All Forum Posts by: Dale Hensley

Check out houseflippingspreadsheet.com. They just updated the sheet a couple of days ago. They offer a demo to try. I love this software. It's technically an excel sheet but it works like software and looks like it. If you feed it the data, it will give you a pretty good estimate of where you are and where you need to be on the 70% rule. I am trying to do deals at 55-65% but they aren't all that easy to find. It will also tell you what the maximum purchase price you should buy for vases on all of your variables as well as put an investment report together for you if you need to find investors. I am an end user only and get nothing for the good review. I just think it's an extremely inexpensive tool that's well worth the money.

I'm surprised at the costs mentioned on setting up an LLC. In Indiana, it costs under $100 to file the LLC with the state and you are established. All you need is a basic articles of incorporation. There is a fee of about $30 every 2 years to file the business entity report to show you are still in business but that's it for the setup. I hold everything in differnt LLC's and do business with each of them. My renovation company is it's own LLC that does business with by real estate company. I have a small sign company that gets paid from the real estate company to produce marketing and signage. It does make things a little more complicated at tax time because I have to file separate schedule C's on each business but it works out and also keeps me from having as high of profit to pay earned income on the real estate side.

Since you have your wife and 2 others coming in, I think you will need to look heavily into an LLP. I have a good friend who is a commercial property investor with his two brothers and they are setup in an LLP. They do multi-million dollar deals daily. The main protection comes from having good insurance and doing the right thing instead of taking shortcuts. My renovation company doesn't do very much of the actual labor anymore. It works mostly as a general contractor that subs out the work to other contractors but I still have a large business insurance plan and am licensed, insured and bonded which only costs me $900 a year.

On another note, we do our property purchases under a trust as I have been led to understand that it is one of the best ways to separate the property from my personal assets. Just make sure you have a very trustworthy trustee involved.

Good luck. This is a fun business. Our first flip went awesome. We didn't make as much as I wanted to, but we still had a net profit of $27k. It can work very well if you do a good evaluation on the property and make your money when you buy the property.