All Forum Posts by: Paul Meyer

@Rachel Perl if you have to break even to get your money and live another day sell. Its the slow season now. I flip and feel ya but I always sell because my capital is tied up. If you can BRRR it and rent it profitable might go that route if in a good neighbor or try STR they dont care about layout. Learn from this so next property you custom it more. I always tear everything out but buyers still *****. They be bitches you be the boss and move on. Holding costs....dont forget those too.

@Luke Stewart if they will accept weelky payment installs as projects are finished. If they wont get another contractor quick. Its likely they are broke and you are going to get stressed out from drama. Good subs are happy to be paid by check and sign a W9 so you write off 1099 at tax season. Even if you pay daily get a W9!! And communicate well exactly what you want and hear them out. They have experience and sometimes* know better.

@Collin H. Hey thank BP podcasts!! No risk right? Lol. I have been off loading my flips as fast as possible too. I lost money holding a rental from 2005 to 2016. Owned it 12 years and lost money selling it. Appreciation in great areas or up and coming but not all neighborhoods. I hear its not 2008 anymore blah blah blah. The last 3 first time homebuyers i have sold to were b r o k e BROKE no savings 100% financed average jobs. I had to constantly pay all closing costs added to loan to close deal. Fokes times havent changed at all. Its why now REI meetings talk about all the 3.25 assumable mortgages they are going to get. In 2005 I bought my first property with a delivering pizza income BUT I had my $8k to close on my own home. Meow.

@Frederick William first nothing is safe. Just be sure you can manage debt. Right now with a million it would retire you investing in midwest cities. Much more safe then 1 building compared to owning 10.

@Matthew Banks do some flips and pay off all your debt then get into passive income like rentals or notes. It doesn't make sense to pay high interest when making very little income on rentals starting out.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $56,000
Cash invested: $115,000
Sale price: $230,000

Another really ugly house - more on the inside then outside. When I bought it I thought I was just going to have to replace 25% of the total subfloor - well of course I replaced the entire subfloor, plates, girder, all interior walls, all new systems include well and septic. It would have been a scary house for anyone too timid to put in the work. Over 7 months I transformed it into the nicest home on the block, but probably did "too much" and I'm working on doing cheaper remodels from now on.

What made you interested in investing in this type of deal?

Price and availability. Everyone else was to scared to buy. Entire inside floor was caved in. Walls were hanging from ceiling joists. Yeah!

How did you find this deal and how did you negotiate it?

Auction. Not much negotiating.

How did you finance this deal?

Equity loan.

How did you add value to the deal?

Rebuilt entire home with full new custom floor plan adding a 2nd full bath and tripling size of kitchen opening out to back yard giving it more light throughout home. Everything was an upgrade turn-key. Not cheap. All city approved!

What was the outcome?

Took a bit longer than expected thought 4 months ended up being 7 months. Finishes are typically fast but my drywall messed up so it took me another month to refinish it for paint 2x. Rebuilding entire floor/walls really only took a month. Wanted to earn more but I take what I can get and move on to next project.

Lessons learned? Challenges?

Brace skeleton walls MORE. Costly if home shifts. Whoopsie.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Not really.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $56,000
Cash invested: $115,000
Sale price: $230,000

Another really ugly house - more on the inside then outside. When I bought it I thought I was just going to have to replace 25% of the total subfloor - well of course I replaced the entire subfloor, plates, girder, all interior walls, all new systems include well and septic. It would have been a scary house for anyone to timid to put in the work. Over 7 months I transformed it into the nicest home on the block. In this house I basically "over valued" the work so I didn't get $250k only appraised for $230k. I didn't fight it because when I did my own comps I was thinking $200-225k sales price so its fair. Buyer is getting one hundred percent new house. Still cheaper in my opinion then demo and building new. After taxes this nets around a $30k profit which isn't anything to get an ego about but its a money brick to put in the bank. Lets just say I learned to brace the house on the next one that cost me $6k using a house moving company to move house 3 inches back. Now I know who to call.

