All Forum Posts by: Justin Williams

Thanks for all the comments everyone. It took a lot of thought and is going to take a lot of time to commitment to do this thread and I have to be honest that after reading a couple of the first few comments I was having 2nd thoughts but the additional comments are very encouraging and much appreciated so thank you all! :-)

@Joel Owens Thanks for the comment. Before I address some of your questions I want to be clear here that I am not looking for validation of my business model. I have seen a couple comments that makes me feel like some people think that is the case, so just wanted to make that clear that this is not what the thread was intended for. I think it is obvious everyone is different and I don't think the goal of this forum is to try to be like everyone else. I don't think that would be very helpful to anyone. :-) Of course people are welcome to give their thoughts and I think the collaboration is always good, but in case I gave off that impression I just wanted to be clear that I wasn't really looking for the validation of my business model. Yes you are correct that flipping a high volume of houses is not for everyone. I'm not claiming that it is or should be, but it is what I have found to work for me and I really enjoy it! but thanks for the thoughts.

To answer your question about my team, yes I do have a team. I have my assistant Vanessa who pretty much runs the day to day operations of my house flipping business. She has 2 people who work under her, who handle all of the things like utilities, insurance, paperwork, book keeping/payroll, sending wires, entering listings we do ourselves/taking calls from potential buyers, manage the rentals that we do have (we have about 10), going to the bank as needed, running errands etc So basically 3 people who are a part of my overhead.

Other than that we have 3 general contractors, my main agent, a couple other agents, and several wholesalers we work with. Of course we also have our preferred title/escrow connections, our accountant, insurance person etc.

But as far as my overhead goes it is about 100k a year (not including bonuses but that is based on total profit so wouldn't to up front costs) but I don't look at it like that. I look at it more as $8,500 a month or $25,000 a quarter, so as long as we are making significantly more than that is is very worth the expense. In fact I don't even look at is an expense bc without these people I don't have a business :-)

Flipping houses or any other business for that matter like you said can be a ton of work. When you find something that is lucrative and easy to do please let me know! I'll be the first one in line, but I haven't really found that to be the case...;-)

Having that been said just like any other business, we can do things to make it easier or harder on us. Everyday I working towards streamlining my house flipping business, and so far that has gone pretty well, so like you said regarding energy, although setting up those systems has taken a lot of time, focus, and effort, they have more than paid off and do allow me to spend a lot less time and effort while accomplishing a whole lot more.

I'm sorry flipping houses didn't work out for some of your friends, and considering you are focused on other investment strategies this probably isn't the thread for you but thanks for your comments, and hopefully the feedback is valuable to others who are interested in learning more about running a house flipping business.

@Larry K. completely agree. Thanks for the comment.

@Luis C. You bet. It might be best to explain first how I have financed my deals over the past 7 years. I actually spent the first 3.5 years when I started out in the business wholesaling properties so getting financing wasn't an issue.

Then in 2010 when I started fixing and flipping I started out with working with some private money lenders.

In 2011 when I started doing higher volume I still had some private money lenders, but also connected with a JV (50/50 split) partner who funded most of my flips that year, which led to getting another JV partner who also funded many of my deals.

Then in 2012 I still did some JV splits but started using hard money for the first time.

Today we have quite a few private money lenders, so whenever we get a new house under contract Vanessa (my assistant) will look at the houses we are about to close on and see which private money lender is on that house so she can transfer them to the new house. We also still use a lot of hard money and leverage it with our personal funds or private money to cover the gap of what is not covered by the HM lender.

I do have some bank loans on some rentals I purchased at the beginning of last year, and we are currently looking into getting an LOC which I am pretty excited about.

We have also done about 3 sub to deals this year, and 1 seller carry loan.

I think that about covers it, let me know if I can go into any more specifics on anything I have covered.

@Jerry W. Thanks I really appreciate you saying that. A couple months ago after doing an interview with a fellow colleague on my podcast I had someone leave me a pretty nasty voice mail, and write a rude comment on my blog. It effected me for several days. Since then I realized it is just going to happen from time to time and I could either stop sharing information or I would have to learn not to let it effect me so much. This time it only effected me for a couple hours :-) But I know it was meant well so it's all good. Although my coaching program helps me cover the expenses on and maintain my site, (hopefully someday it will make more than I spend on it :-)) it comes no where near the value I get from the relationships I make from sharing with others.

