All Forum Posts by: Ricardo Rosales

Hello

As of today we have completed more than 60 deals and today we are managing 10-20 deals at the same time (Buy, Rehab, Hold and Rent, Wholesale). It all started when I bought my first real estate flip from a wholesaler in the Houston area in 2008 for only 15K, this was a property that had no comps, was in very bad shape and turned into a complete money pit after we started the rehab. 

My first mistake was selecting the wrong contractor, I went with someone that had been recommended by a friend and we had to fire him in the first two weeks, I had sunk about 5K onto that rehab already and my deal was completely going wrong. 

Long story short, we had 3 different contractors on that property in a period of about 6 months, failed many city inspections and about 50K on the rehab, something that at the time should have cost around 30K.

After finally finishing the rehab we ended up leasing that property for $900 a month and sold it 4 years later for 90K.

We learned a lot during that rehab on what to do and not to do, how to screen better our contractors and have contracts in place.

Financially at the time the deal was a total disaster, but after four years it was a complete slam dunk. Here are the numbers:

PP:15K

Rehab: 50K

Holding cost: 10K

Total Invested: 75K

Rented for 4 years @900 month: $43200

Sold @ 90000

Total Profit $58200

During the time, all I could think was "when is this going to end?" it was a total nightmare, but after a while it all started making sense, I did not have a mentor or knew of any real estate club, I basically decided to take a risk on my own with the little bit of money that I had available and not really knowing what I was getting myself into. 

Today we are blessed to partner with others so they don't have to have the same experiences I did, and do deals together at the same time. 

Do not let adversity take you off the path, seek for help, find a mentor, partner with others and you will eventually succeed in this business.

@Matt Prince welcome to Biggerpockets! congratulations on getting started at age 23, I wish I got started in real estate when I was your age. Wish you the best!!!!!!!

@David Coleman you need to find the properties at 20-50% of ARV and then put the difference in between the 70% and the purchase price into rehab. Ideally you want to be 70% all in on your deals so you can have a 30% profit if you flip it. If you decide to rent it and refi it then your property most likely will be cash flow positive.

@Stephen Seaberry There are TONS of property available in Killeen, Tx at a very low price (20-50K) price range, the only challenge I find on that market is that you have a high rate of turnover for the rentals and properties do not appreciate much in value due to most of the population being in the Army and coming in a out every so often. If you manage to get good tenants on your first try you will cash flow  very high. Don't get stuck on that one property you are trying to buy, there are plenty of more you could get your hands on. Let me know how that goes as that is a market we have been scouting to get into.

@Tim Kaminski find owner financing deals, use the money for some down payment and repairs, then refinance it when your credit is up to speed. Find something real cheap so you can get started and gain some experience. 

Ask the wholesaler for significant money up front to put on escrow with your title company. Usually 2-5K will lock the deal depending on the price of the property.

Steven, If I were you I would offer land value - 30%. If you are in Houston, go to HCAD and look at the assesment value of the lot, deduct 30% due to having to do some demolition on the mobil home and clearing the land and then you will have a deal to move. If you negotiate land value and an experience investor comes across your deal he will try to knock it down in pricing due to having to improve the land and you wont have much a deal in your hands. 

Thanks for reaching out Chris, would love to connect with you as well in the future, we have some rentals near you in the Friendswood and Sagemont area. Would love to catch up for a cup of coffee when I am in the area. Have a geat Day!!!!!!

Hi Kevin, thanks or reaching out, we should definetly get together, I would love to learn what you are doing and see how we could help each other out. 

Thanks Brandon, I appreciate you reaching out, looking forward to connecting with you in the future. I am still trying to figure out the website, lots of gadgets and tools to go thru, I feel like a kid with a new toy.