All Forum Posts by: William B.

It's not just you, inventory is running low. I've put more effort into direct marketing to source more deals myself. I'm over wholesalers sending me 85% deals. 

Over the past few months, usually after I posted before/after photos of recent flips, I've gotten calls and texts from family and friends asking if I had any projects coming up that they can invest in. My usual answer is something along the lines of "if something pops up, I'll let you know" since I wasn't really open to investing with people close to me before now. Everyone who has shown interest completely trusts me and wants to basically “hand” me their money and get it back with interest after I sell. Once this COVID-19 thing passes, whenever that may be, I’m sure my business would be able to scale more quickly and recover from lost income with an influx of cash from family and friends.

(I'd never take money without some sort of written agreement attached to it, so I planned to draw up promissory notes)

I need some suggestions:

•  Has anyone had a contract drawn up for friends and family who have invested in their business? If so, how was it structured? What are your thoughts about just using a promissory note? I’m willing to have an attorney draw something up for continued use if necessary.
• What should I send the people interested in investing with me? I want to email some sort of packet that will explain my strategy for flips and a case study on my last property. I think Brandon said BP has a report that is generated after using one of the calculators that he sends off to investors. I haven’t been able to actually see one yet.
• What terms did you offer? Since this is my first time being open to accepting funding from others, I’m not 100% sure what the best deal structure is. I’m wanting to offer a flat 12-15% return on investment within six months (ex. they give me $20k and get $22,400-$23,000 back within 6 months).
• Did you reach out to investors only once you had a project under contract, or did you stockpile cash to have on hand so you could jump on deals when they popped up?

Any thoughts on this would be helpful. I’m using my self-quarantine time to work on a packet to send out to everyone after all of this is over.

Thank you!

"Change your attitude and get confident" is far from actual actionable advice. Your comment added nothing to this thread. Thank you to the commenters who have given substantive responses to my post instead of vague criticisms. 

Thank you! That's definitely a good idea. The liability and headache that comes with being a GC for other people isn't something I can handle right now though. I'm hoping to find a way to step out of that side of the deal asap. I appreciate your response. 

Exactly! I'm definitely not interested in being a GC, which is why I want to break this cycle as soon as possible. Judging by your response, I'm assuming that you've had success investing outside of your market. Would you happen to have any tips on beginning that process? I'm originally from Detroit so of course I've looked into deals back home, but the market is a lot slower than Houston's. I can have a deal listed and under contract in a week here. In Detroit, a property outside of downtown can sit for months. Stepping into a market like Detroit or Birmingham where homes are "cheap" is very appealing though.

I agree! I'll focus on building out my systems while I wait to close on this project.

Yes,and it's definitely a strategy I would like to employ once I have more capital. At this point, I'm worried that I may get stuck in limbo with a property if I'm not able to find a lender with favorable refinance rates. I can't afford to tie up equity right now. Not to mention lenders that I've researched are only refinancing at 70%-80%. I see that you're in the Houston market as well. Have you been able to find deals with enough margin to use this strategy successfully? Some flippers I know here are buying deals at 80% to keep money coming in!

Hello All,

The Good News:

Over the past six weeks, I've spent 12+ hours a day for six/seven days a week to get another flip from start to finish. We hit the market in Houston last Friday and as of a few days ago, we are under contract.

About Me:

I have been in commercial property management for most of my RE career (I did a quick stint as a Realtor when I first fell in love with RE), but stepped into REI full-time in July of last year after my company's portfolio sale. Being an experienced property manager with a brother in construction who I can turn to for advice, I am able to GC the projects (as needed) and I'm completing repairs myself to save money wherever possible.

My dilemma:

While the seeing the physical transformations of our projects has been extremely gratifying, the process as a whole has been exhausting. I'm willing to do what it takes to not have to go back to corporate life, but I can't imagine being able to carry on with only being able to make money one flip at a time. Not only is it physically demanding, I'm not really able to save money to roll into future projects since this is my only source of income and bills/life eat into profits between closings. Because of that, I feel like I'm creating a pattern that I won't be able to crawl out of.

So, I need advice from the BP pros on how to grow/structure my business this year to be able to take on multiple projects at a time. That's the only way I'll be able to replace the steady income I lost from my 9-5 and grow my business to where I need it to be. I've been entertaining switching my focus to wholesale deals for the next few months to pad my bank account for more flips/buy & holds by 3Q 2020. I could also, of course, just take the profit from this flip and roll it into another deal.