Thanks @John Moore

Thanks @Manny Cirino I do almost all fix and flips. I am not opposed to wholesaling and that is how I started when I first got going in the business 7 years ago, and I have wholesold a handful of houses in the past couple years and would do that if it made sense but for the most part I am currently doing 100% fix and flips.

@Bill Gulley I appreciate you sharing with me your definition of a deal, which yes of course if you don't end up closing on a house then yes it doesn't matter how many you put under contract. This is simply the way I have chosen in my company to track this goal for this year. It helps motivate my team if we are shooting to put 3 houses under contract each week vs close on 3 houses, bc it is hard for me to say "alright guys we really need to close on 3 houses this week, and if you make that happen then I will give you x" BC if you don't have anything in escrow then it is hard to have that immediate feeling of achievement and reward. Of course like I mentioned if a deal falls through then we do go back and take that from total deals under contract, so all 27 houses have either been closed or are under contract, but as far as properties which we have actually purchased and closed on so far this year is 21.

@George P. Great question. I use 3 General Contractors for all of our projects. 1 of them does about 80% of all of our projects, and is able to manage multiple projects, and the other 2 can usually manage about 1 project at a time. My main agent helps manage the projects he get's as well as a few others we get in his area, and my assistant oversees these projects that we list ourselves, and oversees the other projects as well to the degree needed.

Thanks @Christine Glasner Hope that helps, I'm sure I will be elaborating overtime but feel free to ask any more specific questions you might have.

George, yes I have a blog, and yes I do have a coaching and mastermind program, and am not ashamed of the program I offer. I believe there is a place for good education for the right price. I have been taken advantage of by high end coaching programs including not getting a car I won, so I completely understand the aversion. All good, and I'm not offended if you take your like back, and don't want to follow the thread. No worries ;-)

Oh and I only mentioned not going into details right now bc of how long my post already was not to mention my wife was feeling horrible this morning and needed my help (but we don't need to get into that :-)) I am happy to go into as much detail on any questions anyone has and will be getting into much more detail on future posts, my main goal for this first post was just to try and get up to speed on where I am currently and what I am trying to accomplish, so I can get into more of the details.

So I thought it would be cool to document my goal of buying 150 flip houses this and documenting my progress here for the BP community.

My reason for doing this is to help educate and encourage others, keep myself accountable, get additional ideas and feedback, as well as create additional business relationships that will help me achieve this goal and continue to grow my business, and help everyone in the process. ABUNDANCE at it's best!

I will start out in this post by giving a summary of where I am up to this point, and will give weekly updates on our progress, as we continue to push towards this goal, and I will be happy to answer questions anyone might have along the way.

Rules of Engagement!

1) Purchases are counted when we put them under contract.

2) Anything that falls through is taken away from the overall total.

3) So essentially the goal is to get 150 houses under contract (not including anything that falls through) in 2014

Where We Currently Stand

As of right now on April 9, 2014 in the morning we are at 27 houses. I specify morning because we are VERY close on a package of 4 that I am hoping we can tie up later today. Fingers crossed!

Here is the breakdown of each month so far on when we put those houses under contract, and how we acquired them.

I refer to my "Main Agent" who is just that, he is the agent we have bought most of our houses with in the past 3 years. Agent # 2 is another agent we work with and have purchased some houses with. Then I refer once to listing agent which just means she had the listing and we worked with her in buying the house. Then in regards to wholesalers I just go in order of when we purchased properties and referred to them as #1, #2 etc. Just for the record # order doesn't refer to my favorite wholesaler or those who we are necessarily buying the most from etc. :-)

January-6 total

14th Main Agent

15th Agent # 2

20th Wholesaler # 1

21st Wholesaler # 2

25th Main Agent

30th Main Agent

As you can see in January we had kind of a late start. I was not super excited about the fact that I set a goal to buy 3 houses a week and had 0 for the first 2 weeks! However we got back on track at the end of the month, and were close to reaching our weekly goals.

