All Forum Posts by: Jeshua Patrick

I just closed my first wholesale deal. It wasn’t intended to be a wholesale deal initially. I started a handyman business in the spring and late summer I walked into a property that the owner was trying to fix up to sell. I made an offer and they accepted.

Unfortunately due diligence revealed some unknowns and the price no longer worked for me. The sellers wouldn’t budge and so I was scrambling to find another buyer. The price was too high, I had an issue with an investor agent who tried to pull some unethical swindle on me, and I was running out of options fast.

One last desperate phone call to a retail listing agent I trusted led me down a rabbit hole of several referrals chained together until I got in touch with someone who owns a house buying franchise and has a couple Wall-Street buyers in his back pocket. He agreed to pay me a $2500 assignment fee and, about 6 weeks later, actually closed the deal.

Lessons learned:

Don’t quit on a deal until you’ve exhausted every possible outcome. You may find your answer in an unexpected place. This doesn’t mean to string along a seller for a significant period of time. I completed all of this in about 2 weeks and was prepared to terminate the contract.

I usually charge $2/s.f. for floating laminate plus trim including removal of old floor (extra for glued down products like engineered hardwood) and could do a job like that myself in 2-3 days. Installed price for a click and lock should not exceed $5-6/sf including materials in most situations. Haul away and delivery would be extra of course.

@John Warren thanks for the encouragement. I will look into Trello for sure.

COVID-19 has, as I’m sure is true for many, thrown some curveballs into our plans to say the least.

My wife was studying for her RE license and got her test in the nick of time (think minutes difference between being allowed to test and having her test cancelled). Unfortunately for her the market for those services has contracted significantly given that she has no experience in that field. She has since left a retail job of 20 years for another retail job, albeit PT.

I currently have a good paying FT job but during the course of selling the one rental we had to pay off the wife’s 401k loans we were convinced by the listing broker that it was a good idea to start a Handyman business. Despite his encouragement for me to quit my job and jump into the Handyman business FT right out of the gate we elected to start it as a side business. After only 2 months and very little spent on advertising it appears that we may be on the verge of outgrowing our britches and being forced to a decision sooner than we had hoped.

I should mention that we have known this listing agent for 10 years and his advice has always been right on the money. He has offered some assistance with SEO although it might be worth paying someone just to get some of it done faster. In addition, he has offered to plug us into a FB networking group he runs that is exclusive to RE agents and has roughly 6,000 members within an hour of us so I doubt we would lack for work.

The benchmark to replace my income is $350/day, 5 days a week. At $420/day, 5 days a week I can replace both of our incomes completely. While it has been up and down to this point we are now 3 weeks out on work at 2-3 days/week and starting to accelerate. I believe if we go FT, bump our advertising to $10/day, and get the plug from the RE listing broker we would be swamped.

At what point would you go FT if it was you? Can you recommend an inexpensive CRM software to help us with long-term growth and customer retention? Anything else in particular you would recommend we consider as we prepare for this slightly scary, exciting decision in our lives? The only big negative I can think of at this time is on the investing side where we want to grow simultaneously but will be losing almost 100% of W-2 income when we pull the trigger so lending options will be limited for at least 2 years.

@Kyle J. FHA loans used to be assumable. Not sure if they still are. I don't know about conventional mortgages. It likely depends on the originator and possibly when the note was originated.

We stepped back because we are more on the cash poor side and waiting to see how long they drag this shutdown out or if there is a second wave. We are starting a new business on a PT basis though and hoping to position ourselves to hit the ground running hard FT by next spring. If all goes well this will significantly boost our cash position and allow us to take advantage of the next wave of opportunities.

@Evan Bonnell one more thing. You might still consider starting to convert some of your traditional 401k funds to ROTH if your employer will allow it. Consult with the appropriate financial and tax advisors before doing this though.

@Evan Bonnell I would offer a different thought that, although it won't help you short-term, may benefit you long-term due to current lower taxes. Instead of taking the money out why not, if you can, move it into a Self-Directed account from someone like MySolo401k (my experience with them has been fantastic) and then convert the funds over to ROTH over a few years? You can invest in RE in many ways inside a SD retirement account and also in the market. I would caution you to take the time to learn the tax differences between how a SoloK and a Solo IRA work; however, you will likely save a significant amount in taxes at retirement with this approach due to the low tax rates we currently enjoy.

This is not intended to be tax, financial, or legal advice so please consult the appropriate professional before making any decisions.

@Kevn Wolf if it were me I would probably start looking for properties close to the University that could become student housing.

Don’t be afraid to look as big as a 4-Plex depending on price. Look for 2-3 BR units at least since you will want to rent by the room if possible. This will net you your highest return.

I would look to go FHA for financing at first but plan to refinance in a couple years once this virus blows over. This way you will only need about 5% plus a couple grand for closing. If you can find a HUD foreclosure even better as they offer down payments of as little as $100 down plus closing costs for owner occupants. You only have to stay a year. My first two houses were $100 down HUD foreclosures and I brought less than $2k in total to close each time.

Also, I would recommend picking up a credit card designed for someone looking to build credit. I think Capital One still has a great student card. BE CAREFUL with this though. You need revolving credit if you want to build credit quickly but it’s easy to bury yourself in debt if you don’t take it seriously.

Lastly, while you may need a W-2 job to get a loan initially, start learning how to do handyman jobs now. If you are house hacking it will benefit you but, at least in my area, the hourly rate you can earn is much higher than you could dream of at your age in a W-2 job. Think $40/hr+. Get started with that ASAP as you will need 2 consecutive years of earnings before banks will let you use it towards a loan. Also, consider focusing your degree in a trade like construction, engineering, HVAC, etc. These types of fields will net you much higher starting offers and better pay long term than any liberal arts degree could dream of. Do your research and make sure the starting and average pay are high enough. Best of luck to you sir!

Welcome to BP. I am in Landis myself but love the Concord area. Do you ever attend any of the Metrolina REIA meetings in Kannapolis?