All Forum Posts by: Ryan Lockstein

Quote from @William Harvey:

Our plan has been to continue buying, but be EXTREMELY focused on what we estimate the ARV to be (when talking about flips). Seems like we are "catching a falling sword" where no one really knows when values will stabilize, so we are very cautious on what we estimate the ARV to be. If recent comps show it is $325k, we will likely add a buffer and use $300k or even less. We are extra cautious on rural properties and condos, and likely won't get involved with any of those types for the foreseeable future.

ARV is the biggest variable that can mess up a deal in my opinion, so logically, I think the most emphasis should be placed on that as well to make sure there is a buffer for the changing market. In early July we had someone reach out about purchasing their property....long story short we offered $425k and they decided to put on the market because they didn't like that offer price. After not getting results from the market, they got back in touch earlier this month and we ended up offering $375k due to the Fed continuing to increase rates and just seeing the market continue to worsen from when we first spoke to them. We ended up purchasing the property on the second offer.

While we are super cautious and careful due to the current market conditions, we are also breathing a sigh of relief since we are not competing with a million other buyers on each deal. Seems like the pendulum has swung back to the buyer side of the aisle for the foreseeable future and we are going to certainly take advantage of that!

I agree.  We are doing the same.  Still buying but being very cautious on our ARV estimates.  I am trying to use a 10% reduction in current value on all offers.  We are full time flippers so not buying at all is almost as bad as losing money on a deal or two when you consider the big picture (laying off team members, having no income).  We have found that there are still a lot of buyers in our market but they are buying at lower prices due to the higher rates.  If we can just put out the product they want at the price they want we should be good to go.  Our deal volume will definitely take a hit do to our lower offer prices but hopefully not enough to take us out of the game.   

Quote from @Kris Marmol:

Hello BP community. I’m looking for anyone currently active in the eastern Pennsylvania market from Philadelphia and up. I would love to hear your insight and perspective on the market. If you also have any recommendations on good realtors, property managers, local credit unions, and/or contractors, let’s connect.

Happy to help if I can.  

Quote from @Lisa Chen:

@Ryan Lockstein you are right, both could be my intentions. maybe the second one is a bit more attractive if that's doable. what you think?

I'm confused on what you are trying to accomplish here?  You want to refer two leads to a wholesaler and then get a cut of the assignment fee?  Or you want the wholesaler to contact the seller for you, get the property under agreement, and assign it back to you for you to buy?

If your intention is to buy it there is no reason to pay a wholesaler to contact the sellers.  Just go stick a note on their door or skip trace their phone number.  Will save you big $$ not having to pay an assignment fee for leads you already found yourself. 

I'm confused on what you are trying to accomplish here?  You want to refer two leads to a wholesaler and then get a cut of the assignment fee?  Or you want the wholesaler to contact the seller for you, get the property under agreement, and assign it back to you for you to buy?

Quote from @Josh H.:

Hi Kevin,

Like Ryan, I am a flipper as well. We have very done well over the last couple of years and have 11 flips currently in process or reno - and want to start BRRRR'ing for that exact reason - to build long term wealth. The problem is when flipping is your income source, how can we justify making $200/month, when flipping offers a 250x return on capital over the short term? $50,000/$200/month = 250 months to gain that income, just over 10 YEARS, vs immediate. I know the taxes are higher - but when your income is from flipping, deferring the income for the next 10 years is hard to justify.

I feel like I am missing something, please let me know if I am - as I want to build long term wealth.

Thanks,

Josh

Well said Josh   This is exactly my issue with the flipping business.  It’s so hard to turn down $45k+ now for $200 /month cash flow when you need the money to pay your living expenses.  We are working on a mix that makes sense   

How are you guys doing on turning your inventory right now? I have 13 active listing at the moment Typically I have about half that. Are you slowing down your buying volume or just trucking along business as usual and trying to follow the new ARV comps as they decline?

We have been flipping (rehabbing) heavily for the past few years (40 per year).  Recently I am stacked with a lot of inventory.   I know the market is shifting and I should expect longer days on market but I’m having a hard time deciding where to go from here…….   Do I keep buying so that I can try and maintain an income or do I shut off the tap completely so I don’t “lose” money on deals.  Another option is that I buy much cheaper but I imagine that means way less volume.  What are all of my flippers out there doing to navigate this change?  Any advice from the pros is greatly appreciated.  

Hi Scott, 

I have done like a dozen evictions in Philadelphia but never in Mont Co.  Mont Co process seems way easier and more efficient.  Court date in 7 days is awesome.  Thanks for the update and all this info.  Makes me want to start buying holds in the burbs.  

To answer your question about where to find good deals.......

In my experience the following 3 strategies work well but all require a big commitment to consistency.   Mailers (postcards), texting, cold calling property owners.  

If you are trying to find a good/great deal without doing the hard leg work to obtain it or spend the money it takes to get the data, I would suggest getting on many wholesaler's email lists.  They will send out 20 bad deals for everyone 1 good deal but if you are consistent at looking at them you will find one with no marketing expense and no team to filter through leads the hard way.   For me, this has worked many times.  

This is a good question.  I do not list properties that come through my off-market marketing funnel.  I have a conflict of interest though (partners).  I also don't really enjoy being an agent (for clients) and mostly only have my license to save money listing my own rehabs when they are finished.  In your case though, I would say if the deal is dead due to the fact that your offer price is too low and you think the price they need is possible with a retail buyer you should definitely segue into your listing agent pitch.   Why not?

I have recently done plenty of deals where lender covers 100% of everything (purchase, rehab, closing costs).  However I had a good amount of experience behind me flipping before I was able to get these terms.  It doesn't specify your experience in your initial question but if you are new, I would say it is going to be very tough to find those those terms.  If you are experienced, it is very possible.