February-8 total

4th Wholesaler #2

4th Wholesaler #1

4th Wholesaler #1

4th Wholesaler #3

12th Wholesaler #4

26th Listing Agent

26th Wholesaler #1

26th Wholesaler #5

In February we started out strong. I don't think we actually put all 4 of those houses under contract all on the 4th but that is what Vanessa (my assistant) has on the spreadsheet so I'm sure they were around that time and that is when she documented them.

I felt like we were picking up momentum and were getting back on track, and had a good chance of getting caught up and reaching our 150 goal for the year, but then I had a 2 week buying drought, which got me incredibly frustrated!!! After some serious outside the box thinking, implementing new strategies and really rolling up our sleeves we ended the drought and bought 3 houses in one single day, which happened to be the same day I went to Disneyland with my family.

I don't have time to go into all the details here but I wrote a blogged about my frustrations and the details of overcoming them and then buying 3 houses in one day on my site if you want to read the details.

Also worth mentioning in February we bought a lot from wholesalers but my main agent who is one of our primary buying sources and had a goal of 5 for the month struck out! We also fell short on our large Direct Mail campaign we recently launched so once again we were behind on our goal but considering what didn't go the way we planned there was still hope for the goal of 150 if we could get back on track and get everything to come together.

March-7 Total

4th Main Agent

11th Wholesaler #1

13th Wholesaler #6

13th Wholesaler #6

19th Wholesaler #2

20th Main Agent

26th Wholesaler #7 (referred by #6)

I won't go into too much detail in March, but as you can see we fell short once again, with our main agent only getting 2 and our DM campaign just not being quite what we have planned for.

April-6 so far as of this morning April 10th

1st Wholesaler #1

2nd Wholesaler #1

2nd Main Agent

7th Wholesaler #8

7th Main Agent

7th Wholesaler #1

So far in April we are off to a great start with 5 houses under contract in only 10 days and hopefully we end up landing that package of 4 which would really help us begin to catch up and continue to gain some momentum!

Totals

So in total so far out of 3 months and 10 days, (or 14 weeks or 98 days) we have put a total of 27 houses under contract. Which means our average is about 2 a week which would put us on track for 100 for the year. So we are essentially behind by about 15 houses! YIKES! My main goal for now is to try to get to where we are averaging 3 a week and continue to implement new strategies, and build relationships to help us maintain that momentum and help us get caught up.

Summary

As you can see most of the houses we have purchased so far this year have been from relationships we have developed with agents and wholesalers which is actually pretty different from years past, but that is where we are at right now with our home acquisitions. I don't have time to go into more details on each deal or where an how our agents or wholesalers got these deals, but I will try to cover some more details on future posts as well as cover how we finance our deals, manage projects, systematize our business etc.

I know we are behind, and I don't know that we will reach our goal of 150, but we are not giving up! So far April is off to a great start, and we are continuing to build more relationships and implement more strategies to help us reach our goal for the year. At the end of the day as long as I can look back and feel like we did everything we could then I guess I can live with that, but right now I think we still have a decent shot.

I have to admit that it is pretty hard to put myself out there like this. No doubt there will be days/weeks or even months when I fall flat on my face, but having this accountability and support will help keep me going and hopefully everyone else can learn from my failures and successes along the way.

I know there are probably a lot of questions and a lot I didn't cover, but I think this post is already long enough so feel free to ask any questions you have and I will do my best to answer them in this thread.

I'm not sure what the exact outcome will be but I'm looking forward to sharing my journey and experiences with you along the way!

150 houses or BUST!!!

Thanks @Will Barnard likewise. Ok I really have no idea how to write your name so you see I mentioned you lol

Bill, I didn't realize you were so new. You seem like a pro so I'm sure you will be good to go in no time ;-) Like Ellis mentioned GREAT advise so far on this thread. Bill clearly knows WAY more than I do about creative financing. A portfolio of 400 using creative finance?! GEEZO! ;-)

Knowing how new you are to the game I have a feeling if you stick with it you are going to be more than fine!

