All Forum Posts by: Jamie McCauley

That is a very common and typical situation/mistake that we Investors all make when starting, trying to save every dime to make the most by doing things yourself. When you factor in the extra hold time for going slower and the fact you spent time doing physical labor rather than other more important aspects, you realize you made less going down that road.

That said, that very same real world lesson is crucial so I often invite new investors to try going the hire each sub version even though it is more time intensive and even doing things yourself as you learn how much it should cost to “swing the hammer” and how long it should take to do the same. Those life lessons in real estate really helped me with scaling my business.

It's not necessarily a "mistake", unless you have been in the trades, or a long time home owner, "doing it yourself" the first time (or few times) has the education benefit of learning what you don't know. Plus, on the first few, you just might not have the upfront cash to "hire it out"

For example, I do my own electrical in my personal residence, and from that, I NOW it doesn't "cost" a lot in materials for electrical work (aside from some specialty breakers, GFCI's, etc.), but the labor is more intensive than you might think, so that $3500 bid is not unreasonable, unless it has $2k+ in materials....I also know I am not going to do the electrical in my REI due to the time/effort involved even though I could save $2.5K on that $3500 bid...it's not worth the week It'll take me, plus the "permitting lag" that happens if you aren't a local tradie, which sets back pretty much everything else, drywallers, flooring, cabinetry, paint...etc. Same with Drywall, I know what good drywalling takes from having done my own, and choose to hang it myself, but hire professionals to mud and tape and do the skim coat. Painting...depends, etc. You find these out from doing.

But congrats! I don't do flips but maybe I should look at them :D +30k in 3.5 months....nice.

Jay

Thanks Jay!

The more experience I gain, the more tasks I realize are worth hiring out vs doing myself. Its been a learning process!

0 Votes

Originally posted by @Charles Holder:

@Jamie McCauley

Super cool.. did anyone help you in judging the deal and stuff.. super interested in this stuff but cold feet

Hi Charles!

Based of first glance, I believed the deal to be a good one. I am fortunate to have my mentor also be my realtor and contractor lol. So he can go through a house with me and estimate repair costs on site. We can offer no inspections then, too :)

Best of luck! You should totally go for it!

0 Votes

Originally posted by @Bob Prisco:

@Jamie McCauley thats ok, not great. but now what ? You need to do it all over again, Flipping is a job, dont get me wrong a good one. lol. I have flipped about 500 props in the last 6, 7 years. I wish I held more for cash flow. Residual is what its all about. I am actually making money as I type this LOL....... Wealth is created by long term plays, not fix an flip...... All the best to you

BTW after taxes, all your carrying costs, true net us about 20k. I assume it took 6 months ish start to finish ?

Bob it was not an amazing deal, but it was worth doing to me as I am looking to build capital for more rentals. It took about 3.5 months, which is longer than anticipated, but It was during the slow season of my main business so it didn't really hurt that bad.

2 Votes

Originally posted by @Daidrian Thornton:

@Jamie McCauley

Good job man!!!! Setting the bar high 💯

Thanks Daidrian! :)

0 Votes

Originally posted by @Aaron Sheagley:

@Jamie McCauley

I’m less than a month away from closing on my first flip can’t wait!

Congrats on your flip!

Awesome Aaron! Let's GO! Be sure to share your experience on the forum!

0 Votes

Originally posted by @Stephanie Drouillard:

@Jamie McCauley

That is awesome! I just watched your YouTube journey and loved it, well done! Are you going to be attending the Michigan Landlord and Real Estate investor conference in Grand Rapids this February? I would love to connect!

Thanks Stephanie! I haven't heard about the conference, but it seems very interesting to me! Ill check it out! thanks

0 Votes

Originally posted by @Terrence Davenport:

@Jamie McCauley Can you share the top 5 important items to consider or have in place before purchasing 1st flip?

Sure Terrence!

1. Knowledge Base - knowing how much things cost to repair, what needs repairing, what are ARVs for the neighborhood, etc...

2. Finances - you need a solid plan for how you are going to pay for the property and repairs. Getting a traditional mortgage is usually the worst way for flips because your closing costs on the loan will eat into your profits. You should also know how much money you will be spending in interest

3. Do you have time to be hands on? Things usually take WAY longer than expected if you are DIYing

4. Is it really worth your time? How much are you projecting to make and will it be worth your time. There is definitely a line between yes and no!

5. Are you cut out for it? Do you have the grit to finish the job? Do you have time/people management skills, etc...

Hope this helps!

0 Votes

Originally posted by @Jarrod Kohl:

@Will Barnard

Yes this is important. I had a lot of success in my first flip and did most of the work myself. Doing it with a contractor or even more helping hands cuts those profits quickly. But without contractors you won’t be able to scale.

True! I will get burnt out on gruntwork fast

0 Votes

Originally posted by @Brad Bartlett:

Congrats! I am a newbie and Flipping will be my first strategy to build up my real estate business. Thanks for the post... it gives me encouragement seeing your success.

Thanks Brad! Flipping is a great way to build capital for buy-and-holds or anything else. You can do it! Go for it!

1 Vote

Originally posted by @Deb S.:

@Will Barnard if The property was an investment property then I believe he could avoid capital gains by doing a 1031 exchange? If he lived in it then it would not be an investment property.

Deb,

Take a look at 1031 Exchange laws but I'm pretty certain that it does not apply to flips. Flip profits are taxed at your income bracket %

1 Vote

All Forum Posts by: Jamie McCauley

Jamie McCauley has started 3 posts and replied 56 times.

Post: Just finished my first flip! $30k profit!

Post: Just finished my first flip! $30k profit!

Post: Just finished my first flip! $30k profit!

Post: Just finished my first flip! $30k profit!

Post: Just finished my first flip! $30k profit!

Post: Just finished my first flip! $30k profit!

Post: Just finished my first flip! $30k profit!

Post: Just finished my first flip! $30k profit!

Post: Just finished my first flip! $30k profit!

Post: Just finished my first flip! $30k profit!