All Forum Posts by: William Allen

Over here at 7 Figure Flipping, we like to look at the real estate market by looking at the larger economy and what we anticipate to be emerging trends in 2022. Then we look at what skills you might need to cultivate now, if you are just starting your real estate business, to prepare for the upcoming market.

In order to predict possible trends, we have to examine where the market has been in the past few years. When we look back the pandemic contributed greatly to market trends by controlling supply chain issues and therefore keeping supply low as the demand for housing went up. We still see a major demand issue for real estate with a small supply.

We made our predictions based on what we feel is the biggest driving factor in the economy, and that is the customer/consumer feel. Real estate is one thing and macroeconomics is what drives everything. Does the current consumer feel flush with cash or do they feel like they don’t have any money?

A great way to observe consumer ‘feel’ is to watch the job market. How are people looking for jobs? Right now we are seeing trends of people shopping around, asking for higher wages, and taking their time choosing a job because it is an employee’s market.

What that says to us is the consumer feels like they have money and therefore are not motivated by fear to save their money or immediately secure getting more of it. In the middle and upper classes specifically, it feels like the money is there, people feel secure.

Is this going to hold in 2022?

Predictions:

1. Interest rates are about to increase

There is going to be some backlash on increased interest rates and inflation. Inflation will start to go up while income does not and people are going to see and feel their money not going as far.

1. There will be a decrease in the stock market

When inflation happens and interest rates increase, people will experience some fear and start adjusting their stock market portfolio to fit the feeling of uncertainty, of not having as much money. Though we don’t think the stock market will crash, it will dip. When people are scared they don’t spend as much money.

1. The real estate market will level off to a slow growth

We have seen a hike in real estate prices and it has been a steep and linear climb. What we think we will see is not a decline but more of a leveling-off in the pricing so the growth will not be as steadily upward. Prices will increase but more slowly.

If you want to get into real estate, what does this mean for you?

Here at 7 Figure Flipping, we are not fear-based and we know there are ways to make money in any market. You just have to find where you fit in the current or coming market according to your skillset.

If the stock market goes down in 2022, it is a great place and time for a slow growth real estate market. It may be the ideal moment to get investors pulling out of the stock market interested in more tangible, stable assets such as homes. In order to get those investors, you need to be an expert in the real estate market.

Our question is this, how are you positioning yourself to understand the business of the real estate market and become an expert?

If you want to set yourself up to be the expert later in the year when the expert is needed, you need to start your education now. One of the greatest ways to become an expert is through experience.

And it’s up to you to go out there and get it.

To find out more ways we can help you get started and take action, and as always for more tips and knowledge on real estate, check out our 7FigureFlipping podcast.

So you are thinking about quitting your W-2 job and diving into the life of a solo entrepreneur (real estate or otherwise), and you are wondering, ‘What do I do about Health Insurance?’

How to keep themselves and their family insured is a common concern for people leaving their day jobs to enter real estate. So I interviewed health insurance expert Jen Botting to dig into answers! Jen Botting has been specializing in health insurance for 22 years and before that she was in public affairs with the navy. She loves helping people and finding a plan that fits each individual’s specific needs by delving into their wants, needs, and finances.

This is what I learned….

As you head into the big complex world of insurance you most likely are going to head into ‘the marketplace’ to access your options.

What is the marketplace?

The marketplace is an insurance space where all the large insurance plans decide what types of plans to offer. Initially with the passing of Obamacare many of the real estate giants were offering a variety of individual plans however in more recent years there is really only one insurance agency, Blue Cross, supporting individual plans outside of smaller local providers. The state you live in therefore makes a huge difference in what you can access. Location is defined by the address on file, which generally is where you live.

Why is an individual plan more beneficial than marketplace options?

Most marketplace plans are slimmed down and offer really basic coverage while individual plans have richer options. Individual plans may also not be confined by enrollment dates depending on the state you live in. They have more flexibility and tend to be better plans all around.

So why would you go into the marketplace?

Going into the marketplace is beneficial if your income is low and you are looking for subsidies that offset initial monthly costs when your income is not secure. Of course, this comes out of your taxes later, but it is a way of shifting money around so that your monthly expenses are lower. So if you are someone who claims enough deductions on your taxes that your taxable income is really low this option might be worth it for you.

When you begin looking, how do you get started? What are enrollment dates, and can I get coverage if I leave my job between enrollment?

Open enrollment starts Nov. 15th and usually goes to Dec. 15th. This year the administration has extended to Jan. 15th. Does that mean you can’t get insurance again until Nov. 15th of the following year? Yes, it does, unless you have a qualifying event. The IRS defines qualifying events as everything from leaving or losing a job to a move. This allows for open enrollment as well as possible subsidies that you would access through your state government and tax system.

