All Forum Posts by: William Harvey

@Sara Malka check out link in my signature for some helpful articles, including estimating rehab costs. My partner @Dan White has a remodeling background and wrote a very in-depth article on this and how to approach it. We've flipped 14 homes in the last few years in a competitive market, so we are writing from an investor's standpoint.  

Also, I'd highly recommend not using the 70% rule as it is inaccurate and will lead to your offers not being competitive. I'd take the time to learn how to evaluate a potential rehab and you'll be in a way better position than most wholesalers and flippers who use this lazy approach. Best of luck!

Buy right. You absolutely make money when you buy, not when you sell. The way we put this in practice is buy being extremely conservative with our ARV calculation when we analyze the deal. That's vitally important, especially in this current market we are in.

@Scott E. What if a property in a warzone with loud dogs, 8 cars, chainlink fence..... was offered to you for $1? I know it is an extreme example, but the point is that even for the most undesirable properties, they are always a deal at the right price. 

I'd rather get a great deal on a property in a bad area than overpay or get an "okay" deal on a property in a good area. I can tell you from personal experience that (in the case of flipping) I have made more money on the deals in bad areas, busy streets, etc than the ones in good areas. Likely because I've been more intentional about buying for a discount because of all the negative factors. Sellers also are (usually) aware of these issues and would be more likely to discount the price compared to someone with a property in a good area. 

For rentals, I would agree with you that for the sake of your own sanity and not having terrible tenants and problems to deal with all the time, it likely makes more sense to focus on good areas first and then price as a close second. But for flips where you are in and out of a property quickly, I think price is the ultimate thing to focus on above all else. Just my two cents! 

@Christopher Lynch I'd form a new LLC and just draft an operating agreement since you plan to do multiple deals with this partner. You then just file a tax return annually for that LLC and you and your partner will get a K-1 for the income you received. Super straightforward.

@Christopher Lynch Really depends on the hard money since you're going that route. People keep saying HML's require 20-30% down but that isn't always correct. Really depends on how well you buy the deal. On my first flip we got 100% purchase price + renovation draws. I had about $30k at the time and that was plenty as I just had to pay for the reno work with my money, and then the HML reimbursed me with a draw.

I'd figure out the hard money variable first and find one that can do 100% financing plus reno if the LTV/LTC is within their threshold.

I also wouldn't let funding be your limiting factor. As @Eliott Elias mentioned, money partners are out there and are willing to put up cash for things like this. If you miss out on deals because you're trying to "save up" so you can do it yourself, I think that's a very limiting approach. 

Find a good lender, a good equity partner if needed, and most importantly BUY RIGHT! If you do all that, you should be good to go whenever you find a deal. 

@Lisa Yan I agree completely with what @Eliott Elias said. These tactics are great if funds are limited and you are just starting out. Direct mail will cost a little bit of money, but if you do a lot of the work yourself, it is mainly sweat equity. 

If you have a bit of money to spend, I recommend checking out @Parth Bhatia and his company, Lead Plug to source off market deals. They manage our Google Ads campaign and we spent about $20k last year and generated $286k in profit from these leads. 

I wrote an article on it you can get to from my signature if you want more of a case study on that. Best of luck!

Completely agree with @Ryan Normand. $12k seems really high. I'd expect our guys to do it for $5-6k at the most. Possibly less depending on the scope. 

The tankless water heaters are awesome. I have a plumber I work with and I see him installing them on social media all the time for people. He swears by them.

@Christian Walker I agree with @Bob Stevens. I think if you made a pie chart showing the elements to focus on when considering a property, 98% of it would be the price, and the remaining 2% would be everything else.

If you buy a property right, it'll usually lead to a positive outcome no matter what else happens. Best of luck!

 I'm not saying people shouldn't look at different economic indicators or news, it is good to understand what is going on and I read lots of stuff related to the economy. I am saying that there are so many variables at play that no one really knows what will happen in the future, and anyone that predicts it with certainty is foolish. Warren Buffett has said that he treats economic forecasts purely as entertainment. 

If you focus on the underlying fundamentals of a property, and buying right, you don't have to get overly concerned over any good/bad news on the economy. All of that is outside of our control. 

 If house flipping doesn't work out you should get into fortune telling since you are so confident about what will happen in the future!