractors at the bar that is a new twist.. :)

[Johann Batista]

Originally posted by @Jay Hinrichs:

@Johann Batista Ok finding your contractors at the bar that is a new twist.. :)

Didn’t actually go for that reason, but they were there so why not introduce myself and ask? It’s amazing how people react when they are approached unexpectedly in a nonconventional setting ;) 

[Liz Cole]

@Jay Hinrichs  I get what you're saying, and good to know about the lender issue. I will make sure to ask about that as I start talking to lenders. I was looking further away, but decided it was too scary and did decide to look closer to home. As I mentioned earlier, I could move if I deemed it necessary and actually figured I would rent a studio in the area. My plan is to buy a multi-family too. I would live in a unit. 

Also, just so you know, because it seems like you might think I watched or read something about investing in distance areas. I am aware of David Greene's theory, however I have not watched or read his stuff. He is visiting Brandon in Hawaii and has been on a couple of the webinars recently. He mentions it briefly there.

I'm done believing it's too hard for me to figure out. I'm smart, creative and a hard-worker. I'm doing it. 

I appreciate the time you've taken to converse.

[Jay Hinrichs]

@Liz Cole  yup seeing a lot of that and I know its not popular to go against the establishment but I simply do not agree with that pod cast and book.. it worked for the author since he is a real estate professional with a lot of connections.. but its just another form of Guru trying to preach it to those with NO experience .. like its a piece of cake.. really risky.. like I said.. but I realize they need to sell books and pod casts..

[Liz Cole]

@Johann Batista I love the creativity! Thank you for your input. Another idea I heard to find contractors was to hit Home Depot or Lowes type places EARLY in the morning and give and get business cards... you know those contractors are bushy tailed and go-getters.

I haven't been to an auction in a long time. I think I will do that. 

Thank you for your positive approach.

[Russell Brazil]

Originally posted by @Jay Hinrichs:

@Liz Cole yup seeing a lot of that and I know its not popular to go against the establishment but I simply do not agree with that pod cast and book.. it worked for the author since he is a real estate professional with a lot of connections.. but its just another form of Guru trying to preach it to those with NO experience .. like its a piece of cake.. really risky.. like I said.. but I realize they need to sell books and pod casts..

 Jay...most simply can not weigh risk properly. I think I actually said that on the podcast. Flipping is on the riskier end of the real estate spectrum. Combined with out of the area investing which is also high risk and you typically have a recipe for disaster. How many people nationally probably do long distance flipping with consistent success? A few hundred people out of 350 million? J Scott does it, but he probably has a thousand flips under his belt, and can absorb the risk of a flip going sideways.

[Jay Hinrichs]

Originally posted by @Russell Brazil:

Originally posted by @Jay Hinrichs:

@Liz Cole yup seeing a lot of that and I know its not popular to go against the establishment but I simply do not agree with that pod cast and book.. it worked for the author since he is a real estate professional with a lot of connections.. but its just another form of Guru trying to preach it to those with NO experience .. like its a piece of cake.. really risky.. like I said.. but I realize they need to sell books and pod casts..

 Jay...most simply can not weigh risk properly. I think I actually said that on the podcast. Flipping is on the riskier end of the real estate spectrum. Combined with out of the area investing which is also high risk and you typically have a recipe for disaster. How many people nationally probably do long distance flipping with consistent success? A few hundred people out of 350 million? J Scott does it, but he probably has a thousand flips under his belt, and can absorb the risk of a flip going sideways.

 Exactly so now you have this BP podcast and book about how to do it remotely just going to be some heart ache here no doublt about it.. you will have folks all charged up to create their rock star teams only to end up on the rocks.

