All Forum Posts by: Jackson Pontsler

@Laurie Clarkston and @Lynnette E. there is no quick option because there are SO MANY VARIABLES that can count a buisness expense.

Standard we talk about are:

• Rent
• Utilties
• Taxes
• Management

However these are some we don't talk about:

• depreciation
• internet and cell phones
• Your personal utilities
• Office rental
• etc....

There are so many options which is why I'm grateful for our CPA.  Instead of us having to taxes on income we were able to declare a loss and had the government give us money!  So many perks of being a small buisness owner and guess what your rentals are a buisness.

Congrats on your first rentals @Libby Baugher.  Basically monthly cashflow is the money you have AFTER everything is paid for, interest, taxes, management, reparis, vacancy etc...  In a simple example: $1000 rental.  Mortgage $700, Other expenses $200.  Monthly cashflow $100.  If you were to manage the rental yourself you can include that in your monthly cashflow but you should be really considering that money yours for putting that extra work into your rental.

Hope this helped.

If you let me know or just vote it up.

I see a lot of members of Bigger Pockets asking why they aren't finding deals. As a rehabber I can appreciate and understand the struggles that come from actively investing in real estate and finding a deal that makes sense. I just wanted to echo that it is possible and post a few tips on how you can find a deal.

1. Tell everyone you know that you are a REAL ESTATE INVESTOR
   
   • You never know where you deal may come from it could be a friend of a friend of a friend but you'll never meet that person if people don't know what you are doing.
2. Get your finances lined up
   • Do you go fishing without a pole or net? Many people say they want to buy a rental but in the off chance a deal comes their way they have nothing set up to capitalize on it. Preparation is key get your ducks in a row so you don't risk losing a deal because you have no financing available.
3. Educate yourself ABOUT YOUR MARKET
   
   • I don't care about tax lien notes, because I'm a flipper. I don't need to know that. What I need to know is what is a deal in my area and how I can execute my plan.
4. Market old school
   
   • You should always be looking for deals. This involves getting off your but write some letters, drive for dollars, knock doors, hang door hangers I DON'T CARE. The universe will not just magically put a property in your lap unless you are prepared
5. Market new school
   
   • I put another marketing in here because YOU SHOULD ALWAYS BE MARKETING but there are many ways to market. Build a website, post ads, post of forums the options are endless.
6. Get a good realtor
   
   • You need to have a good realtor on your team because you need to submit offers and a lot of them for lower than asking price. You agent needs to understand you don't low ball. You as a business are taking risk of buying an item and try to change it into an asset.
7. Find the power players in your field.
   
   • Someone is crushing it. Your job is to find out who and ADD VALUE TO THEM! Be their best friend clean their jobsite for free whatever it takes. As you network and build friendships with a person they can help you with a deal. I have a friend who got his first deal because he went skiing with a baller up here and because of that friendship he was sent a deal.
8. Join your REIA
   
   • Basically this is to surround you with people who think similarly, who encourage you. Your REIA is a great place to start and who knows you might find a deal there.
9. Get a good title company
   
   • You need a good title company for your deals, especially if you're a wholesaler. Not only that but when you start to really move and groove when deals fall out or if they have a short sale area in their company that is potential leads that you can work with.
10. Give to everyone!
    
    • This is part of networking and business in general but no one wants to work with some stuffy prick who only looks out for themselves.
11.  (Bonus) Be patient!
    • More than likely you won't find a deal super fast. I know its not the most sexy thing to say but heck It took my wife and I 50 offers on the MLS to get a deal. If you aren't ACTIVELY WORKING then you will get nothing; and when you are actively working you will be rejected alot. It is by working and being prepared that when a deal finally comes down your way you can do something about it.

Good luck to everyone who read this post and if you found this helpful please let me know or vote it up. If you have other suggestions for the people waiting to get their first deal please post them below.

@Dustin Gale

I think that its great for you to have add value strategy in mind.  This is a great way to network and can lead to your goal of potentially making money with an add value strategy but won't make it right away.

For an example I have a friend who is an interior designer and works with rehabbers to make the houses zing.  When she firsted started she didn't charge anything only looking to add that client to her portfolio.  After a few rounds and a few clients she began charging for her services cause now she has a track record and trust.

Similar to you, you don't have a track record and if you ask for a percent of the add value and they loose money then logically you would owe them money.  If you look to be a good investor add value to people they will begin to trust you and will trust you enough to become a private money lender or after a while you can charge a consultation fee for your troubles.

I hope this helped.  If so let me know or vote it up.