Now that you understand the marketplace, let’s talk about your top three options available in more detail.

Option #1: Cobra

Cobra is a federally mandated option for anyone who leaves their employer that allows you to maintain your health insurance plan for up to 18 months. You have to pay the full premium rather than the usual split with your employer and two percent is added on as a fee, so it is quite expensive however it will give you uninterrupted coverage.

Option #2: Find an Individual Plan.

There are individual plans on the marketplace that change state to state. Currently there are a lot of employees leaving their jobs and going out on their own. Individual coverage depends on age, health, location.

Pros and Cons: Cobra usually ends up being less cost efficient than unique individual coverages and plans that suit all your unique needs. However finding and navigating individual plans in the marketplace can be challenging and limited based on the state you live in.

Option #3: Create a Group Plan

You can create a group plan by association plans and working with or through a professional employer organization. These plans can be created when a group of people join together under an umbrella that gives them a market discount that allows individuals to access the plans according to their needs while still experiencing the reduced cost that companies normally receive.

Pro-Tip: If you have someone in your family with pre-existing conditions, Obamacare protects individual plans from pre-existing conditions. However some group plans outside of Obamacare will do the same.

So you’ve grown your business, are hiring employees and you aren’t able to offer benefits yet, what can you offer?

Small employers have a new option called Individual Coverage through a Health Reimbursement Account. This allows you the employer to set up an account for your employee called an HRA. You may have heard of an HSA or a Health Savings Account which is owned by the employee. An HRA or a Health Reimbursement Account, is owned by the employer who puts in and holds money for their employee to cover possible health medical expenses. An HRA account also counts as a tax deduction for your business if you use pre-taxable income.

You can also offer a stipend but the benefits of an HRA over stipend, is if you give your employees a stipend they will be taxed on the stipend whereas if you hold the money as the employer your employees are not taxed on it and you get the deduction.

What is Section 125 and what is the difference between an HRA and section 125 for your taxes?

Section 125 is a system an employer puts in place for their employees that allows them to play for premiums on a pre-tax basis.

An HRA is slightly better for the employer, but also cares for the employee because it is set up to be fully insurance compliant so it is not a taxable stipend.

If you are a small business ready to get group insurance for your employees for the first time, what do you do?

If you are feeling overwhelmed navigating the marketplace, go to an insurance agent that has you fill out a census. Then the agent goes out to the marketplace with the information and gathers plans for your company. Then you discuss the details with the agent to find the plan that is best for both you, the employer and your employees.

Does it cost you to hire an insurance agent?

No, insurance agents make money only if a plan is in place, and their commission is from the insurance company. This broker commission is written into insurance company premiums.

Trust me, when I say I know how daunting it is to navigate the marketplace, it’s because I have tried! Finding someone like Jen Botting to help you find the best plan for you as an individual or your company can save you significant money and help you get great coverage.

I hope these tips help reduce stress in a necessary but often challenging part of making the move from employee to entrepreneur!

For more tips on the nitty-gritty of business and life as a real estate entrepreneur, go to 7FigureFlipping.com!

Let’s talk about taxes. If you are already groaning, you are going to want to read this. The trick with taxes is creating a strategy a year ahead, executing your plan during the year, and reaping the benefits the following year.

Tax strategy is different from tax planning and tax execution. You start by creating your strategy a year in advance. This blog is a quick run down of tips you can research that will help you plan for maximum deductions next year.

Disclaimer: These are strategies from the perspective of a real estate businessman and not a CPA!

Tips to Consider as you Create Your Tax Strategy:

First things first. From a real estate standpoint the best thing you can do is get Real Estate Professional status. This allows you to utilize all the strategies I refer to in this blog.

1. 1. The business entity (LLC, S-Corps, etc), that you set up will determine your qualified business deductions and therefore your tax plan and liability. Depending on which entity you set up you can potentially write off your real estate education (which is normally quite limited). With certain business structures however, education falls under a growth and development deductible.

1. 2. Retirement plan accounts can be great deductions. Traditional 401k's can be written off on your taxes if they are from pre-tax money. (I use my IRA, 401k's and even our life insurance plans).

Pro-tip: Use the IRS’s playbook to find ways to make your taxes work for you.

1. 3. Your real estate can be extremely valuable if you know how to use it. You can calculate depreciations that save you big money on your taxes!

1. 4. For any companies that offer employee benefits such as medical, dental, etc., you can utilize Section 125.

1. 5. Cost segregation: single family rentals, Airbnb’s, apartment buildings, there are bonus depreciations through cost segregation. You can write off your passive gains as well as your active gains.

1. 6. You can shift some of your business income to a lower tax bracket income by hiring people who are not yet independent adults. Does your teen need a job? Put them on payroll!