[Account Closed]

Originally posted by @Johann Batista:

Liz Cole Congratulations on your decision!!! As a newbie I can suggest you go to that area and “get your boots on the ground”. This week I took a 6 Hour drive to my preferred market area. As you stated I too live in a area where it is not financially possible to start off and get the first few deals off the ground. Some may suggest otherwise, however this is a personal decision and only You can make that!!
During my visit to my area I went to local restaurants and asked staff if they knew people in the business. Needless to say I received a contact for a local handyman.
I also went to an auction where I met some actual investors and got a few phone numbers.
Then in the evening I went to a bar! Yes a bar!! And guess what I found?? Some contractors!!
Despite my different approach to finding a team I can say it was a successful 2 day trip. Came back home with
1. Local Real Estate Investors contact
2. Local licensed agent
3. 3 different contractors in the area contacts
4. A local handyman

May not be the conventional approach but took advantage of my Womanhood and got the information I needed.
And before anyone gets the wrong idea let me make this clear, I was not mingling with these individuals it was completely business talk; as I was with my 10 year old daughter during all of this( except the bar)

 Okay Johann, so you met some "handymen" or "contractors" at a bar. What kind of skill set do they have? Will they show up at the worksite *every day* to get the job done? After you give them 50% down to buy materials, will you ever hear from them again or is it a six hour drive to track them down - drinking at the bar? Are they licensed? Are they bonded? Do they carry insurance? Does everyone they have working for them have a solid level of expertise? Do they do work by pulling permits or just slopping things together? Once they put the sheet rock on the bathroom "water" wall because of the leak they had to fix, which was by the way an "unexpected additional $5,000", how do you know if the joints they soldered are "good" and the plumbing, electrical meet code? If the wall starts leaking again during the "opens" when you try to sell, that is a selling "feature" you don't want. When the project is 3 weeks, then 4 weeks, then 5 weeks overdue and way over budget, will you still try to manage this from 6 hours away?

I am "on-site" or my Joint Venture Partner, in whichever city I am doing a project, Seattle, Phoenix, Austin, San Antonio - it doesn't matter, is "on-site" for all of my projects. Every day has new ways for a contractor to delay, over run the budget, not show up. There are questions to be answered, faucets to be selected, inspectors that have to be met, and on and on and on. Don't underestimate the power of your presence to keep the project "on track" and "on budget".

[Liz Cole]

@Account Closed

I evidently hit a "nerve" with what I saw as a light-hearted wink at finding the right people to work with on a project.. i.e. Contractors (especially), RE Agents, etc. I heard it called "Rock Star Team" on a webinar that Brandon did the other day about Creating a Goal and a Plan. I have no intention of going to another State or even across mine. 3 hours or less is not that far. (My dentist is a three-hour drive). If I am doing a flip, I'm going to stay in the area if it's over an hour drive. I used to run a drywall company with my EX. 

I have not read the book or watched the webinar. lol Only know what you're talking about because it was mentioned on the other webinar (barely) .

[Liz Cole]

And really what I wanted from my original post was interviewing techniques or tips on finding solid people to work with. Even if people are recommended to you, I feel it's important to ask the right questions, getting references, etc. I was too "flip" for my own good. 

[Jeremy Maher]

Yes most contractors are unorganized but not all of them. We use Infusionsoft and it does a great job of running the business along with other items. 

[Jeffrey Stasz]

@Liz Cole the long distance major rehab is how I started. My first project was in Hudson NY while I was living in Brooklyn. It was about a 2.5 hour drive. 

It's not fun to hear but please heed the advice of @Jay Hinrichs and others when they say this is a much much riskier and harder proposition then you might think. 

I did my first project full time and it still almost killed me. If you are going to proceed you should plan on being full time on site no less then three days a work week. I started a gut renovation in Feb, and slept in a sleeping bag on the jobsite and showered at the gym. 

To get the project completed you'll need estimates from people who will want to "just stop by". The really good and talented folks are busy and are not going to be interested in setting up an appointment three weeks out. Construction and corporate America are different worlds. Don't expect a team of construction pros to suddenly re-arrange how they run their business because it does not suit your schedule. Also, on your first one you can't expect a GC to just run the job for you. She is going to have a million questions that you'll have to answer. Those questions will arise randomly throughout the day and will often need to be answered before work can continue. Ask yourself: am I willing/able to do a 6 hour roundtrip on a random Tuesday to answer a question about window rough opening sizes. No, you can't resolve it over the phone. No, they can't send you a picture. You will need to be boots on the ground. 