Welcome to the world of wholesaling @Bryan Venable!  As a flipper who purchases from wholesalers I  can vouche that when I get a chance to do inspections I'm very grateful because it doesn't happen often.  This isn't because a wholesaler is mean its because he/she doesn't want any tire kickers.  There are many different ways I've handled this.

1.  Due the due dilligence before you sign the assignment (doesn't work well with contractor quotes but might work for a regular home inspector depending on the wholesaler)

2.  Go with the worse case senario and present that if you can verify that it is only 30k repairs you will sign the contract today.

3.  Do it and brace yourself, always make sure you aren't going to lose money and have some sort of buffer.

4.  Don't do and wait for the next one to come along. 

Options that challenge the people should only be used sparingly as they can cause stress and potentially ruin the buisness relationship you have. However, most people are understanding and if you come to them and show them the facts (i.e. hard numbers not just MAO formulas) they will be more willing to work with you because they know that when they send out a bad deal it just looks bad for them.

Hope this helped if it did let me know or just vote it up.

@HAILEY ERSKINE I admire your gumption.  I have a six month daughter and she is a light in my life and also alot of work.  I want to level with you 100% because I don't want anything bad to happen to you or your daughter and to be honest if your not careful you will lose your shirt in real estate.

1.  It will be hard to get a new house if you are unemployeed even with a turnkey company because they will either act or connect you with a bank to purchase the house.

2. That leaves us with you pulling out your money and buying a house in full. I'm assuming its some sort of HELOC because if you refinance the bank will once again look at your financials and employment. If that is the case be very careful that your HELOC (with interest payments) will be paid with the rent from the new property by a healthy amount to help for tenant turnover and repairs. This is much easier said than done.

3.  If you want my honest opinion.  I wouldn't invest in a rental right away keep your money and keep with the house flipping but do it smart.  Use the BP calculators build up the income so you and your daughter can live off of it and hopefully as you scale you will progessively have enough cash to purchase a rental a year.

It isn't as sexy but for me and my family safe is sexy.  I can only tell you want I would do if I was in your situation and ask you to be careful of your next move.  Many people go completely in when they don't have too, thats not what they teach us here at BP.

@Evelyn Tilman there is a lot of loose variables as a flipper that would make or break a deal.  So lets go with the idea the owner is carrying the mortgage and will pay it without effecting the deal.  Interest on the repairs 8%.  Rough estimate there will roughly 35k profit in the deal.  If this is split in half the rehabber will make 18k.  

18k is not enough to incentivise a flipper.  There is too much risk, cost usually are higher especially if its is a higher end home with repairs, fixtures/applicances, using a realtor to sell the fnished home and wait time.

Normally a flipper has to make at least 25k.  If its a higher end with more risk we are looking for in a minimum 35-40k range.  

Currently the house is too expensive for a flipper to split, only if the flipper has all cash on hand to outright purchase the house does it meet some minimum requirements.  Once again this isn't because the flipper is greedy but most of the times when it comes to repairs, arv, wait time there is so many unknowns we have to protect ourselves from losing money when it would have been easier and better to buy a cheap house and make 25k.

If this was helpful please let me know or just vote for it and I'll know.

1.  PURCHASE AND SALES AGREEMENT (one that says you can assign)

2.  Earnest money deposit

Side notes

Make sure he's on title and can sell the house.

Make sure you get it at the price where you can wholesale it easy

Find a title company or real estate attorney

Get comps

If you found this helpful please vote it up to let me know.

I hate that word (low ball).  What you are doing as a buisness person is assessing the price of purchasing an asset.  If said asset is making you lose money then to you, and apparently that market, the property is a liability.  So your job is to find the price that works for you, don't be afraid to tell your realtor your criteria.  (Side note telling them your criteria helps them see you are a serious investor and not a tire kicker).  Make the offer and if not accepted move on.  My wife and I make 50 offers to find a deal that works for us.  Its tough but if you get a good agent then eventually it will happen.

If you found this helpful let me know by voting it up.

Depends on how long the bank has owned the bank and if the property is a hazard to the community.  

When coming to a bank its your job to make a case that the property is worth the price your offering and it can be a lengthy process.  Most banks get a Brokerage Price Opinion for what the property is worth and you have to show the hidden flaws in the arguement, hidden repairs, and dangers of the house and how difficult it will be to sell it.

In all honesty this conversation can take a long time I had some training on it that was 10 hours long. But more than likely the bank won't want to sell it as a flip and if they did you would need to hold on to it for a period of time till you could sell it (or an LLC that is the owner of the property).

My best advice is:  You probably will need an agent (more credible that you), find the reasons its worth the price you are offering, and build connections with the bank (meaning constantly following up).  If you find this helpful please let me know or just vote