1. 7. Qualified opportunity zone funds. Take some capital gains and invest to defer taxes for some time and possibly even have them forgiven.

1. 8. Have you heard of doing a 1031? This year was my first time taking profit from the sale of one property and investing it right back into another property.

1. 9. Section 179 is a hidden gem! This deduction can save you thousands with vehicles (cars, and even planes) bought for business use. We have an entire podcast just on this!

1. 10. What we tend to forget is that all of these professional investments we make on coaches, masterminds, and education that helps us, are actually tax write-offs and deductions. Take our Mastermind for example, if you structure your business entity and your tax plan right, you can write off half the cost of the program on your taxes. It pays to invest in yourself.

Pro-tip: If you plan ahead and invest in yourself early you can plan the deduction for specific years based on your tax needs. So buy your weekend seminar tickets Dec. 31 instead of Jan. 27th, get the write off the year before, and enjoy the benefits the following year!

You can do pre-planned spending with anything. Spend money you were already going to spend on marketing etc., but do it ahead of time so the deduction hits the current year. This is all part of your strategy when you create your tax plan. Research, strategize, plan, execute.

By the time tax season rolls around you will be resting easy, because you know you maximized your income by planning ahead!

Something that I like to do is go to events, read books, listen to podcasts and then distill them into the most useful nuggets of information to pass on to all of you. Recently I went with some of the 7 Figure Flipping team to a Tony Robbins event. Trust me, it pushed me outside of my comfort zone. I swore I wouldn’t be one of those people jumping up and down and yelling from excitement. But you know what? I followed the steps of the event and I was one of those people jumping up and down. I learned so much in four days it was tough to turn my 185 pages of notes into this blog, but here you have it; my takeaways distilled from four days with Tony Robbins.

Day 1: Beliefs

‘Most of you are here not because you are having trouble with the outside world but because you are having trouble with the inside.’

-Tony Robbins

1. You have to work through and beyond what is comfortable.

Right on the other side of your comfort zone is where the gains are. There is something out there that is bigger calling you, and it will ask you to get uncomfortable because that is where the magic happens, where true joy and LIFE happens.

Pro-tip: You can’t change what is happening if you aren’t being true to yourself by telling yourself the truth. We lie to ourselves to stay comfortable. 

1. Change Your Belief patterns and you will Change Your Outcomes.

Believe→Take Action→Get Results→Expand your belief in what you are capable of→Repeat. This helps us with our momentum and creates a cycle where we are living into our positive beliefs and not our negative ones.

Pro-tip: Get the results first. How do you do that? Visualize in vivid color. This forms a new belief in yourself when you can SEE yourself accomplishing what you want.Then take that vision, put it up on a wall and see it every single day. Emotion is built into that belief and you will see yourself start meeting those goals every single day.

1. Money doesn’t change people, it just magnifies who you are.

Money is a mirror to your soul. Sounds cheesy but think about it, who you are is how you see things. Human emotion is the quality of life that you have. Outer circumstances, such as money, just highlight who you are.

‘The state of my relationship is the state that I bring to it.’

-Tony Robbins

1. How we show up for other people is what we bring to the dynamic.

Focus more on what we are doing rather than what you aren’t doing. Your relationships will reflect what you are bringing to them. You are one half of the equation so it is up to you to take full responsibility for what you are adding to any dynamic.

1. There are two primary things we fear, ‘I am not enough or I won’t be loved.’

The point of knowing this is not to be fearless but to be courageous. Being courageous is feeling the fear and doing it anyway. Notice when you are stuck or unmotivated to move forward. Can you trace it back to one of these two fears?

1. What meaning you give things completely changes the outcome.

The same event can happen to two people but the meaning they give it changes how they handle it. If someone is diagnosed with terminal cancer they can use it as an opportunity to spend tons of time with loved ones and really love hard or they can be upset and bitter. The ‘why me, why me, why is this happening to me’ disempowers you in the situation, whereas being in full choice of how you respond to even the most difficult of circumstances is empowering.

Day 2: Momentum

‘Humans do more to protect what they have and where they are, then go get what they want.’ -Tony Robbins.

1. Change your mindset from ‘I should do something to I must do something.’

This shifts maybe to a certainty. Change is never a matter of ability but always a matter of motivation. There is a gap between where we are, to where we want to go. How do we fill that gap?

1. You have beliefs from the past that are inhibiting you from moving forward.

These beliefs are armor around your true essence. Let me give you an example, Do you hold the belief ‘As a business grows cash flow goes down?’ Ask yourself ‘Is that really true? How does that thought make you feel? Then ask yourself ‘If I never had that thought or limiting belief what would you do? You would probably feel excited right? Ready, go for it!

