All Forum Posts by: Dean I.

it depends on your market and what your market demands. If all the comps have metal roofs, then you probably should go with that. If the comps have shingles, then go with that. Don't spend more than you have to unless you know for sure that it will add to the value or sell ability of the home.

The best thing I can suggest is to read everything you can on real estate investing (flipping, wholesaling, renting). By doing so, you will gain the necessary knowledge to find and make deals happen. There are deals that I have heard of that could only be pulled off by people with intimate knowledge of real estate. This knowledge can only be obtained through increasing your knowledge (reading, networking) and experience. So perhaps the reason why you have not landed a deal yet is becuase you have not explored all your options and more than likely that is because you are not educating yourself as much as you should. In two years, unless you have other barriers (like finances), it seems that you should have landed on something by now. 

Like in sales, you want to keep your pipeline full. The more you fill your pipeline, the more deals you will get and the more consistently you will get them. Set up systems in place to keep your sales pipeline full and make time to keep your knowledge pipeline full. 

If you feel that you have no time to read, then consider audible. I make it through 1 to 2 books a week. I have been doing this for over 5 years and if I hadn't, I wouldn't be where I am today in business or real estate investing.

One thing I have learned is that slicking ceilings is an unnecessary expense unless you are flipping high end homes and it is expected. Before committing to an expense like this, you should look at the comps in your area and see if the majority of the ceilings are flat. For those that are, did they sell for any more or did they sell any faster? If there is a mixture, then chances are, I doesn't really matter, but you could always try a few flips without slicking the ceilings and see how it goes. If you are getting lots of feedback stating that the potential buyers don't like the house because of the ceilings, then it may be necessary. The same is true for things like granite counters and the type of cabinets and floors used.

Finally, don't forget that this is not your home. Just because you personally don't like something, it doesn't mean that it will matter to most buyers and it doesn't mean that it is worth spending the money to change it. 

When it comes to flipping houses, the only thing you have to live with is your conscious and your profits.

We have been using BM Grey Tint for our flips. It's a cooler grey (not warm like a greige) with blue undertones (purple/red undertones with certain brand paints). The brand of paint we usually use with it is PPG Wonder Pro Eggshell, which looks great. Don't make the mistake of going with WonderTones though, that will give off a purplish undertone . . . don't know why. Anyways, If you are wanting to go with a cooler grey, you can check out Houzz.com for some examples or you can look at some of my past flips.

https://www.zillow.com/homedetails/104-Shadow-Broo...

https://www.zillow.com/homedetails/502-Maize-Ct-Hu...

I will be trying out SW Agreeable Gray and SW Repose Gray on my next two flips though. I think they might be better for houses that call for a warmer tone, especially if the exterior color is warmer.

@Rod F.

Best and final is used a lot here, with and without competition. The banks love doing this. They hope that people will budge and offer more. When we look at a property, we do the numbers and whatever our offer price comes out to, that is what we submit and stick with. When they call for best and final, we submit the same exact number. The only time we may change it is if we get a counter offer and it isn't far from what we originally offered. We have even had situations were we weren't willing to budge at all. The banks would give us 3 counter offers and we would keep submitting the same exact offer until finally they give in. 

Yeah, I thought it was odd that they called it a construction loan too. I originally asked for a rehab loan, but the banks around here refer to them as construction loans.

Fred, if you can avoid the high interest and points that come with hard money lenders, than I would. When I first started I called and visited as many banks as I could within 4 hours of my location till I found one willing to work with me on my first flip. Totally worth the extra effort.

I do agree with the overall consensus that you need to learn your trade a bit more before you buy any houses or put any houses under contract. Trust me, most wholesale deals I look at are complete crap and It is clear that the wholesaler has no clue what they are doing and even more clear that they have never flipped a house in their life. My suggestion is to read as much as you can and learn as much as you can before you put a house under contract. Look on the MLS and pretend like you are going to buy these house to flip and work out the numbers and see if they work. Learn how to accurately estimate renovation costs and find an agent to do comps for you. These two things are the most common mistakes that wholesalers make. Wholesalers almost always under estimate renovation costs and over estimate the ARV. I personally don't think that anyone has any business wholesaling to house flippers, unless they have learned how to profitably flip houses themselves.

