All Forum Posts by: Ofer Eyal

.. And just now I've stumbled upon this article about the most powerful biz entity for flips, maybe it can help

@Griffin Buell Great to hear you guys are setting off after educating yourselves. Good luck! 

As for your question, I would legal advice on under which entity you should operate and also make all agreements in writing and official. 

Hay @Mohr Ben-Reuven

On top of reading the book suggested here, and if you are a fast learner, here is a system that worked for me when I had to supervise a construction with zero experience. 

Interview 10 contractors.

For the first 5-7 interview - pick those who you are less likely to work with. Ask them all the questions in the world. Learn from them everything: concepts, terminology, jargon. Ask them to take you to projects they are running right now. To show you what they are proud of. And ask them to show you others' projects - and then ask them what are the mistakes done there (it's easier for someone to point out other people mistakes). Write everything down.  

Especially in the beginning don't be afraid to appear ignorant. On the contrary. Say that you don't know much and that you are eager to understand more. 

Write down everything they say.

Very important: from one interview to the next - start using their jargon. So it grows on you and it becomes natural for you to say it. 

In short - make those interviews your school. 

Then, before going further, and armed with all this knowledge you gained - stop interviewing contractors and talk to 2-3 supervisors on the aspects of supervising contractors. Pick their brains. Ask both about what to do and how to manage but also about what pitfalls to avoid. Where are the traps and how can a layman be taken advantage of. 

Finally, when you hit the 8th interview - you will know so much about the subject, be able to use jargon and demonstrate knowledge and control such that it will allow you to both vet the contractor and also leave an impression that you cannot be fooled or taken advantage of. 

This is not an orthodox way, but if you are a fast learner, brave and determined this might get you up to speed in a relatively short and intense time. 

Also check out this movie which is actually embedded in the post above

@Jon Christian David Greene's book on "Long Distance Real Estate Investing" has a great piece about locating and then vetting contractors. Since you probably build locally, you might overlook this book but I highly recommend it for locals as well. 

@Randy Rosenblum

I found this blog post by Brandon Turner to be very helpful as a short read: https://www.biggerpockets.com/...

@Maria Taylor to tag write down @ and immediately the name EXACTLY AS IT APEARS NEAR THE PERSON'S PIC, type the first name, space and then the first letter of the last name. Now wait 1-2 seconds for the website to suggest the tagging and choose it with the mouse. Try tagging me by writing: @Ofer E  <-- wait a few seconds for the tagging suggestion to appear beneath the text and choose it.

@Maria Taylor I completely agree with @Zach Westerfield's "That is personal decision". Living off a loan is expensive and in my mind also dangerous as you bet your livelihood on the success of the project. 

@Valentina Ayala You'll find networking and marketing strategies in great books like "Rental Properties Investing" by Brandon Tucker and "Long Distance Real Estate Investing" by David M Greene. 

@Jim Piety In my opinion and especially at current market conditions, even if you only want to flip you should be considering BRRRR as an exit strategy. So, this goes without saying that if the BRRRR numbers don't work - don't go for a flip. Unless you have another exist strategy that is viable with those numbers.

As for your question, the single major downside of flipping - in my opinion - is that the housing market might start plummeting during the holding (rehab) period. At this time you're mostly exposed. That is why flippers a really keen on getting done with the rehab ASAP.

The second downside is keeping the rehab within budget. 

Those two can directly eat at your profitability.

Other downsides and risks are a prolonged rehab and of course the very hustle of the rehab.