All Forum Posts by: Dallas Trufyn

Lots of great advise given so far. I would just add two points;

- Take all emotion out. In REI, the house makes absolutely no difference, which takes me to the next, and most important part of the 'puzzle'...

- Make sure your numbers work! Find the formulas that work and stick to them. Most all investors can attest that unknowns and problems will come up, whichever strategy you use. Allow for contingencies in your budget. 

As stated, networking is very important. Listen to other peoples successes AND failures so you can glean the best strategy for you. Reality TV has made flipping 'easy' but it's work. Actually Tarek and Christina have shown 'flops' and that was excellent they did that, that is actual 'reality TV'. Buy and hold has tenant issues, use PM if you can. RE is, and should be, rewarding. You will have to find your own niche. 

Have fun doing it and go buy some houses!

@Michaela G. Yes of course, like most cities I guess!

I started flipping cars when I was 16. Made very little, if any, money buying advertised cars, clean/fix them up and advertise for more. Easy money, right? Didn't learn the most important tip till many years later;

"You don't make money when you sell a car, you make money when you buy it."

You can't buy at advertised/retail price and expect to make money. You have to buy at investor/wholesale prices. Just like Walmart does. They buy at wholesale, but their shipping, staffing, etc. expenses are still in the formula, AND they still make large profit on top.

You simply did not account for the renos in your formula, which you must do. 

75-80% of ARV - Renos = MAX OFFER

Remember, the renters are supposed to pay for everything, not you. Just to clarify some of your numbers here;

"Second property I bought for 70k then 23k in repairs. It cash flows $1150 but is work 120k now. However when I Refi I got 75% of 80k or 56,000. So -14k, add in repairs $-27k."

- You bought for $70k + $23k = $93 into the property (you didn't include closing costs)

- You say it's worth $120k, so $120k x 75%(refi) should = $90k which would pretty much cover your initial investment.

- If the house was only worth $80k after renos, you were not able to get the forced appreciation, which is a key component of the BRRR.

- You were only able to get $56k back from the original purchase (-$14k), add in repairs ($23k), should be -$37k.

I appreciate your honesty and openness. There is always good support on here from others who have been where you are. David, I think you did not "buy the car right" here. I have lost on cars and I have done very well on cars. I have not lost on houses (yet, except one potential current deal where we are taking a contractor to court for not completing work) and I have made on houses. It is SO important (newbies, listen up!), to stick to the formula!!!!! Can't stress that enough. 

Remember, the house DOES NOT matter (don't get emotionally attached), where you can or will get the money is irrelevant, the location (location location) may or may not matter, but the numbers mean absolutely everything. Everytime. Period. 

Looking to invest in Atlanta as well. It sounds like the rental market is not good (thanks for honest posts), but how is the market for flips? 

Would be interested in connecting and meeting with investors (new or seasoned) in the Edmonton area. I am a full-time investor looking for flip properties and would love to meet with wholesalers, flippers, contractors, lenders, agents etc and hopefully benefit each others business's. 

As someone who invests in houses and cars, I like to take the advise of the rich. Jim Pattinson said:

"You buy the things that appreciate, and rent the things that depreciate."

You rent things that are bad investments (boats, RV's, quads, computers, etc), but rent a car? We all know that new cars are throwing money down the toilet, but we all need them, right? You 'rent' a car by leasing it and writing off the payment, usually through a company. I understand that you guys need a dependable vehicle. If you will not be writing it off, then you will have to decide an amount to purchase something, but keep in mind, that $15,000 car will still be a $2500 car in a few years. 

Real Estate and Collector Cars go up, all the other stuff just robs us of our hard earned money...

It depends on what your partners want, or are expecting. If someone is just an investor into the project, you simply pay them back their money at the end with a previously agreed on interest rate and you then keep the profit (if there is one) and on to the next project. You can also agree before you start to give the investors a percentage of the profit instead, or on top of the interest rate. They are lots of options here. 

Look at it this way...there is no tuition you could have paid at any school to LEARN what you did!

We had very similar problems to yours on our very first flip, plus we are just getting ready to take our contractor to court for ripping us for a job that WE had to finish. Bet you won't do a lot of those things again! ;)

You did good, you really did. I can tell by your attitude....

That is where building a solid network of lenders/investors comes in. It is very possible to buy, reno and flip a house using less money than that, however renting out will probably require more capital than that, unless you partner up. For wholesaling, take a small portion of that $7000, start marketing, look at some properties, meet some owners, get some properties under contract and sell them to flippers/contractors and your money should grow. 

Which seminar are you taking?