Pro-Tip: We don’t always know what we need until we get vulnerable and identify those limiting beliefs. What is holding you back is you.

Day 3: Transformation

‘If you are committed to achieving the level of lasting results you want and desire, you must have a proven game plan, outstanding coaching and an immersion experience that will compress years into days.’ -Tony Robbins

1. If you increase your standards, you increase your output.

What are your standards? What do you Accept? First answer these questions, then create a ritual around increasing your standards. The shift that we have made as a society from 40/50 years ago has elevated us to the point where everyone wants to achieve more and more. As a result all standards have been raised and now you have to meet and exceed them. Some of us have ‘good’ standards and these days good standards give you poor results and excellent standards give you good results. We have to show up outstanding because the movement is so small between excellent and outstanding….but it makes all the difference.

1. You achieve mastery through 3 things: Immersion, Coaching, & Daily Practices

1. Immersion - People who are achieving at a high level do so because their learning curve is exponentially shorter. When you are immersed you get years of education consolidated into days.
2. Coaching - You can’t be immersed all the time, so in between when you go back to real life you need someone to keep you accountable. A coach helps keep you in the mindset that will sustain your new mindset and come up with a plan to develop daily practices that will keep you moving forward.
3. Daily practices support where you want to go. A strategy isn’t always the right strategy. What you want is to find the right strategy for YOU. That is where a coach comes in. They put the puzzle pieces together and suddenly everything clicks. Your daily practices support the correct strategy for YOU that maybe you couldn’t see for yourself.

3. Certainty vs. Absolute certainty. We don’t get what we want, we get what we tolerate.

Certainty is an inside job, it happens in your heart. ‘Success leaves clues.’ Successful people combine absolute Certainty & high standards, with: immersion, coaching, daily practices, and heart-centered beliefs. You have to default to your heart not your head. Your heart will default to joy not fears.

1. Modelling--find someone who is successful and model yourself off of them.

This is one of your quickest routes to success. Watch someone who is where you want to be and model what you do after their plan. Of course you can adapt it to your personal needs but it is adapting a tried and proven model that will shortcut you to success.

Day 4: Health and Vitality

1. There is a big difference between being interested and being committed.

Interested people will allow all the voices and challenges convince them NOT to step forward and lean in, committed people will find a way forward no matter the circumstances.

1. Where you come from isn’t where you are going.

Everyone has a calling, most of us just ignore that little voice that keeps nagging us towards who we are really meant to be. There are moments you will hear the voice of your calling, those are the moments that you can ignore or lean into. You could be hiding in plain sight, a waitress who is really a CEO. Those moments aren’t when you quit, they are the moments where you decide to step into the greater plan meant for you.

There was so much more, but if I could leave you with one thing it is this:

The greatest thing you can do is believe that you can do it.

Now I want you to find a pencil and paper and answer these questions. Not tomorrow, not 10 minutes from now. Stop what you are doing right now and answer these questions.

What’s inside of you? Are you hiding in plain sight? What is calling you?

Sometimes all it takes is changing the questions you are asking. So for now, start with these and prepare to decide to get uncomfortable in order to become who you were always meant to be.

@Jess Zavoral, welcome to the world of REI! I have lived in Pensacola 4 different times and there are a lot of great investors there. I still invest in the area and we have one dedicated flip going on there right now. I just got back from a Tony Robbins event this week, it was amazing. With that mindset you are setup well for this business!

I have read many books, gone to workshops, and listened to people at the top of their game in a variety of industries. What I learned is that though a process can be individual, there are principles anyone can follow that will help them achieve success in their personal journey.

What does that mean?

Well, a lot of coaches and trainers come into teaching others with the mindset ‘if it worked for me it will work for you.’ This is a process, not a principle. Once the essence of a system or process has proven successful over and over again, it becomes a principle which we can apply to our own process.

I have developed this recipe for Achievement based on 6 principles that all highly successful people operate with.

1. Relentless ACTION

Why aren’t you taking action? You are doing something other than what you need to be doing because something in what you are using to procrastinate is feeding a need for you that isn’t being met by the actions you need to be taking to achieve. Our human personality needs are defined as significance, love and connection, certainty, and variety. If at least three of these needs are met in your work, you can actually get addicted to the actions that bring you achievement!

Consistent Actions over time become….

2. Habits

Do you like change? We have to train our brains to change.

We do this by changing our habits so the things that make us successful become instinctual. The brain makes 20,000 decisions a day, how many of those are conscious? Statistics say only 5% of our decisions made every day are conscious and controlled. That means 95% is based on what is instinctual or habitual. When you develop successful habits you are retraining your brain and that 95% is suddenly helping you achieve!

