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All Forum Posts by: Henry M.

Henry M. has started 11 posts and replied 436 times.

Post: Charging for rehab rather than flipping property

Henry M.
Posted
  • Specialist
  • San Antonio, TX
  • Posts 462
  • Votes 294
Originally posted by @Mark Ho:

I am considering offering property owners to rehab their properties and charge for the rehab project. My concern would be after rehab done and owner likes it so much and doesn't want to sell.  Any advice on this idea? 

Thanks in advance.

Mark

 Mark Ho,

I don't think that is a bad idea, however, I would charge a percentage vs. a flat rate. In regards to your concerns, you should put together an MOU regarding the terms of your agreement with performance clauses protecting both parties, and eventually lead to a JV agreement.

There are several other methods to protect yourself as well as the owner/seller, however, too lengthy to write about.

Don't be too greedy, otherwise it will limit your relationships and longevity. 

Let me know how it goes.

Just my two pesos.

Big Henry

Post: Getting my team together/ What I have done & what do I do now?

Henry M.
Posted
  • Specialist
  • San Antonio, TX
  • Posts 462
  • Votes 294
Originally posted by @Michael Whitener:

What I should do now...

I am asking you guys that question. 

Any advice and pointers would be greatly appreciated.

Thanks

Mike


Michael,

You have a great base... Just like wrestling is to MMA, it is a great foundation to bleed into other aspects of fighting. Or in this case, real estate.

You seem to have experience in the middle game, but will need to tighten up your beginning and end game.

Keep learning and plugging away. We here for you.

Big Henry

Post: Getting my team together/ What I have done & what do I do now?

Henry M.
Posted
  • Specialist
  • San Antonio, TX
  • Posts 462
  • Votes 294
Originally posted by @Brian Gibbons:

Network saves legwork.

Brian,

Did you make that up?

You should coin that... Lol.

Big Henry

Post: The Truth about Wholesaling!

Henry M.
Posted
  • Specialist
  • San Antonio, TX
  • Posts 462
  • Votes 294
Originally posted by @Natasha M.:

@Will Barnard 

 What's your opinion?

Natasha,

Keep an open mind and allow the deal to come to you. If the deal warrants more profit in rehabbing than wholesaling, then do so... If you find a property where you can acquire and hold, then do so... Remain open and allow the deals to flow vs. you setting your mind to just one aspect of real estate.

Just my two pesos.

Big Henry

Post: Buy and Hold, Does It Really Make Sense?

Henry M.
Posted
  • Specialist
  • San Antonio, TX
  • Posts 462
  • Votes 294

I've done almost every aspect of real estate and do prefer both fix & flip and buy & hold... I've generated from $5K to $55K in assignment to wholesale deals... I was bringing in $10K per month before the crash... Sold most of my properties... AND must admit lost a couple. 

Hands down, I miss my buy and holds... However, If I am able to pick up a property via little to no money down and break even throughout each year... I'm okay with that. But I do prefer below median homes as rentals. I made more profit in lower income areas vs. higher income areas.

Those who say buy & hold is the way to go, are 100% correct. So many advantages, especially when having multi-family properties.

For me, Wholesale to Fix & Flip, is truly only to fill in the gaps. 

Each have their advantages. But if I was forced to choose only one method, it would definitely be to buy and hold, hands down.

Especially, when you do it right.

Many on here have great rationales for either/or. But in my opinion, you don't need as much money to acquire a property to hold, where as flipping, you need some skin in the game or OPM.

Great debate and arguments here on this thread - Very proud of most of the input from our multi-dimensional community. 

Just my two pesos.

Big Henry.  

Post: The Truth about Wholesaling!

Henry M.
Posted
  • Specialist
  • San Antonio, TX
  • Posts 462
  • Votes 294
Originally posted by @Matthew Carr:

@Will Barnard

 Are there ways that I can learn the value of my local market before I start wholsesaling, as well as be able to accurately give estimates for rehab costs before I start wholesaling?

Matthew, 

You may want to read this thread as I have answered these questions in detail. 

Big Henry 

Post: The Truth about Wholesaling!

Henry M.
Posted
  • Specialist
  • San Antonio, TX
  • Posts 462
  • Votes 294
Is Patience Really A Virtue?