Not trying to be offensive by any means, but I think most house flippers can agree that most wholesalers put the horse before the carriage. 

Again, I can't pull up my reports right now, but annual property taxes is $802. Divide that by 12 months and multiply that by the 4 months I held the property and you get $267. If you really want me to, I can pull up my hud statements and verify, but I think that is a close enough estimate. 

The 4 months holding time includes rehab time, time on market and time under contract.

@Marvin Ong

I went through a couple agents before I settled on the one I have now. This particular agent worked under a broker that is also house flipper. This allowed him to pretty much learn the ins and outs of flipping houses in this area, which means he knew how to analyze a deal and he knew what areas did well and which ones didn't. He also thinks more like a business owner than an employee. All of these attributes is what makes him a great member of my team. He is also a great guy and we get along well.

My suggestion for you is to find an agent who is investor friendly, thinks like a investor or a business owner and is hungry for work. Typically the big wigs wont have time to deal with you. Most agents are used to showing a home buyer 5 or 6 houses and then the buyer picks one. You may have to look at 10, 20 or 30 and put in just as many offers before you get one accepted. They need to know this up front and you should be willing to pay them more for this fact IMO.

Also, I would maybe look on bigger pockets for an agent. If they are on this site, then they are probably investor friend and probably trying to learn beyond their typical job and become an investor themselves. This can make for an invaluable partnership or team member. Also, I personally would stay way from agents that are currently working for other investors. My agent doesn't work for any other investor and my agent has since broken away from the other investor. Even when he was working with the both of us, he did well on looking out for both of our interests, but I don't think most people can make that balance.

@Scott W.

Oh, your right. I can't pull up the reports right now, but I believe it was around $1200 for both builders risk insurance (I think that is what they called it) and flood insurance. But I am also getting a refund check from the insurance company for unused time. As for taxes, I would have paid around $300 for taxes (rounding up) for the time I held the property.

Construction loans in my experience is pretty eas6 and have way more favorable terms than hard money. Construction loans typically cover 75% to 90% of cost, meaning they typically cover 75% to 90% of the purchase of the home and the renovations. You'll typically pay through remaining percentage of the home purchase at closing and then you will be able to get draws from the bank for three renovations as work is complate. You may have to send pictures and invoices to get draws, but that's pretty easy. Some will require an inspection. From the hard money lenders I have spoke to, they pretty mucheap have the same process. The main difference is that hard money will generally close in 10 to 14 days, but charge a lot more in points and interest. Construction loans on the other hand close in 21 to 45 days (depending on the lender) but charges less points and interest. Both lending options are interested only payments for 6 to 12 months.

I do all my flips with construction loans and it's pretty easy. I also know of plenty of other flippers who do the same.

As for your credit and length of time in business, that will be the hard part with a construction loan. First, in order to get a construction loan for the purpose of flipping houses, you will more than likely have to go to the small local banks. Theyou have more of an "appetite" for this kind of loan. But even then, it may be hard to find a bank that will fund your first flip. Many of these Banks want you to have some flips under your belt and even be in business flipping houses for a year or two before they will give you a constructionew loan. Keep looking though, if you have good credit and a good income, you can probably find a local bank (even if it is a couple hours from you) that will fund your first flip. After your first 2 successful flips and or after your first year of flipping, it will be easier getting approved. Also, you will need to do this in an LLC, which is easy enough. You will want to elect it to be tax as an S Corp.

Finally, don't just call the banks. I had a few Banks tell me over the phone that they don't fund flips or do construction loans over the phone (because they don't want to advertise it), but when you go in and speak to a banker, they tell you a different story. For some banks, this is only available for existing customers, do it might be worth opening up some checking accounts and credit lines, in order to meet that requirement.

Hope that helps.