Sounds like you have had some help and understand deal evaluation so that is first and foremost, you are working with Jerry and are taking action on marketing and your phone is ringing, so you have done more than 99% of people so kudos there as well! Now is your chance to fail! congrats! :-)

I've been doing this for 6.5 years flipped over 300 houses and we still fail everyday!

We have some pretty dialed in systems, a lot of experience and are still probably spending about $1,500 - $2,500 per property we purchase, and that is with all of our experience, and my margins are much tighter than yours. My goal is usually to make about 8-10x's profit of what I spend on marketing which isn't a bad ROI.

I guess the point I want to drive home is I sometimes see new investors get frustrated when they don't see the results they expect from the get go. They have heard of the stories of how it happens and it just sounds so much better and easier when you hear if from someone else then when you actually experience it yourself :-)

Ok so I'm getting a little excited here and kind of carried away (sorry it's been over a hear since I've been on the BP forum :-)) Just like others have said, I would keep making your offers and you will eventually start getting some counters. If you don't then of course follow up but they just may not be quite as motivated as you had thought, but eventually you WILL get an acceptance or counter, then you REALLY have something to work with. If you are even close you can try to see if you can get a rehabber to take it, and or continue your negotiations, and then like Will mentioned try seller financing as an alternative as well.

But even then remember it is a business and a numbers game, and the numbers get better with experience and time. You are just filling your pipeline. Some people who are not ready today might call tomorrow, and as all of these things continue to come together you will eventually get your first one! and personally I believe your 1st is much harder than your next 10 and your next 10 is much harder than the next 100! so just stick with it! Your on the right path!

Ok I guess I should have gotten my pom poms out for this one! lol

Gotcha! Ok makes sense. I'm not the most qualified to help you with details on seller financing, but could you elaborate a little more on your numbers?

How many mailers are you sending out, how much do you have to spend to get a call, out of that what kind of feedback are you getting?

Then how do you determine what your offer will be etc etc.

For us everything is a numbers game. How much money do we have to spend to get a deal, and does the profit from that deal make sense. If it doesn't then we need to reevaluate and adjust accordingly.

Regardless of the situation there are just some people who seem like they are or "should" be motivated but it is still a numbers game and not even all of them will take the price we need to make it work.

I would be interested in hearing some of your current numbers and how you evaluate your deals as well, and some more details on how you are running your DM campaign.

Hey Joe! Great conversation and great feedback from Will (Will great finally meeting you at the I survived event a few weeks ago BTW)

I am not by any means a seller finance expert, so just want to put that out there :-) Like Will mentions there are many other benefits to seller finance than just price so it is important to be able to help him understand those benefits for the deal to make sense.

Having that been said for us personally the way we operate is we only bring up seller financing as an alternative if we can't meet on price and they want more than what we are willing to pay. We have personally found that if they are set on cash and we start trying to explain seller financing they will sometimes avoid working with us all together. We try to take the path of least resistance and if they want cash and a quick closing we don't argue with them or overcomplicate it. But if we come to a stand still then it is always nice to have seller financing as a "well if you want a higher price we could try this route"

Once again I am not a seller finance expert and I'm sure if I were REALLY good at selling the benefits it might be more of a focus with us, so I guess what I am saying is you either have to REALLY know these benefits and how to explain them well or yes you are probably correct it is going to be a tough sale for the most part.

Do you even try offering them cash if that is what they want?...This business can be hard enough to buy a good deal but if you are eliminating possible options (especially the one they want) it will probably be even tougher.

Just my .02 ;-)

Welcome to BP! Great place to network and learn!

I suppose it depends on your intentions. I don't think any of the realtors I work with on a normal basis really knew much about wholesaling before we started working together so I don't really see why that would be a problem.

Is your concern that you are having them tie up properties and then assigning them to someone else?

I think if you have a good agent who can get deals under contract it would be worth explaining to them what it is.

Welcome and you are in the right place! Awesome to get started so young! It seems like I hear so many people think they are either too young or too old to start a business. Just get out there and believe in yourself! And you should feel like an expert just by reading those books and being here on the forum you probably know more than 95% of the people out there ;-)