All Forum Posts by: David Oldenburg

Some advice for the newbies!  When you are out trying to flip, wholesale or buy and hold, think like a "Black Friday" shopper!   I have friends who will put so much time, effort and planning into saving $50 on a Christmas gift, yet they can't seem to figure out why they aren't making the big bucks with their real estate investing.  Black Friday shoppers are basing their entire decision to buy on just one thing... the price!  

Have you ever been to a big real estate auction?  Prices get pushed up because of the competitive nature of people bidding against each other.  Don't ever be this investor.  Think like a Black Friday shopper, and only buy based on price.  Know your numbers in advance and stick to them.   If your max price is $200,000, don't agree to pay $210,000 because there is pressure.  

I recently dealt with an asset manager on an REO. I had made an offer at $260,000 and it was a fair offer. The asset manager came back and said, "we have multiple offers, so you need to come back with your highest and best offer." I came back and said, "you already have my highest and best offer!" I didn't hear anything for a week, but then I got the phone call. Guess what? They took my original offer. I see this all the time. Tactics are used to make you think there is big competition for a home. Stick to your numbers, buy everything on sale and then sell it for full price! Good luck and have a great weekend :-)

@George P. 

 It sounds like you are going to end up really well on this project and investment!  Thanks for sharing the numbers :-)

@MONICA WATSON If you can get $850 for a home that was purchased for basically $60,000, that is a great deal.  Here in my area of CA, you need to pay about $200,000 to get anywhere near $1,500.  You are getting about double that amount!  Here is another way of looking at it.  I pay cash for flips and wholesales, so I look at how many payments I need to receive from a renter if I ever had a hard time selling.

You paid roughly $60,000 and get $850, minus taxes and insurance. I have heard Houston has high property taxes that can go as high as 4%. What are you paying for property taxes and insurance?  I estimated $250 per month in property taxes and fire insurance.  If the home needs minimal repairs and you can keep it rented, you have $600 per month left over.  $60,000 divided by $600 = 100 months to recoup all your cash spent to buy the home.  That's just over 8 years to reimburse yourself for the entire cost of the home... that is really good!  In my area.

Congrats on doing so well. I would like to hear how much you were able to get it rent, once you have those numbers :-)

@George P. 

 First, congrats on what you are doing and the success you are having.  I am interested in the cash-flow numbers you are getting.  It sounds like you ended up paying $90,000 for the property and repairs and had to leave it unrented for 6 months to get it ready.  What will it realistically rent for in your market?  What kind of loan and interest rate (if any) will you have remaining once it is rented?  What is your long-term goal?  I mean, do you plan on keeping homes like this for a specific period of time, or until they reach a specific value?  I am always interested in the numbers behind the deals :-)  

@Michael Woodward 

Looks like a great opportunity for the right investor. I would do it, but I only loan my own money in California. 50% LTV and less is very attractive to investors, so I am guessing you will find someone soon. Good luck!

@Steve Vaughan @Andrea Jones 

 I laughed when I read @Steve Vaughan talking about getting tips!  I purchase all of my homes under my corporation.  I am usually flipping and wholesaling, so not dealing with tenants.  However,  @Andrea Jones I think Steve's way of doing things sounds pretty good :-)  I did play landlord in the past and I only wish I had remained anonymous.  

@Account Closed That is a great question!  Many of your seasoned investors, people who have experience and are making money, are on sites like this one.  I would network with and get to know people who are on this site, and who also live near you.  Look at their history, ask them if you can talk to them on the phone. Be honest with people about where you are and that you want to learn, and people will help you.  I have mentored many people in the real estate, private investing and lending world, and I continue to help others each day.  Most of us that have had success and make good money, are eager to network and help others.   Focus on those people who are actually doing deals, and ask them if they would like to spend some time with you each week or month and help you learn what they know.

To someone like me, the money part of it is very easy. I will either use my own money, borrow the money, or partner with others for the money. The hard part for me is finding the homes that are the good deals.  Learn how people find homes and how to do this yourself.  This is basically what wholesaling is... it's finding homes and entering into an assignable contract to buy them, and then selling them quickly to others for a higher price.  You don't need a lot of capital to do wholesaling. However, you do need to learn how to do it, and this is where mentors can be priceless!  

@Account Closed 

 There are so many opportunities for someone your age!  If I could go back to your age, here is what I would do.  BTW, I bought my first home at 19 years of age and sold it 18 months later for a 50% profit.  Education is valuable, and as others have said, being on a site like BP's each day, reading, listening to podcasts, and networking with others is a great way to start.  

However, let me be more specific.  Find 2-3 investors who are the real deal. I mean they have experience, ethics and a proven track record of making money doing what they do. Ask these investors to mentor you and help you learn what they do.  I have done this in my area many times for people, and it is an honor to help others.  I would get one mentor who specializes in flipping, one who does wholesaling and one who does buy and hold and is building a portfolio of homes.  

Once you have a little more knowledge, help them find these homes and ask for a fair cut of what you help them make.  In my area, I have people who help me find deals, and I pay them well for helping. It is not uncommon for me to pay 25% of profit to someone who finds the deal.  That person can be someone just like you!  Someone who desires to learn and make money, but has no capital themselves.  This is a great way to really learn the business and make money while you learn.  Make it your goal to put your money away, avoid debt and keep your credit excellent.  If you do these things, within a few years you can begin using your money to do deals and help others :-) 

Good luck with what you are doing and your future!

@Carrie Cathey Hi, I don't do any long-term investments. I only wholesale and flip. Yes, I would like to make more than 15% and often do, but 15% is the lowest number I will do short-term on a flip. If it is only 15%, I will look at the deal very closely to determine how fast I can get in and out and how solid the end value is with the home. There are not a lot of flips in my area that pay 25% + on ROI, unless you are adding square footage to the home or doing something else to significantly add value.

@Carrie Cathey 

I do everything short-term, so I only care about the ROI. If the ROI is above 15% on a flip, I will be interested. I mean, if I am buying a property and rehabbing it and my total cost is $300,000, I want to make over $45,000 as quickly as possible. If I am doing this several times per year, with the same $300,000, the total ROI can be over 50% ROI per year. I know there are a lot of people who like cash-flow, but I like raw cash, in my bank account ready to invest in the next great deal :-)