All Forum Posts by: Jeff Copeland

Fellow veteran here in St Pete. Happy to network and share deals. First cold beer or hot coffee is on me when you get back to FL!

@Aaron Schwartz - You can just run a search for sold properties (you can filter the search by map, address, zip codes, date range, and other criteria just as if you were looking for active listings or comps). 

The only extra thing you have to add to your search filters is the "Financing" or "Financing Available" field (you may have to manually add this to your search filter options using the "Add/Remove Additional Fields" feature the first time you do it), then select "Cash":

Your MLS may vary slightly, but they generally all have this functionality. It's a great way to find recent cash buyers!

An LLC is more for asset protection than tax advantages (though it may provide some tax benefits if you opt to tax it as a corporation...talk to your accountant).

Example: Contractor falls off the roof and breaks his leg at your  property. Even if he doesn't intend to sue you, his insurance company almost certainly will (called subrogation).

If the house is in your name, they would be sueing you personally, and going after all of your personal assets and income...anything that is in your name is fair game.

If the house is in the name of your LLC, they can only go after the LLCs assets.

Many people form a different LLC for each property (or every 3-5 properties) for this reason.

Similarly, if something like this were to happen, you might have the option of declaring that particular LLC bankrupt without affecting your personal credit (personal loan guarantees notwithstanding), and you might still have several other LLCs that are still operating and financially sound...the bankruptcy of one does not necessarily affect the others.

So it's a matter of not putting all your eggs in one basket (and not mixing personal eggs with business eggs!).

Forming an LLC is quick and easy, and well worth it. Note that for courts to uphold this protection, the LLC truly has to be a separate entity, with separate bank accounts, etc.

@Dennis Sprague - I just flipped a house with very similar numbers, and I did a lot of the work myself to make it work (my rehab numbers would have been closer to yours or even higher if I didn't). 

In this price range, holding costs are usually pretty low, and you're likely to sell to an FHA buyer, which means you can't sell it to them for 90 days anyway. Don't let the naysayers discourage you. Add an extra month or 6 weeks to your timeline and make it work.

You'll find your first flip with amaze you with what you didn't know you didn't know, and your next one will be immensely easier. 

Good luck!

We recently had surprising success on Facebook with pre-MLS marketing. The property was a flip, so I created a Before and After Album on Facebook, then I boosted the post for $60 to my target demographic.

I wasn't really trying to sell it via Facebook when I posted the pictures (to be honest, i wasn't sure I even wanted potential buyers to see the "before" pictures!) - I just thought it was a good way to get some likes and promote my company - I know everyone is addicted to before and after pics and the rehab shows on HGTV.

There was a flurry of activity on the Facebook post and people started tagging their friends who were looking for houses.

When I stopped by the property on my way home that day, there was a buyer sitting there waiting for me. By the next day I had two offers in hand at full asking price - both directly as a result of Facebook! Cost me $60 rather than a 3% listing agent fee (I still paid the buyer's agent because the buyer already had one), and I also got like 100 new likes to my company page on Facebook (which was all I was really hoping for in the first place!).

In my county (Pinellas Co, FL), the property appraiser lists a "Taxable Value" (used to calculate property taxes and not really correlated to anything meaningful as an investor), as well as a "Sales Comparison" value. 

The latter is the property appraiser's (the database, not him/her personally) attempt at comps. It's a very rough number (as are all mass appraisals), but I actually find it very useful as a screening tool.

Why? How? 

Because through experience, and by comparing it to actual sales, I've found it's consistently 25-30% below retail/ARV. Looking at that number on the property card, plus the "Zesimate" on the Big Z (which sometimes has even more variability) can give me a pretty good ballpark range of ARV in about 2 minutes, from my cell phone.

If those two numbers are way too low to make the deal work, then that's all I need to see. I scratch it and move on to the next one. But if the deal looks good at a glance using these two numbers, then I move forward and look at actual comps in the MLS to get a clearer picture.

Anyway - I assume the "Value" field you're referring to is something similar, and I suggest you try to use it to your advantage by figuring out how accurate it is and how much variability it typically has.

Hope that helps!

You can do a lot with $50k and good credit (if you have $50k cash on hand, I assume you're not bankrupt?). Here is a recent example of a flip we acquired for less than $50k.

Granted, you'd need access to additional funds for the renovation, but if you can work out a deal with a hard money lender or partner, why make $1k on a wholesale deal when you can make $20k by flipping the same property?

Note: Having $50k in the bank will help you immensely as a wholesaler though, because you can provide proof of funds with your offers. That's a huge advantage over someone with no cash on hand.

Personally, I like to have multiple exit strategies. I never put a house under contract that I don't intend to purchase, but if I can get out quick with a wholesale deal, make a reasonable assignment fee, and never touch the place, sometimes that's a great exit. 

On the other hand, I'm always prepared to flip it or hold it myself as secondary or tertiary exit strategies.

First of all, it's Wholesaling (not Whole Selling). I'm not knocking you or making fun - but getting the lingo right is an important early step!

If you don't have any cash, wholesaling can be a great (and possibly your only) option. But it's not as easy as it sounds. 

A lot of stars have to align for a wholesale deal to work: You have to find the the right property, at the right time, with the right seller who is willing to allow you to assign the contract, then find a real estate investor for whom that particular property is a good fit at the right time. That can take up a ton of your time.

That being said, work backwards - find a few local rehabbers/flippers who are active in your market and find out what exactly they are looking for first, let them know you want to "bird dog" (find properties) for them, and make sure they are interested in having you bring them deals - only then should you go out and try to find the deals that fit all the right criteria. 

A good rule of thumb is to never put a house under contract with the intention of assigning it to another party unless you have that other party lined up (preferably with a backup or two) and are certain they will be interested in the deal - it doesn't take much to get a reputation as a wholesaler who signs the contract, but never assigns it and closes the deal - and in that scenario, you run the risk of local sellers and agents ignoring your offers.

Ideally, you want to have multiple exit strategies: If you can't wholesale it to Investor A, then wholesale it to Investor B, and if that doesn't work out, maybe have hard money lined up to buy it yourself (which brings up another good rule of thumb: Never try to wholesale a property you wouldn't actually buy yourself).

Hope that helps a little!

I believe you want your comps to be as comparable as possible (pun intended). If you intend to do a high-end rehab, then look at similar properties that were rehabbed to a similar level and then sold. If you intend to do a basic rehab, then look for recent sales that were in similar condition.

Rarely are you going to find an exact match (unless you're looking at townhouses or condos - then it can be much easier), so you (and the appraiser) have to infer the value of things that don't match up exactly. 

For example - Consider two homes the same size and in very similar condition, one with a one car garage, and the other with no garage. 

• If the house with a one car garage recently sold for $110k, all other things being fairly equal, an appraiser might deduct $10k for the value of the garage and value your property at $100k. 
• But if your property has a high-end kitchen and the other one doesn't, an appraiser might add $10k back and value yours at $110k.

You might try to get your hands on a few appraisals to learn how appraisers value a property and add/subtract value based on features, square footage, and fixtures/finish.

While I'm sure this varies wildly, I've found that some realtors rely too heavily on automated comps or CMAs when valuing properties, and these can be off by a wide margin. Ultimately, the appraisers word is gospel, so it really helps to understand their processes and duplicate them as best you can when looking at comps.

Hope that helps!

Hi John, I can definitely help! I am an investor myself, and also an Assistant to a real estate agent who is also a close friend and manages several condo rentals through an agency on St Pete Beach. Depending on what level of service you're looking for, we can do just about anything. You can reach me at jeff [at] copelandmorgan.com.