With your first flip make sure there are gobs and gobs of money to be made. My first job took twice as long to complete as expected, cost twice as much to build as expected and sold for less then expected. I still made over a 100k but that's because I picked a project that was home run no matter how much I tried to mess it up. 

All that said. Stay positive and optimistic. It's a great business and it can be a really fulfilling way to make a living. After my first project I moved to Charleston SC and went all in on the building and investing business. My construction company is closing in our first million dollar year and my investment fund is oversubscribed. Success can be had, just don't let some huckster tell you it's going to be easy and smooth. It's hard work. Satisfying. Creative. Lucrative. But still HARD. EFFING. WORK. 

Good luck and please feel free to DM me if you have any questions or want to run something by me on the phone. @Jay Hinrichs has been super generous with his time for me (thanks Jay) and I'd be happy to pay that forward. 

[Ola Dantis]

@Liz Cole Hey Liz, I couldn't agree more with @Jay Hinrichs . 

Flipping for the first time and you are 3 hours away is no doubt possible; however, I think you may want to step back a little bit and really really think—why am I thinking of getting in real estate investing? 

• What does success look like for me? 
  
• Does the asset class I choose match those WHY goals

Sometimes, it is ok to take a step back to super immerse yourself in the learning phase as when you do that in the front end some of the answers will become apparent fairly quickly. 

In addition, Real Estate Investing game is certainly not as easy as many make it out to be, we just listed our last project, which was 10 mins away from my house, and I can tell you — I've expended emotional, financial, and sometimes physical outputs all through the game. You must be sure you have a strong reason (WHY) you are doing this stuff. 

You see how I refer to it as a game, it's because that is exactly what it is.  

Now, I do have a solution for you Liz.🤗

Find and vet a flipper in your area, and you can try to partner with them by adding value. You must have one of the two things or maybe both: TIME | MONEY, so offer that to this flipper and learn alongside them. 

This might be another approach for you. 

Hope this helps, Liz. Goodluck. Thanks! - Ola 

[Johann Batista]

@Account Closed like myself has Thought this out for a while and has a plan for how to handle this investment. Liz, I planned on going to Home Depot and Loews while I was at my area, however due to weather conditions I opted out. But that is definitely a great idea!! 

[Jay Hinrichs]

Originally posted by @Johann Batista:

@Account Closed; @Jay Hinrichs; @Jeffrey Stasz

It is amazing to me to see so much negativity towards somebody’s plan. The post was about ways to find a team, not how a flip goes downhill.  In any project it is a risk, despite how far you are. A 6 Hour drive is by choice because it could simply be a 45 minute flight. The drive was by choice and for personal preference.  

I’m sure there are horror stories about how people are on site everyday and things go wrong. But to simply discourage people from doing What they want is just wrong! This is why long distance investors are making millions, because there are so many individuals scared to take a risk simply because of how many miles away a project may or may not be. 

You Men gave great advice in some ways things can go wrong, yet skipped the actual intention of the post which was for ways to find a great team. I’m pretty positive that @Liz Cole like myself has Thought this out for a while and has a plan for how to handle this investment. Liz, I planned on going to Home Depot and Loews while I was at my area, however due to weather conditions I opted out. But that is definitely a great idea!! 

there is a difference in negativity and reality.. that's all I am pointing out.. full blown rehab construction is fraught with Risk.. we deal with it every day.. even new builds guys make boo boo's  I walked in one of our new builds same floor plan we had built numerous times and the window is too low won't pass inspection.. cut it out.. cut out siding replace replace siding patch the dry wall re paint.. etc etc.

The other major thing is that rehab contractors are not new build subs.. your subbing each trade out .. your rehab contractor is usually a different breed and one that can actually run a whole job for you is usually doing work for owner occs and  charging for it.. what YOU need to pay to make a profit brings you down to the guys and gals that need utmost supervision..   But time will tell...   can it happen yes  I just think this irrational exuberance of pod cast and encouraging people that they can do this from their barcolounger needs to be balanced with reality that's all.