All Forum Posts by: Malcomb Stapel

 By resources I would be saying capital, contacts, soft skills, credibility, all of the things that help grow your business and start building a positive reputation. 

@David Taylor there is definatly a stigma attached to the activity. I have a theory that I can share which might help you avoid some of the common bad behaviors. Also, this is based on my area and experiences, your mileage may vary. 

A lot of times they are younger and don't have the kind of resources needed to actually take down a deal. This leads to lying/ misleading to make people think they are the real deal. Also, they don't educate the sellers as to what they are actually doing and that they are not the end buyer. They like to bounce each others deals around and the price can vary wildly between wholesalers. The wildly exaggerate ARV's and do significant markups from contract price.

What's a significant markup from contract price? Well, if I'm buying to flip and it's going to cost me 3-5 months of time, effort, holding costs, risk, etc, and I'm only going to make $30k off the final sale then it serves to reason that the wholesaler would make less because they have less skin in the game. That said, 

@Nikovia Smith there are a lot of questions there and I will try to help with some of them. 

How much should you save? - Well, how much are you going to need to put down? Start talking to local lenders and see what kind of products they have for construction/ rehab loans. For instance I have one that requires 15% of purchase price and construction costs. So if I had an all in of $100k on a project, I would bring $15k of that and they take care of the rest. 

Target market for cheap houses? This question kind of misses the mark. You don't want to flip cheap houses so much as you want to buy them cheap in nice areas where you aren't going to have trouble unloading them once the product is finished. For instance, you don't hear a lot of people bragging about flipping crack houses in crack neighborhoods. Though I'm sure someone on here is doing it and making a lot of money.  

DM if you want to chat more. 

@Stuart Udis yes, if they think it provides additional protection/ anonymity during an actual lawsuit, they would be sadly mistaken. We went through the trouble of setting one up last year for an additional layer of anonymity because we sometimes inherit bad tenants that need to be let go. Or in one case, we purchased a commercial property with an active chop shop situation. I didn't want those people showing up at my house when I wasn't around to do something about it. 

Unfortunately, it doesn't really matter because a quick biz search will show me as the manager, and, even though my registered agent address should be the one to show up on county, most of the time they are still putting my home address :(   This might actually be something that is happening at title and I may need to address it there. 

Are you sure that is what he is looking at doing? The original post doesn't seem to elude to that. It's very possible he's just trying to add a little more anonymity. In which case, if he sets up the state LLC correctly, and depending on what documents are available for public viewing, he would be able to pull it off no?

@Deborah Wodell here's one that might be useful to you. Always pad a percentage of your budget for overages. Smaller budgets will need a higher percentage. See below

$20,000 renovation, add 25%. Why? Because your x-ray vision missed the broken sewer line, broken hvac, you thought those hardwood floors under the carpet were better than they really are, etc. Small budgets can get blown up easily by one or two issues that you missed during your walkthrough. 

$100,000 renovation, add 10%. Why? If you are doing your part and really looking at the property and dug in deep on the underwriting, you should be good to go. There is a lot more budget there to absorb a few hits. 

Also, at the end of the day, if you have budget left over, make a draw and enjoy that tax free money. 

 Add an additional two months for the contract to fall through due to buyer trying to negotiate like they are on the cast of Pawn Stars. 

 The first one that comes to mind is property management. You could get in with an established company that is looking for help. This will give you opportunity to see a very important side of the equation and probably get you in the same room with some well established investors that might be willing to help further your career. 

@Alyssa Dinson I'd be happy to chat with you if you want to DM about how we structured our partnership, division of responsibilities, etc. 

@Maria Diaz I can't help you out with the contracts portion, but I will reiterate what @Stuart Udis said, be very careful about providing money up front. If the scenario is the contractor is immediately going to be out for a significant amount of materials on day one, then you could consider it. Or, better yet, have them go to Home Depot and pick everything up, then have the pro desk call you for the charge. This can be a nice compromise where the GC isn't paying for materials out of their pocket and you aren't paying for labor that hasn't happened yet.