All Forum Posts by: James Guillot

 I believe "should not" is the wrong choice of words. If you had said, "don't have to" I would agree with you. It's not something I've see very often, but yes I have seen it and it has been very helpful. If you're capable of paying all cash for a property, that's great! In my experience, the majority of investors prefer to spread that cash out among several properties, not drop it all into one. While hard money isn't good for that, there's a reason there is so much of it around. People use it. If I could find another wholesaler who understood lending in general and calculated that in when negotiating a property, they would immediately become my favorite. If I choose to leverage, it's covered. If I don't, there's more room for profit. There's no downside.

Hard money aside, lending costs money, and it should absolutely be factored in.

@Joe Villeneuve, a car has the same purpose from purchase to sale. It isn't the best example. But let's use it anyway. If I parked it in the garage and didn't drive it, it would use no gas (utilities). Same with a house. All items you listed, other than gas, are the costs of having the car and were accounted for in the numbers.

If I had a need to sit down and evaluate how much I spent on the car, gas would not be a factor, because it varies based on what I used it for. Unless I were itemizing for tax purposes, I would never track that number, and even if I did, the IRS has specific uses allowed for itemization of gas. Personal is not one of the allowed uses. The only other reason I can think of would be if the car was being used for commercial purposes. That compares best with a switch from personal residence to investment property. As soon as the car is used as a commercial vehicle, every dollar would be tracked (which it was).

How do you figure? Those were personal costs spent on myself and my family. Even when I decided to sell, those costs were not for operation of an investment, but for the comfort and well being of my wife and children. Regardless of whether or not the property was eventually used as an investment, the time as a primary residence would not factor in unless I was using it as a primary residence specifically as an investment strategy (avoid capital gains, wait out the 1 year requirement for VA, etc.). In this case, while I had intention to eventually use it as an investment property, living in it was not directly a part of that strategy, it was to provide my family with shelter. Because of that, every dollar I spent on my family in that time fell into the same category. While we lived there, the only dollar amounts put into operation of the property as an investment were the mortgage, escrowed taxes and insurance, and the home warranty. If I had made any repairs or updates, I would factor those in as well. Luckily, the property was only a few years old and we didn't break anything bad enough to have to repair or replace it.

What form of calculation are we using here? Are we making calculations for a bank, taxes, or just basic deal outcome analysis? For a bank, you MAY be right depending on who is analyzing the deal's final numbers, but even then I believe many loan officers would agree with me. 

@Joe Villeneuve I respectfully disagree. Utilities paid for to provide my family with water, electricity, and climate control are personal expenses. They end up on my family budget, not the investment budget.

 Sorry, now that I have some time, let me walk you through the numbers. (all numbers are rounded, unrounded doesn't look much different)

Before I get into this, I want to acknowledge that you were right, I did miss something when putting those numbers together. I'll explain at the end.

Mortgage: $1,700 x 2 years = $40,800

After the second year, the mortgage was adjusted based on a higher valuation and therefore higher property tax.

Mortgage: $1,750 x 2 years = $42,000

Keep in mind that this was a VA loan. $0 down, taxes and insurance escrowed.

Utilities were used by my family and I and do not qualify as an investment expense. (I'm sure for some people, that's up for debate, but not with me)

Rent: $2,800 x2 years = $67,200

Non-refundable Deposit = $5,600

So far we have 40.8k + 42k = 82k out, and 67.2k + 5.6k = 72.8k in.

82.8k - 72.8k = 10k out

Here is what I missed. I also payed for American Home Shield for all four years. At $70 a month, $3,360 should be added on top. Additionally, I filed two claims in those four years. I got the refrigerator replaced, and also the range. With both $100 deductibles, we are up to $3,560. I will also include a partial amount for cleaning. The cleaner was a friend who owned a cleaning business and offered to do the pre-list cleaning. She owed me money for a vehicle I provided the funds for. I will count that as an expense as I traded a portion of that debt for a service. I will add $200. Additionally, utilities for listing were minimal, but still existed. Checking back, those add up to approximately $520.

So now our grand total is $10,000 + $3,760 +$520 = $14,280

I hope that cleared up any confusion. Thank you for checking me on that. I missed that when answering all the questions.

@Joe Villeneuve, I assure you, while it is rounded to the nearest whole thousand, 10 WAS the cash invested. At 3.6%, mortgage was low and rent was high. Once I subtract rent collected vs mortgage payments and expenses (for the property, not my family), that's how it penciled out.

Investment Info:

Single-family residence other investment.

Purchase price: $329,000
Cash invested: $10,000
Sale price: $380,000

Purchased with a VA load as my primary residence. I moved in 2023 and leased the house to a construction company out of Oklahoma City housing workers while they worked on a road between 2023 and 2024. Sold in 2025.

What made you interested in investing in this type of deal?

I was just getting started in REI at the time. It was purchased as a primary residence with the intention of renting after PCSing to another duty station.