Positive habits lead to results which help in shifting your...

3. Belief System

Positive Beliefs are key in working with yourself not against yourself.

They are ‘I can’ and not ‘I can’t’ statements. Negative beliefs drag us into negative cycles. Like habits you have to train yourself to turn that cycle in a different direction. When we begin to grasp our full potential it can drive our action. And our belief of our own potential must continually expand. Do you feel you have tapped into all of your potential? When we take actions, we see results and our beliefs change. Make your results realistic by defining smaller actions, completing them, and expanding your belief of what you are capable of. How did your belief change after that first deal? How will it change after 50 deals? Believing in yourself paves the way to pursuing your purpose.

What is your purpose?

4. The Definiteness of Purpose

Your purpose is a longing or need that drives you. In the classic hero’s journey our lead character has a calling but something is holding them back. Many of us have a wound ‘ an unhealed source of continuing pain from the past that does not allow us to move forward powerfully. We are building our structures on wounds of the past. Many times in order to discover our purpose we must release who others have told us to be to become who we truly are. We have to ‘kill off the old self to move into the new self.’ When we do this we are moving from fear to courage. We are defining ourselves not from others but from within ourselves. When we begin living as our authentic selves from our essence we find our purpose.

For this stage of the journey you often need a guide. Don’t fall into the trap of being a ‘know-it-all.’

5. Be Openly Coachable

Mentors are important. If you already knew what you needed to do to get where you want to go, you would have already done it. Find someone who has values you share and is successful doing what you want to do, and learn from them. When you approach your purpose with humility and take on a guide that will help you on your path you can grow exponentially fast. Learn from someone who has been where you are at and moved beyond it.

If you are coachable AND you take on full responsibility for your life you are embracing...

6. Extreme Ownership

Everything in your world is your fault. All responsibility for success and failure rests with you. When everything is your fault you can always make changes to adapt, pivot, and solve whatever comes your way. Why? Because when you take all responsibility you also have full power to create solutions or implement solutions from your guide or mentor. Nothing will move forward on your success journey more powerfully than this.

I can tell you without a doubt these principles are the recipe to achievement. Each one of these principles works effortlessly with the others to propel you forward on your path to success. From the countless failures I have experienced and the guidance of mentors, I have discovered, distilled, and applied this formula. I promise you, it works.

The hiring process can be intimidating for new business owners. If you have been wearing all the hats yourself and you know it is time to hire, we are here with Beka Shea to give you a few helpful tips on how to make that first hire.

Beka Shea has flipped more than 60 houses and owns and operates a marketing consulting company. She’s the director of the mastermind groups and mentoring programs at 7 Figure Flipping. She has personally hired more than 30 people to work for her in various roles at various companies over the past few years. She knows a thing or two about inspiring people and building teams.

She’ll be the first to tell you that the “hiring market” is completely different today than it was last year or even just a few months ago. Making the right hire for your business is important if you want to get out of the “day-to-day grind” of your real estate investing business so you can SCALE and DO MORE DEALS.

If you are starting to do deals regularly and you have been down in the trenches alone doing everything, you may be realizing it is NOT the best use of your time to wear all the hats. If you have been doing all the jobs for some time you have probably noticed there are certain things you are better at than others, that come more naturally to you. This is one of the benefits of wearing all the hats in the early days, you become clear on exactly what you WANT to be doing with most of your time. Beka Shea calls this the ‘genius zone.’ Everyone has an area where their unique skill set aligns with what they like to do. Optimally you want to be putting most of your time and energy into your genius zone.

Making the right hire can free up time you spend on those tasks not in your genius zone and if you make the right hire, it can catapult your business forward. If you hire correctly, you and all your employees are operating in your areas of greatest skill, or your genius zones.

When and how do you make that first hire and how do you get clear as to what your ‘genius zone’ is?

1. Your first clue that you need to hire and who to hire is in your procrastination. Once you have momentum in your business, you will notice resistance to things outside of your genius zone and that resistance/procrastination will start to affect the forward momentum of your business. When you hire someone to do that thing (the one you are resisting), your business will regain momentum and most likely accelerate!

What if you only want to hire someone for one task and minimal hours per week? Is that even possible?

Beka Shea says often people overthink the hiring process by putting false limitations on the hours and role they need to hire for. For example, Beka’s first hire was for five hours a week sending someone else out to find leads. This freed up five hours of her time to devote toward areas inside her genius zone.

That being said as you begin scaling your company and building a team…..

2. You have to understand people’s roles in the company and how you manage them.

The most important thing you need to start hiring members of your team is to get clear on where you want to go. Once you understand that, you know what roles you need to prioritize filling first to grow your company. Next, get clear on your criteria for each position. This will help you Interview potential hires with consistency and ensure you hire the best candidate for the job and not just someone you like.

