All Forum Posts by: Calvin Beeke

If the bank pulls through with 20% down requirement (I should hear next week), I will be looking at 14% with my very conservative numbers. If they require 25% down, it would be 13%. Again, this is being very conservative with rents and adequately projecting expenses in its current state. 

So, here is the scoop. Want to make $30k on every flip? Here is how. To clarify, I haven’t made $30k on every flip, but my percentage is growing on the flips that do make $30k. Also, making $50k on a flip is possible, so to achieve an average of $30k per flip is attainable. To preface, this isn’t the numbers side, assessment of a deal, or a rehab strategy. This is simply a summary of 9 random enlightenments that I have come to know and would like you all to know!

• Buy right.  You already know this...and easier said than done right? In crazy markets like this there are no deals you might say. Wrong. Deals are all over the place. If flipping is more than a once a year hobby to you, try this tactic. Every person you have a relationship with should know that you buy houses. (If using OPM and private investment channels, indicate the attractive “CASH OFFER” phrase) It doesn’t hardly sound like a tactic, but I seem to land 1 deal a month from a contractor, neighbor, friend, family member, or a general acquaintance. I have nothing against specific marketing campaigns, but sometimes your best marketing, is how you help others and handle every relationship.
• Commit first, ask questions later. My neighbor told me once that he was moving in less than a year to his retirement dream home in Canadian lakes, MI. He said he wanted $120k for the place. I told him I would do it, without ever seeing the inside. Six months later, who do you think he called first? After some potential basement issues, we landed at $112k. He was so appreciative of the cash offer and my willingness to clean up trash and an old boat he wanted to leave. 
• An American Flag. This $14.99 improvement on the front porch goes a long way. First Impressions. It matters. We all love the stars and stripes, and it represents a country that allows a free market to determine the value of real estate. Why not proudly display at every job site and leave it for the new owners. It completes the look!
• Raise funds in desperation, but not procrastination. I work best under pressure. I certainly have my routes and my last resorts in funding flips. More often than not, once I have a deal with a close date of ample time, I can raise the funds out of necessity with a specific plan and figure in mind. My weakness was procrastination. That takes desperate to a new level and that isn’t healthy.
• Buy the oddball. In slow markets, buy the perfect square typical homes. In good markets, settle for less if it’s a quick turn. I have now purchased about 5 or 6 homes that one would consider oddballs. Now, these were all GREAT deals. That part doesn’t change. Don’t overlook the 1 bedroom 592 square foot tiny home. If you can buy it for $27k from a seller who wants out quickly, do a 1 day clean, paint touch up, and turn it for $57k, why not? By the way, this particular scenario was an ad on facebook. 
• You don’t need to fix up the place. On three occasions in the last year I have bought tenant occupied homes from an investor who had his sights set on bigger things. This investor had not gotten a grasp on how much the market had skyrocketed in the blocks surrounding a college. He had paid around $60k for the home a few years ago. I bought it for $80k, made zero improvements, listed for $100k and after many over asking offers, put it under contract for $125k. After appraisals fell short, I eventually sold the property for $121,500. It turns out, I didn’t even know how high the market was and I thought I was watching it like a hawk! One of these three scenarios was listed on Facebook actually. 
• Sell your rentals. I will be the first to admit that there are some rental properties that were a mistake to buy, UNLESS, I let them go. In a good market, it’s time to offload those. How do you pick which one(s)? Here’s how. We made $28k on a duplex in a less than desirable area that we owned for two years. After two years of analysis, moderate cash flow, cockroaches, and an area that wasn’t getting any better any time soon, we offloaded it. We didn’t offload a property a few blocks over that we had dumped new windows, porch, carpet, kitchens into. With good tenants, cash flow, structure, and layout we choose to keep that one.
• Sell your home every two years. If your wife/husband/kids can be roped into joining you on this exciting adventure, this is an opportunity to land an additional UNTAXED $30,000 of income every two years. You won’t always catch a dramatic market rise if you consistently do this, however, when you do, you can turn that ‘3’ into a ‘6’ or more! The number of zeros matters most, but that number in front is cool too! 
• Let’s change the game. Simple question. How many houses do you need to flip to make $30,000 per month? 1. Wrong. 3. Correct. One in the buy phase. One in the Rehab face. One in the listed/pending face. The ability for any REI to coordinate a steady supply but not an overabundance is certainly a juggling feat. Some may desire to scale and do so much more than this, and that is great. When my main goal, however, is on buy and holds, flipping as a substantial time commitment but on a small scale is one of the greatest business opportunities out there for anyone.
  
  Best of luck in the flipping world! Tell me your story, flipping strategy, and profit goals! I look forward to learning more! 

Hey Everyone, 
I just wanted to provide you an update at this time. I am working through the financing aspects currently and an assortment of issues, BUT I have the 12 unit under contract for $485k. 

I have made some very positive discoveries so far: 
- Utility costs may lessen. 
- Longterm tenants with relationships with the owner have led to lower rents which are long over due for a raise. Turnover may occur in some instances obviously, but demand is strong. 
- Recent analysis indicates there should be no reason for a vacancy rate over 5%
- Quotes for lawn, cleaning, etc. after much research have significantly been lowered. 

Expenses will trend down with rents going up will hopefully bring a phenomenal result! Again, thanks for your contributions to the discussions. I am sure I will have more to talk about in the near future! 

Thanks for all the feedback guys! I greatly appreciate it. 

As for Cap Rate. I should have mentioned that. Our area has been crushed by investors from California and Chicago on buildings of anything 5 units or bigger. Or even single families for that matter. In 2015, I would have said a 10 cap rate. If you told me an 8 cap rate today, I would be thrilled, so I suppose a 9 cap rate would be my first offer and I might settle for as low as a 7. 

Hi, I am Calvin and this is my first post. I have 8ish years of experience with part time flipping, and bought my first property through my Dad while still in high school. I have full or partnered ownership in 22 rental units. I am currently evaluating a 12 unit. 

My question is this: Should I make the move to multi-family and what is this 12 unit worth? Also, what would you advise as to insurance as this would become my largest concentration of equity with a 25% down payment? 

The context: The owner has not stated a price, but has allowed me to look at the vacant units and said he was open to offers. The property is not publicly listed. Property exterior is in phenomenal shape. New Roof, boilers, laundry units. Carports. Units are all very similar with older kitchens and laminate flooring, most have had new carpet and paint with the last tenant turn. Most bathrooms are in good shape with slightly outdated look. 

The numbers: 

12 units (9 2 bed and 3 1 bed) $740 average rent for all units. I believe it to be 10% under market. 
Coil Laundry - $2,500 
Area is an A or B, suburb location within 20 minutes of Grand Rapids, MI. 

The Expenses: 

9% property management with 40% placement fee

Vacancy has been 12%, but I believe this to be an error of management and timing of leases. 

Taxes at $15,000 (potential of going up with transfer of ownership of course) 

$600 in electric costs 
$6000 in gas costs (radiant heat) 

$3000 in water costs 

$1800 in trash, lawn, snow removal

The loan, and the insurance (which will be decided by all of you as you will help me know what to offer!) 

Thanks for the help in advance guys!