All Forum Posts by: Marty Boardman

Is your contractor asking for an equity position in the deal? If not then why offer? As @Taylor L. and @Charles Carillo have wisely pointed out, this isn't a good idea.

Whenever I have a contractor suggest this I always ask them, "if we lose money on the deal are you prepared to contribute to your share of the loss?" In other words, if I give you a 20% equity position in the deal and we lose 10K can you write our company a check for $2,000? This immediately ends the discussion :)

To keep my project managers motivated I pay $500 if they finish a project early, and another $500 bonus if they finish on budget.

Good luck David!

As @Scott E. explains so well, there will always be adversity. Whether it's a shifting market or a contractor that doesn't show up on time to the house. 

I guess I don't have a "strategy". It's more like a mindset. I tell my team all the time "I don't care about the backstory, just solve the problem and then move forward."

Here's how I like to think about it...

There's no such thing as emergency real estate. Unless one of my houses burns down or someone dies, don't bother me on the weekend. It can wait until Monday.

Quote from @Jake Warren:

Quote from @Marty Boardman:

Quote from @Jake Warren:

Quote from @Marty Boardman:

What are your financial goals Jake? You mentioned you own a LTR and STR. Are you looking to acquire more rentals for cash flow?

Owning rentals and fixing and flipping are two very different businesses. LTRs/STRs produce cash flow. Flipping houses produces cash "chunks". 

What do you need more? A steady monthly income or a lump sum every 4-6 months when you flip a house

@Marty Boardman 

yes I am looking for rentals to acquire cash flow.

I want to have a steady monthly income as cash flow. I am focused on LTR not flips.

Got it. You mentioned flip in your post so I thought you were deciding between rentals/flips.

I agree with Scott E 100%. Do exactly what he recommended.

I live in AZ and own rentals in southeastern Wisconsin. I picked this area because there's high-tech manufacturing jobs and low median prices. I built a great team there and it's a non-stop flight away from Phoenix.

@Marty Boardman

very good thinking with having a flight out ASAP if you need one. I would like to try a OOS deal as I would think I could make more cash flow then in a deal local to me as prices are very high. I am thinking property in Florida what do you guys think?

As a general rule sand states (California, Arizona, Nevada, Texas and Florida) seem to make better markets to buy in for appreciation. For cash flow I think many investors consider the midwest (Indianapolis, Kansas City, St. Louis, Oklahoma City, Cleveland, Columbus, Milwaukee). But of course if you buy right you can cash flow anywhere.

Quote from @Jake Warren:

Quote from @Marty Boardman:

What are your financial goals Jake? You mentioned you own a LTR and STR. Are you looking to acquire more rentals for cash flow?

Owning rentals and fixing and flipping are two very different businesses. LTRs/STRs produce cash flow. Flipping houses produces cash "chunks". 

What do you need more? A steady monthly income or a lump sum every 4-6 months when you flip a house

@Marty Boardman 

yes I am looking for rentals to acquire cash flow.

I want to have a steady monthly income as cash flow. I am focused on LTR not flips.

Got it. You mentioned flip in your post so I thought you were deciding between rentals/flips.

I agree with Scott E 100%. Do exactly what he recommended.

I live in AZ and own rentals in southeastern Wisconsin. I picked this area because there's high-tech manufacturing jobs and low median prices. I built a great team there and it's a non-stop flight away from Phoenix.

As a Realtor, you need to be careful about hiring people to prospect for you. Not sure about state law in FL, but here in AZ paying someone to negotiate a real estate deal with a homeowner on your behalf is a big no-no.

There are a couple of workarounds you can use to do this without getting into trouble (and worrying about 1099 employees):

1. Start an LLC with the door knock partner and give them a small equity/profit agreement - then do all your door knock deals in this LLC

2. Have your door knocker start an LLC and after they make a deal with a seller (and get them to sign the contract) they can assign it to you (or your LLC)

Good luck Steven!

What are your financial goals Jake? You mentioned you own a LTR and STR. Are you looking to acquire more rentals for cash flow?

Owning rentals and fixing and flipping are two very different businesses. LTRs/STRs produce cash flow. Flipping houses produces cash "chunks". 

What do you need more? A steady monthly income or a lump sum every 4-6 months when you flip a house?

Maybe I missed this Fernando but who are these sellers? Are these people who have listed their houses on the MLS?

Because if you're writing offers on houses listed on the MLS you're going to have a really hard time getting anyone to accept them, especially if your intent is to fix and flip. We're in a massive transition right now from seller's market to buyer's market. A lot of sellers (and their Realtors) still don't get the market is correcting and that prices are trending downward. Nor do they understand that buyers can be a lot more discerning and won't write a solid offer on a house that needs major cosmetic updating.

You mentioned off-market deals and that's where I suggest you spend your time. Build relationships with wholesalers and consider sourcing your own deals. Target truly motivated sellers (i.e. pre-foreclosures). There are lenders that will fund if you decide to buy at the auction. Start attending them and do some networking. You may meet someone that can help you with this.

Good luck!

"Never half *** two things. Whole *** one thing." - Ron Swanson

Who is Ron Swanson? He's a fictional character on NBC's Parks and Rec. My daughters love this show and rewatch it constantly.

Ron is a very wise man and this is great advice. Your highest and best use of time is finding more deals to fix and flip. Leave the project management/GC work to someone else. You've got a business to run.

Quote from @Guy Gimenez:

@Marty Boardman

I think it's safe to say that coaching / playing football hasn't been affected by court cases and legislation like real estate has. Personally,  I don't want to receive coaching from someone who hasn't bought or sold real estate in 10 years even if that coach will give me 100% of their time and all their knowledge from a decade ago. I don't want a doctor who hasn't performed a surgery in 10 years directing another physician who is doing my surgery. I want a coach who is actively engaged in the industry and who is current on legal strategies that will impact my decisions.

Yes it's shame there are so many scammers out there taking advantage of people. There are probably a fair share of them and I think that is who Fernando is referring to on the internet/Instagram.

For what it's worth, I've hired 2 coaches over the last 4 years and neither of them had any real estate experience and knew very little about our industry. One of them is an expert at sales/marketing and provided me with excellent instruction on lead generation and negotiating with sellers. The other coach was a retired business owner that has been out of the game for 20 years. What I learned from him about raising capital and structuring deals helped me scale my business and expand to another market.

If my only criteria for choosing them was...I need to see your last 5 HUDs over the last 2 months...I would have never hired them to help me and I might still be stuck trying to figure it all out on my own.

Quote from @Michael Kinsella:

10% is a reasonable rule of thumb for many.

I think what @Marty Boardman said was intelligent, i.e. asking a prospective private lender, "What kind of return were you hoping to get?" That makes a lot of sense to me, as private lenders are going to vary in what return they're comfortable with.

Thanks Michael! When I ask this question I almost always get an answer that is lower than what I was willing to pay the private investor/lender. I think it's because most of them don't want to appear to be too greedy or unrealistic.