All Forum Posts by: Account Closed

This is great feedback Irina - As I get more responses and advice I am starting to get more clarity.  Definitely want to double down on my flips and get more profit out of them.  In terms of getting an RE license - do you think it would be worth it to just get commission on listing my own flips?  I don't intend on being a regular agent and helping people buy houses.  I have a FT job and that would just require way too much.

 This is inspiring - thanks JW

The difference between having one house paid off where you get 1k vs. 10 houses at $100 each producing 1k is the pay down.  With the one cash house - you would still just own house in 30 years paying you 1k per month.  With 10 leveraged houses - you would own 10 houses outright - with a monthly revenue of 10k vs the 1k.  This doesn't account for depreciation etc. etc.  but just a simplified run down to illustrate the difference from what I've gathered so far on Bp.  I'm still a noob though so if I got that wrong - someone please let me know.

Some reasons and opportunities for improvement may be...

1. My all in has been only about 135k (on avg) - so smaller deals.  There's an opportunity with my funding.  Up until now my deals have been equity partnerships.  I have split costs and profits 50/50 with my investor.  Starting with my next deal I will be using hard money instead.  This will allow me to get a better return on my equity.  So instead of splitting the all in costs of 135k on one deal, I can do two HML deals (and bigger deals at that).  So as an example on a deal where I would be all in at 200k vs. 135k I would need to pay out about 35k or so.  (20k dn, 5k points, 9.5k interest for 6mo.).  So essentially I could do two deals for 70k vs just one.

2. I have purchased my deals from wholesalers - There's an opportunity for me to find my own deals via marketing which would give me larger margins.

3. I pay an agent to sell my properties - There is an opportunity for me to become an agent myself and save the 3% expense when selling the property.

I agree with you though there is definitely opportunity to increase my margins.  - Great question.

@James Wachob - what an well put together response.  Thanks for that - I'm sure that will help many of us.  How long many years do you estimate your acquisition phase taking?

@Caleb Heimsoth - I am only on my third flip.  Still a noob a this.  I also picked up my first wholesale today - that was pretty exciting.  Why do you say most people loose money on flips though?  My mentor has been doing it for about 20 years and doesn't loose money, I have a friend that has done about 5 or so and hasn't lost money.  And fortunately I haven't lost money either.  

Burned the boats - love it.  No job = Failure is not an option.

Best, 

-John

@Thomas S. - thank you for the feedback.  I am assuming there will have to be a lot of adjusting and adapting along the way.  Will definitely have to take it one property at a time.  

Would you mind sharing your thoughts on the following?  How well would you think these would hedge against changing market conditions/corrections?

1. Working to get properties at a steeper discount via marketing.  

2. Buying rentals in a moderate income area.

@Bryan Chuchta - very nice lol

@Caleb Heimsoth - Holy Cow - Thats a lot of info and very specific.  Much appreciated.  Well so here is where I currently stand with all of this.  I should have mentioned earlier what my goal orientation is.  I am looking for massive wealth.  Not necessarily passive wealth.  It seems to me that some people will set up a business that creates wealth and then invest in real estate for its many benefits, taxes, passive income etc.  I think where I am currently is I am comfortable flipping houses - but I need to get to grow my income so I have a few things I am thinking about...

1. Continue Flipping.

2. Introduce a second strategy (Wholesale) and execute fully by end of September.

3. Get RE License so I can make more money per flip from commissions saved.

4. Buy a rental (third strategy) by the end of Q2 next year from flip profits.

What I would like to do is to keep buying rentals from flip profits - I just need to figure out at what point that is.  Like buy one rental from every 3 flips or something similar.