All Forum Posts by: Katlynn Teague

Does this still apply to creative financing? (SubTo, Wraparound, Lease-Option, etc.) Surely there will likely be some form of down payment (whether cash or private money for instance) - but would the financed amount be considered one of the above three, or solely financing on paper?

@Katlynn Teague I agree with @Hampton Logan. I think finding a good/trustworthy mentor that knows your market is a smart play. I was nervous about the unknown, but as I've flipped more and more houses I've realized that there are only so many "moving parts" to a house and even if there are surprises (there always are) it shouldn't tank the deal. We've never done a single home inspection on any house we've flipped. Biggest things to focus on are foundation, septic, well, and those major items. Thinks like plumbing, HVAC, roof, water heater, are not going to kill the deal. Also, everything mentioned there minus plumbing is visible so you can see if they are old and likely need replaced. The only way these would kill the deal is if the deal was super thin. Which leads me to my next point...

Make sure you buy the property right. This is far and away the best advice I can give. The cliche saying "you make money when you buy, not when you sell" is so true. For my first flip, we made every mistake in the book in terms of the renovation and when we listed it for sale; we overimproved the property, made some bad decisions that delayed things, overpriced the home when we listed it, and many other things I'm sure I'm missing. But, we still netted almost $50k because we bought the property right and didn't overpay. 

Being ultra-conservative on the ARV is the most important thing. You can get away with messing up every other number, but if you are conservative on the ARV and buy right it'll almost always cure all other errors. My first flip is a textbook example of this. I'd get a good deal analyzer and start looking at deals to get comfortable with things. Hope this helps and best of luck to you!

Hi @Katlynn Teague, I will take a different approach. You asked what I learned and I have to say the power to live the life you want... in time. Time is the component that many forget. My first rental is about to turn 5 years old and the rent is twice the cost. Having cash-flowing properties is like having an annuity where you only pay for a small % of it. As equity grows, so does your investment and in my case, we put in less than $5k ( VA Loan house hack). Good luck on your journey and please keep us updated! Also, I see that you are an agent. Take a look at @Beth Traverso's playlist on One Rental at a Time for her story. She is a top agent and investor and she is very open as to how she did it. I think it would be a benefit to learn from her if you can. 

That everything is figureoutable. I had concerns that no one will rent my property. After posting it on different platforms, I had 30 applicants in 45 minutes.

I had concerns that one of the appliances will break down and the world would end, well in the first 2 years I had dishwashing machine and a washer breaking down.... and I just bought new ones from tenants CF over the years.

I think real estate investing is pretty simple. We just have a lot of information to look at and that confuses us, because us a human beings we want to make the "right decision" , which is just START and do the mistakes so you learn.

Hi @Katlynn Teague - 

I agree with @William Harvey that “buying right” should be your priority…by doing so it will give you a margin saftey against all your other risk which you can certainly do things to mitigate …but never completely get rid of.

This is your safety net!

My first commercial deal was a BRRRR which involved everything in a flip…except selling it! It was a serious renovation and we went over budget by 20%…6 months later than anticipated and also had hurdles with contractor fraud. With that being said, we still completed the project increasing its value by 400k and now hold a turnkey cash flowing asset.

There are so many things I learned from that deal but here are the top two that may by relevant to your situation..!

#1 - don’t try to do everything yourself…so much of the manual labor I justified doing myself at the beginning and although I saved thousands of dollars…I lost tons of time and more important my energy, focus and peace of mind. Of course do what you can…but don’t just look at the dollar figure when trying to justify leveraging someone else! I lost months of productive work on my other projects because my all of my mental capacity was sucked by this deal! …looking back I would of hired people sooner in the process and could of gained 6 months back in rental income which would of offset the cost to hire out because the project finished sooner….

#2 - Do your research on your contractor….this person will make or break you! You don’t know what you don’t know…..BUT it’s so important you TRUST them! It’s so common sense and this was not my first experience dealing with contractors ….someone who was looking out for it…and I still got burned! You live and you learn

Best of luck on your project…keep the community updated as you progress!

Dont buy an old house.

Dont change the layout.

Get a contractor to walk the property with you.

Know your margins in the area.

Pick a property that's around the median sale price for the area.  Don't go too low or too high.

Make sure you understand the costs involved with the hard money if using that.

Its scary the first time but you can do it!

we are finishing our second flip next week and have our third underway.  For us we were not nervous because we didn’t know we were supposed to be! The experience has been a great learning time and the biggest thing I would say is to budget more money and more time than you are thinking.  Also buying for the right price is very important. We use a method that works backwards from selling price to buying price to help out.  If you are interested I can send you the spreadsheet I came up with.  Good luck and stick to it.

If you are new hire an inspector and contractor to come out and take a look at the property. There is not much the inspector will miss, you should pretty much have a dollar amount for everything that could possibly go wrong. Make sure you add a cushion in your construction rehab.