All Forum Posts by: Dusty Bowling

Thanks for the info. I actually thought about getting my license but couldn't justify talking to someone trying to get them to sell to me for 70 cents on the dollar then  switch over and convince them I can sell their property for full price. I do agree that the contacts and reputation I've gained would definitely help in this field. I guess it's always a back up ;)

Thanks Brian for the info, exactly what I was looking for.  I've always been an action first kind of guy. One of my favorite quotes has always been, "A fear of failure will make a failure of us all." So applicable in this business, failure is a necessity to learn. Knowing how you turned out just makes me want it more. 

How would you go about the process of turning all my subs into a crew that I can bid our jobs completely to. Right now I have 6 or 7 individuals that move from project to project and I'm finding it hard to bid out when priorities change on a daily basis. The day starts out on a rehab then someone moves out of a rental and I need to switch 3 of the workers over to a rental to not lose out on rent. I think the years of penny pinching and negotiating such good labor prices my mind won't let me switch from paying guys that I molded for the last 10 years to automatically go from 15hr to 25hr just because they are bidding out instead of working by the hour. I realize I need to get away from being a GC if I'm ever going to see significant growth and stop worrying about saving pennies and start making dollars. Would you take the most knowledgeable guy I've had with some prior experience of running his own crew and let him bid out full rehabs. The problem I see is I have very loyal guys who love to work for me and don't want to screw up the dedication they have to me by now taking orders from someone else. Sorry I'm rambling but any thoughts would be appreciated.

By the way loved your podcast.

Hi everyone. Let me give you a brief background of myself. I am a full time sheriff deputy but have been flipping houses and holding rentals for the past 10 years. I currently have 20 rental units and have flipped 20+ homes in a small community. I live in Covington Indiana in a small town of around 3,000 people. Without any marketing, just word of mouth, my flipping business has taken off. I have negotiated great rates with local contractors, and have around 5 guys that have worked for me over the years that due the majority of my work. They are not employees but I have given consistent work and I'm now at the point of using them 30-40 hours a week. Because of the rates around 12-15 per hour and the quality work I'm getting we are basically on a trust system. They tell me how many hours they worked for the week and I pay them. I understand this isn't the best plan, I do a lot of babysitting, and overseeing, but the trust is there. I'm in the process of hiring a few new guys to take on the general contractor role, who also have more of a skillset to do the finer finishing work that needs done. The guys I have can do all the grunt work, paint, trim, light framing, ect... but not the guy I want to build a house from scratch. I also have negotiated great rates with licensed plumber 25hr, electrician 15hr, and a licensed hvac 25hr that do all the work on all my flips and rentals. I have one individual who owns his own company and I've negotiated a rate of 20hr for him to do the finish work. I trust him completely and he would be ideal to run a flipping crew. He only has one guy that works with him, but using all of my guys and subs would allow for a flipping team with all the trades being covered.

 I currently have 4 or 5 private investors with access to capital of 500,000 or so. I also have 5 projects in process. Purchased 2 small rental houses on same lot cosmetic rehab hold for rental, remodeling a downtown building with a complete upstairs gut job and conforming bottom to fitness studio, small 3 bedroom house cosmetic rehab for a flip. I'm seriously considering quitting my job and go into investing full time. I currently make 36,000 as a sheriff, my rental properties bring in a cash flow after all expenses of 4,000 a month, and the flips I currently due while holding a full time job are around 30,000-40,000 per year. I am seriously considering quitting the sheriff's department and going full time. I know if I've accomplished what I have while holding a full time job of 50hrs per week, the drive and determination I have to succeed with all of my attention being given to real estate is unlimited.

The question I have are the following?

Would you start your own contracting company and keep all of my subs and pay as employees?

I'm a little worried of how to structure my business if I quit my job and continue with flips and then be taxed as a dealer.

Where would you start with systems and people to transfer from where I'm now to full time investing?

Any advice on where to go from here would be great.  

Haven't tried it yet but the flip nerd podcast has a nationwide contractor account. It gives you an account number for a home depot for a contractor account with 20% off of paint and a discount from 10-20% off material. if you sign up for their free newsletter they email you this info. Gave them my e-mail they sent the card info. Like I said haven't tried the card yet but plan on soon.

I would agree with Jim on this one. If you can look under your crawl and see if you have a support beam through the middle. I had the same situation I had approximate 30 ft span on a rental I purchased 10 years ago before I knew anything. Was getting seperation between the walls and the ceilings looked in the crawl and saw there wasn't any piers and a beam to carry the load from too big a span. If that is the extent it wouldn't be a deal breaker for me as long as you were including in your purchase price and extra for possible damage that occurs when fixing.

Chris, you hit it on the head. This would be a controlled mailing to people refered or others I know but don't " know." I was thinking introduce myself, my business, and a couple no pressure offers to learn more about an investment opportunity. I live in a town of 3000 or so and am currently the only main investor that has done more than 1 or 2 flips. I have a good reputation for quality and most know of my business, I'm just trying to expand from 3 or 4 a year and move to 10 or 12. We all know capital make the wheels go around. I'm at the point now where I'm getting calls without advertising of people wanting to sell me there properties, rent mine, buy on contract daily. I was thinking a personal letter would be a little less intrusive and give the option for them to call me instead of feeling on the spot with a lunch or call out of the gates. Plus a letter would give me an opening to approach next time I saw them around town and not be coming out of nowhere with investment oppurtunities. :)

Thanks Jeff, I would be offering straight interest but the letter would be just a feeler trying to gauge interest to see if they would be open to a lunch or a phone call not a full sales pitch.These are the people who I have heard might be interested possibly have money maybe met once or twice but wouldn't consider close friends. Thanks for the sec info, I'm a little confused though. Can you offer a guaranteed interest rate on just a personal note?

Hey everyone was wondering if anyone has every tried mailing hand written letters as an elevator pitch to potential private investors. I'm from a small town where everyone knows everyone, I work for the local sheriff dept., have done 12 flips in the past 4 years and would only be sending out to people I know and referrals. Do you think it would be a good idea to send out a small elevator pitch letter to start up interest and then give them the option of calling, texting, or email if they would like to sit down for lunch and discuss or if they would like to have a credibility packet sent out for some further no obligations info, or maybe set up a company website or face book page. Was wondering whether doing this would ruin your first impression and take away the option of meeting face to face and giving elevator pitch.

Why not start with a duplex or 3 family. It looks like you have a family from your pics, so I would start with a 3 bed 2 bath duplex. Rent one side and live in the other. If you have the skill set I would always go with a fixer upper, buy well and fix up to increase market value. Live in for 2 year, save on capital gains and sell for profit. Then move into a single home and purchase another 2 or 3 family for income. Rinse and repeat.