Experience with new program for out of state fix and flipping?

Question

Hi, are there any members of Martel's new FlipSystem program that can share their experience? I know his turnkey business is good so I imagine this program may be good too but out of state fix  and flipping is a lot different than turnkey rentals. The program looks to set you up for success with an experienced team, deal acquisition, and coaching.

Some of my concerns are:

1. There is no cap on members so how will all of us get good deals? Will we end up just stepping on eachothers toes?

2. Is the estimated $10k-20k "profit" likely on a property that you are all in $100k (buy + rehab) likely in Cleveland or Detriot?

3. The idea is to flip these properties to out of state turnkey investors? Is this a practical business model with rising interest rates and prices still high?

4. Are these midwest markets saturated with investors?

5. Is it wiser to flip locally with way more expensive homes but where I can have a little more control and know the market right now?

Any advice or help would be great from anyone. Thank you!

Brad Taylor · Answer

The cost is $15k, but you are getting a pretty impressive CRM with lots of automated tasks and deal management.  There are vetted RE people throughout the deal process to exit, so these folks already understand what you are trying to do, or what the system needs to do to work rather (if I understand what is being offered).  I mean, I see it as kind of like buying into a business...you are going to have to do some work, but you also can operatednearly anywhere and have some systems in place that would otherwise cost you time, tens of thousands of dollars to create, and expertise. Theoretically, this allows you to leapfrog all that and buy into a flipping business directly.

Becca F. · Answer

@Chris Nerio

I did get on a call with two people, one for Martel Turnkey and another for FlipSystem. I considered buying their turnkey rental but I wasn’t familiar with their markets (mostly Ohio, Detroit area and a few Memphis homes). bought in the Indianapolis metro area since I knew that area well (used to live there). For FlipSystem I couldn’t justify spending the $15,000. I would just use that money towards a down payment  - I work with a real estate agent who does deals with many investors and has had a few off market properties (I know many investors don’t use realtors but I prefer to).  I’m looking cautiously at doing fix and flips with an exit strategy of holding the property as a rental if it didn’t sell. Since I only had the one call with FlipSystem she didn’t mention taking out a hard money loan. Interest rates with HML and private lenders are higher than bank loans. Did they explain HMLs to you? Did you decide to sign on with FlipSystem?

Bob Stevens · Answer

You are working much to hard. ALL you need to do is connect with those that provide properties and allow them to handle all. The chances of you getting a great deal in Cleveland without cash is not going to easy, nearly impossible. Not trying to discourage you I just tell people what they need to hear vs want . Cleveland is one of the most competitive markets in America, all cash buyers as is, close asap vs a loan, inspections appraisals. Do you have the 100k cash to even start ?

Bob Stevens · Answer

See my responses in bold

1. There is no cap on members so how will all of us get good deals? Will we end up just stepping on each others toes? YOU cant, get the great deals, I can ( and others) as we have a team there for years. Also nobody is going to give away the great deals as we are doing all the work. Good 10% - 14% net caps ( based on cash purchases )  sure but the super great ones no.

2. Is the estimated $10k-20k "profit" likely on a property that you are all in $100k (buy + rehab) likely in Cleveland or Detriot? Yes or more. I just sold a 3 br , I was all in about 63k, sold for 105k, rent will be 1400, value about 125k so win win right. YOU cant ( highly unlikely) get deals like that.

3. The idea is to flip these properties to out of state turnkey investors? Is this a practical business model with rising interest rates and prices still high? Do you have out of state buyers? Again, nobody in Cleveland ( I know most of the " players " ) is going to give away the super great deals, why would they? Though many believe 10-15% net cap with equity IS a super great deal and are happy.

4. Are these midwest markets saturated with investors?

5. Is it wiser to flip locally with way more expensive homes but where I can have a little more control and know the market right now?

Any advice or help would be great from anyone. Thank you!

I hope you appreciate my direct responses,

All the best

Erica Allen · Answer

@Brad Taylor have you jumped into flipsystem? If so, early observations?

Thanks!

Erica Allen · Answer

@Chris Nerio Hi Chris. One question related to determining the value is; what’s the cost to buy into the program? Do you know what that cost is yet?

Chris Nerio · Answer

No, I planned on using a hard money lender which is what the program suggests I use. From what I understand, the prospective properties are found on MLS and rehabs that cost between $20-30k so it's not full gut jobs. Its more cosmetic and anything major that would show on a home inspection would be repaired or replaced. No worries, I rather someone not sugar coat it. Thank you!

Bob Stevens · Answer

In correct, the deals are not from MLS. 99% of the deals I have done are off market. We do not take commission; The purchase price has our " fee" built in. Aso all of the flips I have done are with cash buyers, If you are not a cash buyer it will be nearly impossible for you to get good deal, too much competition.

All the best

Experience with new program for out of state fix and flipping?

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