These two steps will help guide you through your first hire!

I sat down with Ryan Smith to ask him the questions we are asking all our Flip Hacking Live speakers this year ‘What is Working in the Market Now? What Will Work Next?’

Ryan Smith owns a company that does marketing for wholesalers and flippers all across the country. He is on the front lines gathering information on current marketing trends nationwide. With this exposure he has highly informed insight on what works! Using his expertise we identified a few crucial pointers that will help you land deals in the current market.

So, what is happening in the market right now?

Straight talk: It’s harder to get a deal than it was a year ago. The cost per deal is going up, the market is shifting and it is becoming more challenging to get deals. There is a trend right now that the more used lists are going to be harder to land a deal on because your competition is higher. Start by seeking out the smaller lists because the lists that take more work to get to, are the ones producing the most deals.

Here are 4 pointers on how you can separate yourself from the pack. 

1. Get your budget together for four or five months. Know exactly what your numbers are.

This will allow you to know not only what you can invest in marketing and for how long, but it will help you be clear on what you can offer which will help you make quick and solid offers on deals.

2. Find the marketing channel that resonates with you that is best for you, your time, and your budget, that you know you are interested in enough to do over and over again.

What exactly does it mean to find a channel that resonates with you?

The data shows that there are clients using various different channels and having success with every marketing channel. It is more about how the channel is used than the channel itself.

If you don’t feel comfortable cold calling, you would have to hire that out. If you know that you are better with direct mail and having people reach out to you on their own time, use that channel. If your budget supports it you can hire out. If it doesn’t, learn the channel you are more naturally inclined toward because it will be you working it.

Bottom line: If you are using the channel well, in time you will see results, if some part of your implementation isn't working and you don’t adjust, you won’t see results.

3. Commit to that channel for a period of time without getting distracted by other channels and bouncing between them.

Pick a channel that fits your budget and start funneling your marketing toward those people. Don’t wait until you have it a hundred percent figured out to start. You have to start talking to sellers. When you first start and are keeping track of your numbers you don’t have all the info yet to really know how long everything will take but you can keep working with the data you are gathering as you start working the channel. This is why it is important to pick a channel and work it consistently over a period of time. Don’t hop around.

Pro-tip:

Speed of implementation is crucial. Being afraid to start, analysis paralysis, is common when you are first starting.

4. Set a goal to talk to x number of sellers per week and track it. You have to talk to sellers to get deals. Pay your dues, make your offers.

You have to throw a number out and make the offers. Be willing to take action without knowing every step of the process before you get started. You will be learning some steps as you go. The most important thing is to take the first one.

We often spend money wanting a guarantee on our return for money. You may not have immediate success but the results will have valuable information. How can I learn from this, what am I going to do differently and how can I make a slight adjustment to see how the next experiment will turn out?

You can always do a risk/cost analysis. Is your risk a few thousand dollars and the potential reward a hundred thousand? You make your money back the second you make a decision even if the lesson is knowing what you DON’T want to do.

So get out there & get started! The Unknown is the scary part. If you choose a direction you are heading in and make a plan you can be off and running right now!

As the real estate market has shifted and adapted to the pandemic, we have had a unique opportunity to discover new ways of operating our real estate businesses remotely.

I interviewed Therese Anderson from our 7 Figure Altitude group. She and her husband lived in Colorado and moved to Florida. They were flipping houses in a high-end market and decided to make a shift to a lower price point market. They unexpectedly discovered how to work in both markets by utilizing ‘boots on the ground’ resources in Colorado. Therese is a real estate agent for Keller Williams and has four kids. She has found a way to successfully raise her family while selling properties in two markets. She runs a team in Colorado that has 31 transactions under their belts for this past year which is lower than usual due to covid and the transition to virtual flipping. 

The first question you might ask is: Can you virtually flip (or flip at all) in an expensive market? 

Therese confronted this question when she decided to continue flipping virtually in the Colorado market. What she discovered is that thinking you can’t flip in an expensive market is a limiting belief. It is possible, though you may think there isn’t enough of a margin or deals out there, you simply have to be more aggressive in finding the deal. With mentorship and more experience, Therese and her husband were able to analyze things from a different perspective. This article is full of her tips on how to successfully virtually flip and sell in a higher-end market like Colorado. 

You have the property, you have completed the contractor work, you have hit your punch-out list, and now you are ready to sell. What do you do? 

How to Ensure the Property is Sale Ready

The first thing you want to do is make sure the contractors have completed the flipping job to satisfaction. As you are not physically there you want as many eyes on the property as possible before you take the steps to begin marketing. 

