All Forum Posts by: Mark Cruse

@Mark G. Not sure where your research came from but what I was basing my perspective on, was from a professional working knowledge of being on the ground observing. I tend to believe that could be a reasonable stat for the experienced investors, however, I don't know where you even get enough accurate data to formulate anything. I have many flippers coming to me, asking for assistance to come save their projects. Nearly most of the newbies, close to the 90 percentile took bad deals and either had it foreclosed on or lost tens of thousands of dollars. Some break-even which I also consider a failure. I talk to person after person in local RIEAs. I talk to many of my lenders who are sitting on tons of garbage inventory they had to take back. Many of my decent wholesalers present failed flips for someone else to take over.  No one I know is going anywhere to report their loss so you can research it. None of the lenders I know are entering all the investors who lost with them into some database. What about the thousands of family members and private money lenders who are under the table? How is your research analyzing all that? For real, it doesn't even matter. 'Flipping is considered erratic and high risk but if your research tells you most win, then it's a no brainer for you. Maybe it exists but aside for rookies I know who have zero knowledge as to what they are speaking on, I have never heard anyone assume most flips are winning these days. The market is full of garbage numbers and there is no shortage of newbies willing to acquire them. Only time I will ever concur that most win at flips was the time leading up to the Great Recession.  Your research says this, and my real-world experiences says otherwise. Either way, I'm not here to convince you of anything. You have to go with what works for you but please be sure your software or research tools are not erroneously bending into what you wanted to result to be. 

In the future, please have all this lined up before you submit a contract. The wrong lender can sink you, and trying to scramble to find one may skew things. Try to reach out to your network and go to a local REI where you could get some referrals.

Do you have your contractors set up? 

Have you assessed how some of the repairs will be funded? 

Do you know the cost of repairs and the ARV?

Never used software. Just old school grunt work. 

I flip in areas I'm familiar with but even if not, it's not complicated to formulate comps from basic google searches. How hard is it to get about 4 homes similar to the one you will sell and look at what they sold for? 

I estimate my rehab costs based on work that I'm always doing in my portfolio or the past flips. I also have great contractors that are familiar with what prices are.

I guess all in all it boils down to experience. I'm an IT guy myself and clearly not against automated systems, but that can misguide you if you don't know much yourself. If you lean on it too heavy, it may just tell you what you want to believe in the first place.  It's similar to a GPC in downtown DC, it may get you close but you will be jacked up if you can't apply some other stuff yourself. 

In the day there was no software to do anything, and people made out fine. Since most flips fail these days and many rely on their charts, slides and software analysis, it should be a signal that it's not some phenomenon to guarantee success. Not saying you believe this at all but many do. It's cool to know how to use tools to a do analysis but it has to be utilized properly.

I have seen several flippers who have read Rich Dad Poor Dad; had every Performa, chart, analysis package, market analysis reports, cost benefit analysis, work break down structures, IMS and much more and botched every project. 

I've used none and have never lost on a flip, but we need to use whatever is best to assist us within reason.  Just don't get so wrapped up in it.

Best of luck!  

 Unfortunately, I don't know anyone with a home or cabin in the area. However, with the condos, I do know that the in/out element is very very important. With my condo, I believe because they can walk right out of the building to the slope, in many eyes it would out rank a home where you can't do that. The winter hosts hardcore skiers where that is where the heavy focus is. They are skiing all damn day so whatever augments that, it works best for them. Also, with my condo and many others, you can nearly step right outside to the village which ranks very high. None of the homes have this. However, though I don't know the actual numbers it seems like the home would offer so many more amenities I would enjoy as well. Since you are not a skier, a home or cabin that is close with its own hot tub and other stuff sounds great You can do much more with a home than a condo. I think you have a solid plan in regard to getting a summer home. I enjoy the summers there as well. Even if you don't profit or break even, you know for fact that you will make something. It actually works out better when you enjoy the asset yourself as opposed to someone who just wants the money.  A good realtor will have all the revenue and provide whatever is needed to make a sound decision. Please let me know how that works out for you. Best of luck! 

Before you go any further, I think you should understand they are 2 entirely different things. One can be close to a hands off, passive investment depending on a few things. The other is a service and sort of hospitality-oriented approach. The STR is a lot more work and even if you get a manger, you may have to be involved. So many more things to consider and do. I have both. I have a property manager for my STR and manage some of the LTRs myself. Even with the manager, in mine, I'm thinking about and doing more in the STR than they ones I actively manage. I would research and drill down what is required from each and see if it even fits you. Not sure, but the way it was presented it seems like you were putting these two approaches in similar buckets.

Mine are ran by a property manager. In off season when its a mid term rental I manage. I have never really screened much for the midterm side. It was usually for a month or so and if they had funds, I let them in. Had a few small problems but nothing major. I don't think my manager does that for the short term side either. Its at a ski resort so it seems like it would be time consuming. They will only be there a few days. Hotels don't do it. 

Where do I find this place where I can give a tenant a review? 

Good luck with that. Doesn't hurt to ask though. There is really no reason for any lender to take that risk on you. In some instances, if they have a solid built-up relationship with an experienced investor, they are confident will perform then they may roll with it. If I was a lender, why would I give someone 100 percent when there are unlimited amounts of people who can put down the 20 percent? There is no logical reason for me to take that on.  

You have to understand the city. You have to know so much about the area you are in. It goes block by block so you must know what's happening. There are dozens of things to consider. If you get a boarded-up trap house, you may not be able to sell it or rent it. You are stuck. If the block is crime ridden, in so many instances what you put in it one day is gone the next day. You have to understand repair costs, ARV and many other things. Suppose you bid and get it for 25k? Sounds damn good right? What if the ARV is 75k but takes 175k to get it to code? Baltimore City is tenant friendly and very hostile to investors. While you are renovating, a squatter can break in and declare its theirs and could take you a year to get them out. Also, Baltimore has so many silly inspections, fees and fines they issue for little to no reason. It never stops. If you are not on top of so many things it a great chance you can lose. I'm not sure about Baltimore but in DC, if you take on one of these that is already boarded up, the day you take possession they fine you and put on some strange tax because of it. Baltimore is a city where thousands of investors around the damn world are watching and jumping in on bidding and other things. In so many instances, the stuff that is doable is gone and only garbage is left. Just make sure you are getting something that can work and seriously assess where and what it is. Good luck!!!

Quote from @Bruce Woodruff:

I agree with having multiple options. People that are really into coffee (and that's a LOT of people) really appreciate the choices. One of my places had a little extra room next to the kitchen so we made a dedicated coffee area with a coffeepot, a drip setup, a french press and a pod machine. We got a lot of rave reviews over that.

 This is a creative extra. I'm always looking to add more and more just to possibly make it more comfortable to prompt great ratings. I'm experimenting with several small touches to see what impact they have. Great idea because like you said, coffee is important to so many. 

I have regular drip but am buying Ks so they have both options. 

Who knows if it will help but definitely wont hurt anything.