How did you find this deal and how did you negotiate it?

I found it on market at full price. The market was vicious around that time and houses were selling for over asking. I had been beaten out on several offers on different houses around town. I'll admit I was getting frustrated and running out of time to find a place for my family. I had to offer 10k over asking and barely met the appraisal amount.

How did you finance this deal?

Simple, VA loan. 0 down, 3.625% interest rate.

How did you add value to the deal?

I leased the house to a construction company and negotiated price reductions on rent and furnishings for small improvements to the property.

What was the outcome?

I didn't make much after closing, but my network had fallen apart by the time the lease was up and I didn't feel like holding it.

Lessons learned? Challenges?

My top three:
1. Always have a good support network for investments out of your local area.
2. I learned how to structure a corporate lease and barter for labor
3. If your realtor isn't doing their job, move on at the first opportunity to do so, don't wait.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Not in this one. Unfortunately, I only worked with a realtor, and I should have moved to another one when she was missing basic tasks like checking on the property while listed, making sure the cleaners actually cleaned, put the smoke detectors back up before the VA inspection (removed by cleaners), etc.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $59,000
Cash invested: $90,000
Sale price: $150,000

This one came with a lot of stress and heartache. The contractor stopped working and his crews did quite a bit of bad work as well as damage to work done earlier in the rehab. My family and I moved out of state in the middle of the rehab and I was not aware of this until it was too late to adjust course. There was enough room in the profit to redo the work and cover holding costs for the extended holding time. I walked away with approximately 1k and a mountain of lessons learned.

What made you interested in investing in this type of deal?

I enjoy flips. I enjoy taking something neglected and beat down, then turning into something shiny and new. I have a strong base in construction, so naturally, flips just fit.

How did you find this deal and how did you negotiate it?

I found this deal on an online auction. I calculated the worst case scenario for rehab and my numbers still worked, so I got it sight unseen. There were little to no bids, so the competition was basically nonexistent.

How did you finance this deal?

This deal was financed with two sources of private money. The purchase (including earnest) was 100% covered on one end, and the rehab was covered 100% on the other end.

How did you add value to the deal?

I paid in sweat equity by locating the deal, creating the scope of work, finding the funding, doing some of the work on the property, and taking full responsibility for the setbacks.

What was the outcome?

Read the description.

Lessons learned? Challenges?

Oh boy did I learn some lessons. My top three are:
1. Always have a contract, never trust in verbal agreements
2. Always have a reliable network to assist when I can't physically be there
3. Never feel sorry for yourself. It helps no-one and allows problems to grow. I despaired and wasted precious problem solving time moping, and as a result, ended up holding the property much longer than I should have.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Not in this case. The agent failed me, the contractor failed me, and the lender does not lend as a profession, he does buy and hold on a large scale and does not use BP. This deal was an exception. I was the point of failure, but I would definitely not recommend anyone who had a hand in this deal.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $59,000
Cash invested: $90,000
Sale price: $150,000

This one came with a lot of stress and heartache. The contractor stopped working and his crews did quite a bit of bad work as well as damage to work done earlier in the rehab. My family and I moved out of state in the middle of the rehab and I was not aware of this until it was too late to adjust course. There was enough room in the profit to redo the work and cover holding costs for the extended holding time. Once everyone got paid, I walked away with approximately 1k and a mountain of lessons learned.

What made you interested in investing in this type of deal?

I enjoy flips. I enjoy taking something neglected and beat down, then turning into something shiny and new. I have a strong base in construction, so naturally, flips just fit.

How did you find this deal and how did you negotiate it?

I found this deal on an online auction. I calculated the worst case scenario for rehab and my numbers still worked, so I got it sight unseen. There were little to no bids, so the competition was basically nonexistent.

How did you finance this deal?

This deal was financed with two sources of private money. The purchase (including earnest) was 100% covered on one end, and the rehab was covered 100% on the other end.

How did you add value to the deal?

I paid in sweat equity by locating the deal, creating the scope of work, finding the funding, doing some of the work on the property, and taking full responsibility for the setbacks.

What was the outcome?

Read the description.

Lessons learned? Challenges?

Oh boy did I learn some lessons. My top three are:
1. Always have a contract, never trust in verbal agreements
2. Always have a reliable network to assist when I can't physically be there
3. Never feel sorry for yourself. It helps no-one and allows problems to grow. I despaired and wasted precious problem solving time moping, and as a result, ended up holding the property much longer than I should have.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Not in this case. The agent failed me, the contractor failed me, and the lender does not lend as a profession, he does buy and hold on a large scale and does not use BP. This deal was an exception. I was the point of failure, but I would definitely not recommend anyone who had a hand in this deal.

 I've definitely noticed less and less quality come into the wholesaling space. It seems like not only is the poor quality making the good ones look bad, it seems to be chasing those same good ones away. It would probably be worth it for someone to throw a few million into creating and advertising a real class for real quality wholesaling. There's too much BS education out there making too much noise.