Your Time Is Valuable - That's Exactly Why You Should Spend Four Minutes Reading This Article


Time is our most precious asset and it seems that no matter which direction you look, there is a product or service geared to saving you time or helping you accomplish results faster. Patience is the virtue we exercise to take advantage of the time we have.

While I would love perfect abs in six minutes or to become a millionaire in 90 days, it simply isn’t going to happen. So how do you balance time and effort and differentiate between patience and wasting time?

These are all questions that, despite not being asked often or talked about, can drastically change your perspective, and help you understand why there really is no substitute for time.

Think about the six minute abs example, as working out usually pertains to everyone reading this. The action takes 6 minutes, but the results won’t appear in only six minutes.

The idea is that the action itself is geared to save you time so you don’t spend one hour in the gym, when you can spend six minutes in front of your TV. While it may seem gimmicky at first, it really isn’t, as it is rather a trick played on your mind.

Since we are a society focused on instant gratification, we simply want to believe that the results can be obtained in just six minutes. The idea of the advertisement is to focus on how little time can yield big results and seems very convincing to people who are already limited on time and short on patience.

The reality of the situation, however, is that six minutes’ worth of ab exercise alone is not enough to get you in shape, but consistency in exercise balanced, with cardio routines and a diet, may actually leave you looking like a television fitness model.

While patience is a virtue, waiting around doing nothing certainly isn’t the answer to finding success, in business or in life. The key to balancing time and functionality lies with the actions you take and the focus of your life being driven by your habits, rather than by the results.

The reason your actions and habits matter more is because they are directly in your control, but the results you seek are more or less a by-product of that. Dwelling on the results will not change them but tweaking your efforts, actions, and habits certainly will yield different results, particularly if you can be patient long enough to see your hard work pay off.

The balance of patience comes from your ability to perform a strong set of continuous actions in the right direction, which will yield results over time rather than after each action itself.

When chasing success, money, or entrepreneurship, the same elements apply, as you must be able to stay the course and focus on daily routines which, when combined, will yield a higher level of reward. Not to mention, effective time management is one of the necessary skills of a gentleman.

The element of patience comes into play when you are able have a clear understanding that what you perceive to be the length of consistency may not be accurate. In other words, if you believe that working hard for six months will yield a certain payout or result and are willing to only give it six month, then perhaps your understanding of how to leverage time needs to change.

You must understand that time is very precious and that it must take its course regardless of your personal belief or the goals you set up earlier on, which is why setting deadlines work but setting results-driven timelines don’t.

Instead, invest in timelines that are focused around efforts and habits, things that are fully in your control and in your ability to change. Here is a crisp and easy to understand example.

Here is how most people set a goal:

“I want to be a millionaire by 30.” — That is a goal that associates time with results, when neither variable is completely in your control.

On the other hand, a better and more grounded goal might be:

“I will form my first business by 25, and have at least 100 clients by 30.”— While both goals create an opportunity to be a millionaire by 30, this one enables you to measure time through your actionable efforts rather than by their results. Real men orient their lives around what they can do, rather than focusing on what they can't.

Once you understand that, regardless of your expectation of how long something should take, your efforts should never be focused on time itself, but rather on the action you can control, without ever forgetting that there is no substitute for time and patience.

Pejman Ghadimi is the author of the Third Circle Theory, a powerful book which explains how some of today's top visionaries are made. Since the age of 25, Pejman has been financially independent and has dedicated his time to bringing Secret Entourage & Secret Academy to life, a unique platform which focuses on helping motivate, educate, and improve the lives of young entrepreneurs worldwide.

Post: BP saved me $30,000.00 on my most recent Single Family purchase!

Henry M.
Posted
  • Specialist
  • San Antonio, TX
  • Posts 462
  • Votes 294
Originally posted by @Jay H.:

Read all the Hubzu post regarding how to bid, and I will PM the secret sauce to individually (you will know why when you see it)

 I'm ready;)

Post: The Truth about Wholesaling!

Henry M.
Posted
  • Specialist
  • San Antonio, TX
  • Posts 462
  • Votes 294

Possible Rehab (Fix & Flip) or Wholesale Deal:

So I had a veteran Realtor speak to me about a pocket listing… He tells me the property is worth about $450K and the investor who purchased it is in over his head and out of money. The investor is into the property about $260K and is in need of selling the property @ $300K… Of course, assuming the cushion is to cover closing costs and Realtor commissions (once listed). He said, it was “As-Is/Where-Is”, and that there was plenty of meat on the bone for someone to come in with a crew and finish it out. There were cabinets and granite counters at property among other materials, but not installed.

