All Forum Posts by: Glenn Espinosa

Hello guys! I'm working on increasing the efficiency of my company's materials processing and am looking for ideas. How are you guys managing materials processing? What issues have you experienced in the past and how did you resolve them?

For example, we've identified shopping for bath finishes and piecing design elements together from different stores as an incredible inefficient use of time, i.e., buying ceramic tile at Lowes because they have a $0.59 sale then going to HD for mosaic tile because they have the design we want all while continuing to source faucets and vanities at cabinets-to-go or ikea. Throw in problems arising from product availability, shipping, returns or something simply not fitting right and you get the picture.

We've done the bid room, we've done spreadsheets and SKU's but even with all that sometimes we still run into snags.

I'd love to hear other people's process, especially the guys turning 10+ deals a year.

For the guys who are just starting, what problems did you encounter in your first few flips regarding materials?

Here's an interesting article I read this morning that pretty much reiterates everything we've been talking about here on BP the past 6 months:

http://money.cnn.com/2013/05/20/real_estate/amateur-investors/index.html?iid=s_mpm

I have nothing against new investors but I can't help but cringe at some of the "deals" I see people snatching up in my local market. If anything I question their timing.

I know a lot of guys are transitioning from flipping to wholesaling and prehabbing. Some guys are getting out all together and waiting for the next bubble. I, for one, am starting to become leery of acquiring anything right now. But, I admit, I'm quick to jump off the wagon on everything I do.

How are you guys adapting?

Lafi S. - Mixture of both.

I agree with J Scott in that buying your own staging furniture is a great investment especially if you plan on staying in this business for a while.

Stores like Ross, TJ Maxx, Marshalls, and IKEA are great places to find cheap staging furniture.

Michael Quarles - Very nice checklist. It looks like the ideal process for a lipstick flip.

One thing that we like to do is to finish the front facade/landscaping somewhere in the middle of the project as opposed to the very end. That way if a potential buyer happens to drive by they can get an idea for the finished project and add it to their list of homes to see.

I wish I could find decent birddogs and wholesalers in my area. I'd love to pay finders fees as long as my numbers work. Unfortunately, like Jon most of the "deals" I get via email from wholesalers are just plain laughable. No one can rehab a 2,500 sq ft house built in 1920 for $15,000 - it's impossible!

Anyway, I don't understand these guys who try to go around the middle man - always thinking about the short term profit and not the long term relationship potential.

The video tour of the property is complete and I am pretty happy with how it turned out. Unfortunately, due to weather issues (clouds and rain in the forecast) we decided to film a day early to final completion - we were maybe 99% complete with the project. You may notice a few things that I wish we could have cleaned up but alas it was too late. Also, the kitchen is missing a corner cabinet and the driveway was poured the next day. I don't think the pictures did the place justice but the video helps a little.

The property has an exit value in the low $200's and has been on the MLS for about a week - very positive remarks but still waiting on that special buyer who falls in love. It is our first eco-friendly flip and we've learned quite a lot from the project. We're anxious to see what kind of response we get regarding the eco-friendly/efficiency/comfort features of this home. From there we will adjust and tweak for future projects.

Please watch it in HD and enjoy the music!

Let me know what you guys think.

http://youtu.be/Inqlq1gfbNY

Glenn

I've read through it twice. Very easy and informative read. I especially like the tax strategies that Rich mentioned throughout the book. Nothing too concrete and in depth but very eye opening principles for us tax code laymen.

Overall, Rich Weese's story is awesome and very inspiring!

I agree with Bryan A. in that you could probably do better to just loan the money as a trust deed investment with personal guarantee as opposed to structuring a JV or something similar. If he has done "fifty or so" builds around town like he says, he should be pretty well versed in the trust deed process.

Personally, and somewhat depending on how much you have to invest, I think you can do better than 10%...

If I were in your shoes and serious about moving forward I would want to know a few things first about this builder. For example:

1) Length of time to build
2) Exit Value, profit spread, recent sales supporting exit value
3) Construction draw process
4) Construction commission structure (how much will he charge as a GC fee, how does this affect me in the case that we were doing a profit split)
5) Can I walk thru previous and current deals? Can you provide HUDS from previous deals?
6) What recourse do I have if you stop building?
7) What recourse do I have if the house doesn't sell on time and for what we planned?
8) Who handles all the paperwork, if any?

Some of those questions you should already have a good understanding of what the answer should be but will help you uncover a person's underlying motives (if any) and overall experience depending on their answers.

Anyway, theres a ton more that I would want to know up front but the above items should get you started.

Ron Clarke,

There seems to be a big influx of new investors coming out of the wood work in the Mid - Southern Virginia region. This is great and I am working on organizing a big meeting for a bunch of us BP'ers in the near future.

I currently flip around Hampton Roads but have been planning to invest around the Richmond area for some time now. There is a lot of opportunity in that area as you might now.

Let me know if you're interested in going to a Virginia BP get together - I'll add your name to the list.

Glenn