All Forum Posts by: Devan Johnson

Devan,

Real Estate is great because it can be scaled to so many different levels.  There are happy rehabbers that take the craftsman route and do the work they enjoy doing on a project, sub out and construction manage the rest and do 2-5 houses a year and make a good living. 

That sounds more like the route you would want to go or keep your regular job and flip a couple of houses a year on the side.  Or do the nomad model or house hacking method you did on this one, and buy a house, roughly at retail value, add a major renovation and the sell it without taxes after 2 years living in it. 

I do real estate locally in Fort Collins and I'm not handy and I have a full time job so I focus on the things J Scott lined out plus project management and property management on top of the list of things he focuses on.  I'm open to helping you out and can share courses I have and my knowledge.  But it sounds like you need to do a gut check because your mental game seems off.  Maybe you are just bummed out but when someone on the thread suggests you do something, you reply back with an excuse about why you can't do that.  Don't limit yourself, stop thinking of yourself as just a newbie.  Dive in and learn the skills you don't have, like acquisition and knowing the funding sources and maybe deal analysis and valuation.  You are already better than most real estate investors on construction knowledge but does that translate to your estimating for making offers. 

There are a ton of cheap local trainings, where real deal people go along with newbies. ICOR, bigger pockets meetup in Louisville area, Mindy Jensen has details on that. NCREIG is a free traning class held weekly be a real deal investor Brian Williams and great buyers agent James Orr. Every wednsday at the board of realtors. info on meetup. Local REIA group ICOR has a library where you can check out for free all kind of Guru real estate courses for the old presenters that came through.

It's tough to buy in this market but a guy that I know that works a full time demanding job at HP flips 10-20 houses a year and he mainly buys at auction and on the MLS. Mark Ferguson works in our market and doesn't work on houses and does 10-15 a year off the MLS. I work full time and do 4-8 deals a year. The opportunity is everywhere. In downtown Fort Collins if you got licensed you could buy an old house at retail, do the construction yourself and with prices at $250/ft2 you can make a pretty penny on a high end flip. Opportunity is everywhere if you look at the world with opportunity colored glasses. Take action and you'll find success. I doubt you are knocking doors or cold calling, I know I don't. But if I did I'd have a deal in a month or 500 contacts. That would suck but I'd make a minimum of $20k

I've written a lot about this, but here's a quick summary...

Presumably, you're flipping houses in order to make money.  And presumably, more money is better than less money.

When you do a particular task yourself, the value of that task is essentially the money you're saving by not hiring it out.  So, if you decide to paint a house, the value of you doing that work is whatever it would have cost you to hire out the painting.  Typically, for contracting work, you can hire stuff out for between $10-40/hour.  So, if you're doing the painting yourself to avoid hiring a $15/hour painter, you're essentially earning $15/hour for the time you're doing the painting yourself.

Did you get into flipping houses to earn $15/hour?  If so, go for it.  But personally, I flip houses so that I can earn at least $300/hour (and hopefully closer to $500/hour).  Unless I'm doing a contracting job that would cost me $300/hour, I'm not accomplishing my goals by doing the rehab myself.

So, the question is, what flipping jobs earn $300+/hour?  The answer is typically three things:

1.  Finding deals: If it takes me 40 hours to find a deal that generates $20K in profit, that's $500/hour to find deals.

2.  Raising money:  If it takes me 40 hours to find the cash to do a deal that earns $20K in profit, that's $500/hour to raise money.

3.  Business strategy:  If I spent 40 hours working to figure out how to increase my annual income by $20K, that's $500/hour to raise money.

I can't think of many other tasks that can generate $500/hour, so I tend to focus on those three.

So, my recommendation would be, instead of spending time rehabbing your houses, spend your time finding more houses, finding more money to buy those houses and think about how to improve your business strategy to generate greater profits on those houses.

Unless you'd rather just earn $15/hour...

Nice job, I am really impressed! I also do all of my own work but I have never attempted concrete counters - I'd love to get some pointers, especially how you incorporated your own beer bottle glass into the counters!

Hey Devan! Great project. I lived in College Park on Harvard Street for many years. That is a great neighborhood and your finished product is beautiful. I like that you didn't change the exterior look of the home too much, like so many do when going into the older areas, keeping its cottagey classic style!!! :)

I would get yourself some education on alternative methods of finding deals, it's fun and from what you mentioned it appears you like rolling your sleeves up, researching, etc. I have recently gotten very into the County auctions and there is a lot of information on the process online, since everything has to be public. If you know your areas very well that you are farming, get signed up with the County and start looking at who's buying, where are they buying, maybe team up with someone with a great deal of expertise in your area and learn how they are snatching up the deals. I am in a smaller market, but there are only about 5 main players (one very dominant) in our County auctions....you'll get to know your competition right away. I joke that I am waiting on him to go on vacation so I can get the deal that he missed :) When you are comfortable with your area as well and get some more deals under your belt, you may be more confident to go after those non-conventional deals.

It can be overwhelming the options of ways you can make these deals happen, choose one at a time and research it until know it front to back, once done, move onto the next. Get comfortable with these ideas and processes, then practice! You obviously have the talent, now go out and learn about some funky ways to make the next deal happen!