Step 1: 

Immediately after the contractors say the job is complete hire a Cleaning service to do a deep clean on the property before any other eyes are on it. There is debris from construction and also the cleaning service can keep an eye out for any small details the contractors may not have completed. 

Pro-tip: 

Replace your HVAC filters after construction! Put it on your punch list and make sure the cleaner checks it. Having HVAC filters not operating correctly can be a huge expense later on. 

Step 2: 

We highly recommend hiring a Stager.  It gives the property a presence of how you live in this house and adds tremendous marketing traffic and often value to the property. Staging is a sensory experience. Professional stagers pay attention to things like smell and choose scents that people are attracted to that say ‘home.’ Quite simply to walk through and see a house beautifully laid out makes your property value go up. Staging draws the eyes away from the little imperfections and brings people back to the big picture. They look up and out at the vision of what it would be like living there. 

Therese says her team stages almost everything. If it is a smaller house they do a lighter stage rather than a full furnishing. If you build a business and have multiple houses to stage you might consider buying your own furniture and moving it from house to house. 

The average cost of a Stager is 1% of the listing price which gets you 3 months with the furniture included in that price, and if you need additional time after the 3 months, you will just pay the rental fee for the furniture. Find out what the going rate is in your area by asking local groups in the industry. 

Pro-Tip: 

We recommend paying the holding fee for the furniture at least through the appraisal. The homes that are staged tend to get exactly what you want for appraisal or higher. 

The stager sends photos and does a video walk-through. You now have had two sets of eyes on your property! 

Step 3: 

We highly recommend a realtor walk through the property prior to listing and note any details out of place. There is something we call a Contractor finish vs. a Realtor finish. A realtor looks at the property the way a buyer would. 

Having a great Realtor on your team is crucial to virtual flipping. Further down in this article we will detail just how much a Realtor is a part of the process!

Pro-tip: 

When hiring a realtor to join your team, look for someone that is already marketing their properties that way that you want to market your property. 

Step 4: 

After the property is staged and the realtor has done a walk-through, it’s time to hire a professional photographer. Your first impression with a buyer is now digital and a great visual representation is crucial to marketing your property. 

How do you find the right photographer? 

Ask your realtor or other realtors in the local market what photographers they like and take a look at the product.  When you have found a photographer whose work you like, send them to take photos and video of the property. Many real estate-specific photographers offer a video virtual tour service which is incredibly helpful when selling homes virtually. 

When the photographer is finished they will send you their choice pics and then your realtor will also put eyes on it. You can either leave it to your realtor or be more significantly involved in this part of the process. If there is anything missing that you feel will sell the house, you can then ask for the photographer to go back and capture it. It’s marketing and after all your work to flip, make sure your photos and video are the best representation of the property. 

Pro-tip: 

Matterport is a service that walks you through the property every step of the way virtually. Not only does this help your home sell significantly faster drawing on higher traffic with the right lighting etc., the level of detail can help you catch small things you need to fix that may have been missed by your team. 

Marketing Your Property Virtually

Step 5: 

If you have a realtor on your team, your realtor puts your listing in the MLS. How you construct your listing itself is important!

Make sure your caption draws people in along with the first or second picture. Describe how that person will live in the property. Evoke images that help them imagine the life they would live on that property. This description is what will help your listing get traffic after the first two photos. You have to get people to the property and get realtors excited to sell it.

Step 6: 

The Appraisal- Now you have to sell your property to the ‘highest buyer’ in the neighborhood. This can be an easy step to overlook by assuming the appraiser will give you the value you want, but if they don’t it can really put a wrench in your profit. 

We highly recommend going the extra mile and giving your appraiser a letter/description of the area/trends that your property is in detailing how you came to the number you arrived at regarding value. It is an explanation of why you are pricing things at a certain level. Get detailed! ‘This new kitchen with granite countertops is the only one I have seen in this neighborhood, after visiting 5 properties in a 3-mile radius. You are essentially selling the house to the appraiser. Give the appraiser comps and details that they can use to assess value on other properties in the value. 

Pro-tip: 

Your realtor should be pulling comps for you and if they are not, find a new realtor! You sometimes get what you pay for and if you are paying commission allow the realtor to do the work they are hired for in full. 

Making the Sale: Tips and Tricks

In this stage of the process, there are multiple hidden pitfalls that can sneakily drive up your costs. These tips will help you avoid these extra costs in the final hour of closing. 

Step 7: 

When you get offers and are negotiating on offers, consider the title company that closes and the type of loan that your buyers are offering. 

There are different rules for different loans that can drive up closing costs for you as the seller. For example, with an FHA loan you are going to have to wait 90 days to get an appraisal. VA loans do not have that requirement so we have sold multiple properties through them. The other half were conventional and cash. The conventional buyer has more room to play, so if your appraisal comes in low, the buyer can potentially make up for it if they agree to negotiate when closing the deal.

