All Forum Posts by: Justin Williams

First few years was all short sales. That was how I learned and all I knew. Working with sellers and negotiating with banks personally. Boy has that industry changed since then.

Then I got into REO's and trustee sales and doing rehabs. It'a actually only been about 4 years. Then for the past year or so I've been working with wholesalers and agents. We also do some of our own direct to seller marketing and are starting to do more of that as well.

I buy all through out So Cal.

Great question @Mitchell M.

It took me 7 months from when I went to my first seminar to close on my first deal, and that was with some serious full time hustle! Now I was doing short sales so that is something to take into account as well.

My first 4 years I did around 40-50 deals. (Mostly Wholesales)

At the end of 2010 I decided to give a try at gaining passive financial freedom and get out of the "rat race" through building a rental portfolio. I acquired 12 rental properties between Oct 2010 and Feb 2011 and was completely out of my own capital and my private investors capital, yet the rental income wasn't enough to pay the bills or expenses I had at the time so I decided to sell 4 of the houses that had yet to be rented out. The income I got from those 4 houses was enough to pay for my expenses for a year, and I was able to get some of my capital back and a lot of my private money investors capital back, which allowed me to keep going. My first thought was to get back into buying rentals but I realized unless I changed my game plan (which was completely possible) I would quickly be back in the same situation.

Then I thought about what I had just done and the returns/income made and thought why can't I do this every month? So that is what I really focused on doing, and put 100% of my effort into creating a house flipping business with systems. In that year 2011 I purchased 60 houses (which was more than the previous 4 years combined) then in 2012 we bought 120 and in 2013 we bought 75, and hopefully we can pull off 100+ this year as well.

Hope that helps! It has NOT been easy! There has not been one day where people have ever told me oh buying houses is going to be easy today! In fact I just interviewed Brian Burke last week and he said the same thing and he has been doing RE much longer than I have so it was good to hear that from him as well.

Let me know if you have any more questions.

Ok here is a quick update from the past 2 weeks.

5/4-5/10 ended up being a goose egg but like I mentioned above it didn't feel like a horrible week. In other weeks in the past where I went a week or two without buying anything at times it felt like things were pretty silent and I would sometimes go into somewhat of a panic lol but this week we were close and made progress on other areas but just didn't quite hit the mark!

5/11-5/17 last week we ended up getting 2 more. Here are the details...

3 bdrm, 2 bath, 1,538 sqft, built 1990

154 purchase, $20,000 in repairs and $215,000 ARV. This one was from a wholesaler and came just in time for one of my friends who has been talking to me about doing some private money lending, so this will be a great one for him to get his beak wet. It sounds like he would like to do some more and said his boss would probably be interested as well if it goes well for him. It is really interesting how much of a snowball effect there is in this business. Get educated, do what you say you are going to do, and it will come back to you!

Then the 2nd one came from my agent which is great bc he has been in somewhat of a slump lately! ;-)

Here is the e-mail he sent me. Once again showing the snowball effect since this is from someone who we previously purchased a property from in the past. I love that my agent is getting good at finding creative ways to make these deals work. I have never been too huge on creative financing bc I am more of a systems guy but if this is something your team can understand then it can be really beneficial like in this case!

"We bought the house on Cedar from this same seller and he liked us so I started working on this one a few months ago. Here are the terms

Purchase price - $91,000; seller is carrying a note for $64,000 meaning that you'll be putting down $27,000 at the close of escrow; the $64,000 note has interest only payments at 8.5% which is $453.33 a month; per the sellers request we're doing only a 6 month note so the payment of $64K will be due by approximately November 1st Rehab - $14,000 ARV - $137,000"

Ok that is it for the past couple weeks! That puts us at 37 for the year with 113 left to go to reach our goal! Yikes! I better get some more marketing out there! ;-)

Thanks Mitchell! Just when I thought no one cared ;-)

Actually last week was kind of interesting. We did put one under contract and were very close on 2 others but the one we put under contract fell out like the next day and then one of our wholesalers had a verbal commitment on another one but then the seller got a higher offer and backed out, and we were very close on another one which we could have taken but it was just a little tighter than I was willing to go. Although I do want to buy a lot of houses the only thing worse than not buying houses is buying houses where you might not make money ;-)

Anyway normally I would have been frusterated but it was a different week. There have been times where I go a week or two without buying anything and it is like crickets but last week was busy, with a lot of action but just didn't end up with anything concrete.