What made you interested in investing in this type of deal?

Price and availability. Everyone else was to scared to buy. Entire inside floor was caved in. Walls were hanging from ceiling joists. Yeah!

How did you find this deal and how did you negotiate it?

Auction. Not much negotiating.

How did you finance this deal?

Equity loan.

How did you add value to the deal?

Rebuilt entire home with full new custom floor plan adding a 2nd full bath and tripling size of kitchen opening out to back yard giving it more light throughout home. Everything was an upgrade turn-key. Not cheap. All city approved!

What was the outcome?

Took a bit longer than expected thought 4 months ended up being 7 months. Finishes are typically fast but my drywall messed up so it took me another month to refinish it for paint 2x. Rebuilding entire floor/walls really only took a month. Wanted to earn more but I take what I can get and move on to next project.

Lessons learned? Challenges?

Brace skeleton walls MORE. Costly if home shifts. Whoopsie.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Not really.

Hey Nikki

Thanks for your service. I'm a Virginia Beach veteran too. Do you plan to live in the property as primary occupant? I wouldn't say it's slim pickin in this area but the VA loan only goes up to $400k lending so under that number the property is likely going to need some updating. My sister has found good properties in up and coming Oceanview area of Norfolk. Even I like it. I almost*** well I did put in a $125k offer on a 3-plex blocks from beach but it needed at least $150k rehab so I was relieved when they rejected my offer. It sat and I think they ended up taking that much (it was over $200k). Let me give you this advice, real advice, I typically buy THE WORSE properties and I get them pennys, dollars on the sqft, because investors constantly just want easily "light rehab" properties. I challenge you not to fear buying something that will need a lot of work to make it completely brand new and EXACTLY how YOU want it to look. At least that's what I do. It also opens up so many more properties. Sometimes I buy stuff off auction and just flip it for just a few thousand profit and they typically are scary properties but nothing any investor couldn't handle and make money on it and get in on at a better price but always I get the same comments "not interested too much work". Then I just end up renovating it and making money on it anyway. If you do find something that has a good location in hampton roads but it was on fire, flood damage, just hideous, become a visionary and close your eyes and imagine what is possible if you just throw in a low ball offer and use a rehab loan or equity loan to rebuild it into a fancy high renting home.

Areas undervalued people don't talk about but from my experience are HOT HOT HOT. Are Smithfield, Suffolk, all of Isle of Wight. I thought it was hick town until I did two flips theres back to back. You have a $200k house or mobile home right next to a sprawling $2 million dollar house and all the new neighborhoods start at $500k for 1800-2200sqft homes. Suffolk is growing and a lot of new jobs are coming there with the new mega warehouses. Just my two cents if you find something there. Don't fear to dream big.

I know this is really old but I'm trying to find a group to get me in contact with some reputable contractors in Pineville. It seems like a decent city but the homes prices are everywhere. If someone did create a group can you send me the facebook or meetup page?

@Kim Musgrave Other flippers ask me to manage their flips and developments but typically salary is less and work hours are more! My suggestion finding a GC or project manager is someone who wants a job not a lifestyle. They will be more dependent on you hoping worksite to worksite and value the opportunity then likely learn your system, quit, start their own flipping business. Its a beat. 25 homes a year I would suggest getting a lot of wholesalers bringing you deals in your own we buy houses system. It sounds lime you are busy with another business. Is it very financially successful as flips? Im all about being laser focused on one business. If you dont stay on top of 10-25 homes real quick you can lose everything you've built just like that. My goal was to pay off all my debt 160k and fully capitalize myself but honestly a few homes is easy but 25 like you said your margins will shrink. The first thing I learned using hard money my first couple of years was that they make the easiest money and about half of what I took home after the tax man.

Good luck. Ill be on a transatlantic cruise.