I asked the veteran Realtor to send me the CMA and Data on the subject property and I would do my own due diligence and compare to his info.

I also requested a third party (another Realtor – a friend) to cross reference my numbers.

Let's take a close look at the (subject) property:
SUBJECT PROPERTY:

  • Type: Single Family Detached
  • Exterior: Brick, Siding
  • # of Stories: 1
  • Year Built: 1950
  • Recent Rehab: Semi
  • Bedrooms: 3
  • Full Baths: 2
  • # Parking Spaces: 2
  • Square Feet: 2,263
  • List Price: 300,000


Now let's dive into the numbers:

I believe the comps from my third party are very close in range with square footage and very similar to the subject property. Not to mention, very similar to my numbers and own research.


SEE TABLE “A”

I personally would use the Average SOLD price, which places this property at $123.94 per square foot. By multiplying this with subject property's square footage by 2,263, our total equates to $280,476 (ARV – AVG SOLD). Even if we take the high SOLD price per sq. ft. and multiply to subject's sq. ft., we total @ $361,492 (ARV - HIGH).

Now let’s look and compare the veteran Realtor’s numbers:

SEE TABLE “B”

This veteran Realtor's numbers and comps are unfortunately horrendous... A true disservice to his client and anyone new interested in investing. His comps consist of comparing a vegetable to a fruit. He truly cherry-picked higher priced and size comps, which were much further in distance... Not to mention, using the wrong average; Avg. Total Price vs. Avg. Price per Sq. Ft. on similar properties to the subject property.

He uses a two story with outstanding features @ $188.52/sq. ft. (SOLD @ $545K) to equate an ARV/List Price of $426,633 (affecting avg price on comps)... As for his second comp, it too is another discrepancy in contrast to subject property @ $145.37/sq. ft. (SOLD @ $438K)... Even if we used this comp, which is not a good comp, against the subject property, we would have an ARV of $328,972... Keep in mind, he is trying to list the house @ $300K in "As-Is/Where-Is" condition and is claiming there is "meat on the bone".

Finally, his third comp is about 90% closer to subject property @ $134.95/sq ft (SOLD @ $296,900) and realistically, that is where I see the true numbers, which is between $280K - $297K... Again, he is trying to list the house @ $300K in "AS-IS" condition... With a CMA (which he actually created for the seller seven months ago) resulting at a suggested list price of $426,633 (ARV).

This is what riles up investors. Now if he brings me other properties, do you think I will trust his product and method? He not only gave me a CMA he prepared for his client seven (7) months ago, which has errors in itself, but he did not take the time to retrieve the last three (3) to (6) months of appropriate and similar comps for the subject property he was trying to sell me.

Irregardless, I do my own due diligence with all properties that come across my desk that I am interested in, as should you. In this case, my first impression on this Realtor, is a bad one.

I thought I would provide just some limited insight (without pictures and other info to truly compare the CMA's to each other) to help those who are new to the business and understand why it is so important to understand the numbers and process.

In my opinion, if a wholesaler or Realtor for that matter, does not know the ARV, Renovation or Rehab Costs, and the Sales Price… I won't even entertain any property they bring to me.

Bottom line, please take heed of this lesson, learn your field and I hope this helps as this is just my two pesos.

PS: Practice, Practice, Practice

Big Henry

Post: San Antonio

Henry M.
Posted
  • Specialist
  • San Antonio, TX
  • Posts 462
  • Votes 294
Originally posted by @Account Closed:

really? wow. That's ok, I didn't mean offense or anything, it just shocked me when he told me that!

Joe,

 LOL! 

I will make it a point to visit one day, but I'm constantly out of town and busy as I am sure you know how that is... San Antonio is a beautiful city and has a very healthy real estate market... In one good way, there is separation on areas of town that provide opportunities in any given category or area for any investor. 

As for those beautiful missions, they were in my back yard, but running the streets when young just always seemed like just old buildings as I passed. There were many gangs and trouble always lurking just around the corner literally, so that's my excuse.

Btw, Joe, I was not offended at all brother. It is the truth. 

I love the history... Maybe not as much as Phil Collins, but I do love it.

So what do you do or where do you invest in San Antonio?
What area of town do you stay and are you a native to the city?

Big Henry