With the goal of graduating to multiple projects at a time in mind, how would you guys go about investing the ~$25k I'll have to reinvest? How did you guys get over the one flip at a time hump and begin to make "real" money? Is really it as simple as getting more capital?

*I understand that it isn't a lot of capital, but again, I'm trying to stay out of corporate life and build a solid future for my family. This is all of the "make it happen" money I can risk without my business effecting my family. With a HML, I'll able to leverage that $25k to get into another project*

Thanks for your advice!

Hello All,

The Good News:

Over the past six weeks, I've spent 12+ hours a day for six/seven days a week to get another flip from start to finish. We hit the market in Houston last Friday and as of a few days ago, we are under contract.

About Me:

I have been in commercial property management for most of my RE career (I did a quick stint as a Realtor when I first fell in love with RE), but stepped into REI full-time in July of last year after my company's portfolio sale. Being an experienced property manager with a brother in construction who I can turn to for advice, I am able to GC the projects (as needed) and I'm completing repairs myself to save money wherever possible.

My dilemma:

While the seeing the physical transformations of our projects has been extremely gratifying, the process as a whole has been exhausting. I'm willing to do what it takes to not have to go back to corporate life, but I can't imagine being able to carry on with only being able to make money one flip at a time. Not only is it physically demanding, I'm not really able to save money to roll into future projects since this is my only source of income and bills/life eat into profits between closings. Because of that, I feel like I'm creating a pattern that I won't be able to crawl out of.

So, I need advice from the BP pros on how to grow/structure my business this year to be able to take on multiple projects at a time. That's the only way I'll be able to replace the steady income I lost from my 9-5 and grow my business to where I need it to be. I've been entertaining switching my focus to wholesale deals for the next few months to pad my bank account for more flips/buy & holds by 3Q 2020. I could also, of course, just take the profit from this flip and roll it into another deal.

With the goal of graduating to multiple projects at a time in mind, how would you guys go about investing the ~$25k I'll have to reinvest? How did you guys get over the one flip at a time hump and begin to make "real" money? Is really it as simple as getting more capital?

*I understand that it isn't a lot of capital, but again, I'm trying to stay out of corporate life and build a solid future for my family. This is all of the "make it happen" money I can risk without my business effecting my family. With a HML, I'll able to leverage that $25k to get into another project*

Thanks for your advice!

Hello All,

The Good News:

Over the past six weeks, I've spent 12+ hours a day for six/seven days a week to get another flip from start to finish. We hit the market in Houston last Friday and as of a few days ago, we are under contract.

About Me:

I have been in commercial property management for most of my RE career (I did a quick stint as a Realtor when I first fell in love with RE), but stepped into REI full-time in July of last year after my company's portfolio sale. Being an experienced property manager with a brother in construction who I can turn to for advice, I am able to GC the projects (as needed) and I'm completing repairs myself to save money wherever possible.

My dilemma: 

While the seeing the physical transformations of our projects has been extremely gratifying, the process as a whole has been exhausting. I'm willing to do what it takes to not have to go back to corporate life, but I can't imagine being able to carry on with only being able to make money one flip at a time. Not only is it physically demanding, I'm not really able to save money to roll into future projects since this is my only source of income and bills/life eat into profits between closings. Because of that, I feel like I'm creating a pattern that I won't be able to crawl out of.

So, I need advice from the BP pros on how to grow/structure my business this year to be able to take on multiple projects at a time. That's the only way I'll be able to replace the steady income I lost from my 9-5 and grow my business to where I need it to be. I've been entertaining switching my focus to wholesale deals for the next few months to pad my bank account for more flips/buy & holds by 3Q 2020. I could also, of course, just take the profit from this flip and roll it into another deal. 

With the goal of graduating to multiple projects at a time in mind, how would you guys go about investing the ~$25k I'll have to reinvest? How did you guys get over the one flip at a time hump and begin to make "real" money? Is really it as simple as getting more capital?

*I understand that it isn't a lot of capital, but again, I'm trying to stay out of corporate life and build a solid future for my family. This is all of the "make it happen" money I can risk without my business effecting my family. With a HML, I'll able to leverage that $25k to get into another project*

Thanks for your advice!