Pro-Tip: 

Vet the lender by asking: How many deals are you closing on time? How approved is this buyer? Where are you on getting the buyer’s documentation? How long does your underwriting take? 

Step 8: 

Execute a smooth and timely Closing by avoiding unexpected closing costs. 

No one really cares about the closing time besides you the seller, and holding and closing costs can add up quickly decreasing your estimated net profit if the closing date keeps getting pushed.  As you are negotiating the contract, lay out the inspection dates, and closing dates. In the contract, you can include a fee the buyer pays for every day over the closing date. You are not making money on this but it does cover your holding costs and give the buyer impetus to close the deal on time. 

Pro-tip: 

We recommend doing a pre-inspection before closing. We pay an inspector (this is generally a reasonable cost) to come out after the contractors leave and sometimes we include the buyer. This pre-inspection catches anything unseen and we can head straight into appraisal when the deal is approved.

To find out additional information on costs and where to find every hire we mentioned in this article as well as a solid title company, we recommend asking and looking in your local REI Facebook groups! If you have built a network now is the time to use it.

As we navigate the changes brought about by the pandemic, we are always searching for ways to adapt and learn as well as the silver linings! We hope this article with all we have learned on how to successfully virtually flip, will help you adapt and prosper in the changing market. 

I recently sat down with Tyler Jensen and picked his brain for all his best tips and tricks for house flipping. I asked him everything from how he adapted in COVID to have his most successful year to date, to how he sees the market in the coming year.

Tyler is doing a truly impressive volume of deals this year. In his early days in real estate, he was flipping one or two houses at a time, and now he is in 4 different markets based around Utah and in Virginia with 100+ rehab projects going this year. He is someone who worked from swinging the hammer himself, to currently not personally seeing the majority of houses he flips. We are going to find out how he made scaling a priority and built business infrastructures to form the successful business he runs today.

Our discussion was so valuable I thought I would write them out for you guys below. I hope you enjoy and if you have any questions or further thoughts drop them in the comments below!

This year you had a goal to flip 40+ houses and met that goal so quickly you adjusted to 100+ houses. What changed?

I created a mindset shift by taking on the challenge of COVID and using it to adapt, expanding into multiple markets and bringing in new key players. Pre-COVID, I had formed basically a ‘franchise’ of my business by creating a system and process that I could apply in multiple markets. When I found a key player to join my team that complemented my skill set, my business had everything in place to really take off.

I know you probably get this one a lot but...Tyler, ‘What’s your secret?’

Having the preparation to take advantage of opportunities that come your way. Opportunities are everywhere. Are you putting yourself in a place where you can take advantage of them and be a good steward by choosing the best opportunities for your business right now? Are you taking on challenges and adapting your business by finding hidden opportunities in current difficult circumstances?

I learned that networking and relationships can only go so far. If you expand your market, it can be really beneficial. I went to a bigger pond to catch bigger fish. My employees had to drive an hour outside of our usual market but it increased deals and kept volume up.

Pro-tip:

Alongside expanding their market, his company also started doing some of their own organic marketing and taking more control in house, working out new marketing systems.

What is the best advice you could give someone starting out in the business?

1. When you are starting out, build your processes and stay in one lane until you have a foundation solid enough to create another branch.
2. Know your strengths and improve on your weaknesses

If you are great at flipping itself but struggle with marketing and acquisitions, focus on what you are good at and get it really dialed in. If you are naturally inclined toward project management and flipping, get that process running smoothly and then focus on developing your business in the other areas.

Construction Costs: How is that Affecting the Flipping Business right now?

Considering costs have doubled or even tripled in some areas, watching the fluctuation of prices, and being discerning about what you choose to do on the flipped house, will keep your costs down. Plan out your rehabs strategically and cost-effectively.

Is it More Cost-Effective to Whole-tail at the moment?

Whole-tailing is a simple rehab that covers basics such as carpet and paint. It isn’t a $20,000+ flip and it saves on time and costs. You can strategize deal by deal to what degree you want to rehab.

What do you think about the current market?

Stay aware and watch the market. Right now the market is heavily in favor of the seller, so be cautious that you don’t determine your long-term strategies according to the numbers you are making in the current market.

That being said, it’s a strong market. People are traveling now so it will be a seasonal summer but the market will still be hot. Inventory is low and with the housing shortage, it will remain a seller’s market. High demand/low inventory equals a great market for sellers.

Here at 7 Figure Flipping, we are on a mission to find the latest innovative tips, methods, and systems in real estate and pass them on to you! Stay tuned for more from flipping maverick Tyler Jensen coming soon!