I'll give a more detailed update on the past 2 weeks this Monday. Sorry for the late update. It's been a very busy week, but thanks for keeping me on my toes! ;-)

@Mark Whittlesey Great question Mark, My wife has her license, and that is what we use, but my assistants do most of the leg work in getting the pics uploaded, taking calls, negotiating, paperwork etc. etc. so she doesn't really spend much time on it.

In the past we actually listed very few houses ourselves but recently we have been getting more deals from wholesalers vs agents so we have been listing them ourselves since we usually will give the agent back the listing, and it helps us save on overall expenses.

Hope that answers your questions. Thanks for the comment!

I hear you @Bob Bailey ! When first getting stated I use to try to convince everyone they should get into the business as well, but have realized over time it is NOT for everyone! lol I definitely have the curse of the entrepreneur and really enjoy what I do. I was just talking to a good friend this weekend who said if he could be done now, he would have no problem with that. He would love to just spend his days relaxing etc. I honestly don't know what that feeling feels like. Don't get me wrong I do like to relax and spend time with family, go on trips etc etc. but I just got some kind of sick disease that I always have to be trying to do more lol Anyway kind of funny how we are al wired differently!

Fortunately after years of working REALLY hard I have some pretty good systems that have allowed me a lot of flexibility and to not have to put much time into the day to day dealings of my flipping business, but then of course I decide to go and start another business teaching people what I do since I had some "free time" so much for free time! lol

Thanks for the comment!

4/27-5/3 Report

This will be a quick report. Last week we didn't have anything until Saturday. I knew we might have one coming but we didn't finalize it until Saturday, so once again just barley made is without a strike out :-)

So like I mentioned before I am still off pace, and getting 1-2 a week doesn't help, however we are working on the infrastructure that should help us. My new acquisitions manager has been learning a ton (anytime you first hire someone it first takes more time in training and opportunity cost but if they work out it can more than pay you back) and we are hoping to see the fruits of those labors in the months to come.

Things have been slow from getting deals from agents. Hopefully this is not a new trend and just a lowell but only time will tell.

So here are the #'s for the deal we put under contract this week.

Purchase price $160,000

Repairs $35,000-$40,000

Total hard costs (including buying and other holding costs except for financing) about $ 200,000. ( I was going to write $198-202 but the avg is 200 and it makes #'s easy :-))

Resale costs will be around 5% since we are listing it ourself (soft cost) $12,000

Resale $240,000

Projected profit before including money costs

$240,000-$212,000=$28,000

One time return on total capital invested 14%

Annualized projected return 42% (assuming 4 month turn around time)

So we can go one of several ways here...

Use our own capital and make 28k and a 14% one time return on our money what a 42% annualized.

Use Hard Money and pay around 2 points and 12% on the capital thus paying about 6% on 85% of the purchase price. (85% of purchase price is $136,000, so 6% of that would be $8,160) which means out total profit would be right around $20,000 and we would have $64,000 of our own capital in the deal thus making 31% on our invested capital or 93% annualized.

Use Private Money at 12% annualized or 4% one time and make a projected $20,000 and make an pretty much infinite return on our own invested capital invested.

Do a 50/50 JV deal and give up 14k of the deal (and make 14k) but get an infinite return on our capital and have no capital risk in the deal.

We will most likely do one of the first 2 options basically if we have the private money available we will use that if not we will go with the Hard Money.

Ok that is a little longer (and more detailed) than I anticipated and hopefully I didn't mess up any of the math :-) But I thought the extra details on some of the options would be helpful for some to learn from.

Ok so since we only got one last week that puts us at 35 with 115 to go! Yikes better get back to work! Maybe I will just start counting the ones we have from now on and not the ones we have left! :-)

Have a great week everyone!

@Christian Lautenschleger So true!

Spot on @Christian Lautenschleger ! Soo many people quit after getting through the hardest part! Learning how to make money, and creating the machine to help you get there is MUCH harder than duplicating that success. Once you can do it a few times you can create the systems to do it again and again, and then all you have to do is maintain and "move with the cheese" as you continue to grow.

"Nail it then Scale it!

Keep it up! You have the right mind set which is 99% of the game. I can tell you are going to be a HUGE success!