All Forum Posts by: BJ Ralphs

This is not a rant but I could use some advice....I've owned my own business' for many years and understand that all business is competitive. I'm used to scrapping it out everyday creating something from nothing. I'm looking for a way to transition out of my present business (a traditional printing company) into building a real estate business that will allow me to re-locate to the Pacific Northwest.

I have just under a $100 grand in the bank set aside to start a new house to flip business. I'm no rich guy, but thats a decent amount of money. (I'm sure many would be in heaven if they had that cash set aside) Unfortunately, $100 grand isn't enough to finance my own deals by myself. I have experience as I've been a real estate agent since 1995, and I have bought, fixed, sold and even built from the ground up several homes, but I've also been out of the business for a long time. Offers that I make based on the 70% rule are considered low and scoffed at. Banks are sitting on tons of derelict properties (i've seen them) creating eyesores in neighborhoods but unwilling to budge on prices. I'm looking around the Vancouver WA / outer areas of Portland OR area. Hard money drives the cost of flipping a house way up, but I'm okay with paying to play, or with partnering with someone and sharing profits. I've spent weeks looking around neighborhoods, putting up bandit signs, talking to agents in the area and have made some offers but nothing has stuck yet. I'm always "temped" to pay a little too much just to get my hands on a property and get this thing rolling but I know the numbers don't lie.

I'm asking experienced folks in the business....

What would you do if you were me? How would you kick start this thing if you wanted to have at least ONE property in production in the next 30 days?

BJ, in my experience, its super hard to find a deal that pencils out in the Portland Metro area on RMLS but that may be starting to change a little. I have made a bunch of lowball offers in the last month and half because our market is starting to soften - so the junk that was selling at crazy prices, even thought it was junk, is starting to sit and linger on the market. I finally got a project under contract after a long frustrating time. I'm in a similar situation - I use private money (little cheaper than hard money but still have interest) as well as hire contractors, so accounting for interest and labor my cost to do a project is often higher than a true cash buyer and/or contractor. However, this little slowdown combined with the seasonality of our market and the bump in interest rates might create some opportunity for fix and flip investors over this winter. So I would suggest you keep throwing offers out there and something will hit. I think its better to have no deal than a bad deal so just reject the temptation to go too high - its unlikely you will be able to make it up on the sale if you buy too high. Also, I don't have any contacts in Washington but if you want the name of a larger wholesaler in Oregon message me and I'll be happy to send that on to you. Good luck with your transition!

Thanks. very much appreciate the feedback.

1 Vote

Originally posted by @Patrick Philip:

Originally posted by @Wayne Brooks:

Agree, from a practical point of view, it is a ridiculous request....do you think a buyer is going to do inspections, go through the Actual mtg approval process, pay for appraisals, etc all the while knowing other people may be doing this and they could be doing it for nothing?

Your best bet is to have your agent recommend a legit lender....require buyers to meet Their preapproval process (a real one, tax returns, pay stubs, bank statements, etc)....they don’t have use your lender for the loan, but meet their preapproval standards.

I just had a buyer back out because they got cold feet after over a month. They were preapproved from a legit lender, then they simply never went back in to finalize the loan. Hence, they were never approved. Not because they weren't able to but because they didn't want to.

Didn't you keep the deposit? Wouldn't that. E your protection?

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Homeadvisor.com has an "average" price estimator system online for almost every job you need done. they tell you the Low end, med range and high end "typical" price. You might be able to use this tool to get a ball park.

https://www.homeadvisor.com/cost/kitchens/remodel-...

Just google what you are looking for and they have tons of info. Tile, Paint, carpet, Cabinets, Sinks, lighting....

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Originally posted by @Jason D.:

@BJ Ralphs how have you been sourcing your leads? Have you networked with wholesalers? Attended local REI meetings? Talked to local RE agents that are focused on investors? Other than what you've been doing, that's about all I have to offer. Sometimes it just doesnt happen as fast as we'd like.

working with RE agents in the area. I don't have any wholesale connections yet in WA as I still live in California. My wholesale connections here in Ca. have driven the costs so high now that they aren't as good a source as far as I can tell. Also need to find a good REI meeting in the area for sure. I'm hearing "more networking" as the most likely answer. Thanks for the feedback.

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great story. thanks for posting.

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I have a friend who is now probably about 75. He was an engineer working for Boeing for most of his early career. Anytime he had extra money he would buy and apartment, then a house, then another building....slowly over 30 years he has acquired over 75 properties all in the Southern California area. All paid for now. You can imagine that he brings in more money in rents than he can ever spend. but he used the engineering job as the motor to drive all of his investments until such time as he no longer needed to work. Now he just spends time on his boat and traveling.

Hail to the bored engineer who is now the richest guy on the block. :)

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Originally posted by @Dennis Dahlberg:

Lately the homes on the court room steps are going close to retail and sometimes more. There are a lot of eyes looking at the same property.

You will make the check out the the beneficial or the Trustee, the company doing the auction will tell you, and usually you have till 5 PM the next day to come up with the funds.

Most auctions will require you to put down a cashier check around $10,000 when you win the bid and pay the balance within 24 hours. I use to keep cashier checks made out to cash, and then endorse them when I won the bid.

The trustee will issue a "Trustee Deed" to you when you win the bid.

If these properties are selling for close to retail as you say how do investors make any money on these deals? The numbers don't add up as far as I can tell on a LOT of these auction homes.

1 Vote

All Forum Posts by: BJ Ralphs

BJ Ralphs has started 8 posts and replied 40 times.

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