All Forum Posts by: Zachary Yelder

Investment Info:

Single-family residence fix & flip investment in Phoenix.

Purchase price: $333,200
Cash invested: $129,000
Sale price: $565,000

This was a flip right in my wheel house in downtown Phoenix, Coronado Historic District. It took nearly 6 months to renovate and sell. We ended taking this one over from a previous investor who was foreclosed on.

What made you interested in investing in this type of deal?

The spread on this one was great! We acquired it so low in a neighborhood that was hot! Biggest factor for me is that I live close by so I can pop in there every day to check progress and I specialize in downtown as an agent. I knew the buyer for this home and how to maximize the dollar. It was easy to come up with a design and lay out to get it sold for top dollar.

How did you find this deal and how did you negotiate it?

This deal came to me from a lender I've known through the years. He knows I live downtown and I was actively looking for a flip in downtown Phoenix.

How did you finance this deal?

The same lender that foreclosed allowed us to carry on the house until we sold it. We payed the 20% down and carried the note.

How did you add value to the deal?

Ultimately different sells in the downtown Phoenix market. I wanted the high end buyer so I went high end finishes. From the Grohe plumbing fixtures, designer pulls & knobs, high end countertops, lifetime warranties on fixtures and appliances. Just going for the details and top dollar finishes that $500k + buyers look for and a design that you don't see in Phoenix. The other is curb appeal. The front yard and giant porch got us a ton of calls when the sign went up.

What was the outcome?

It took 5 months to renovate the entire project and ended up selling it before I could put it live on the MLS. I was pre-marketing it with my sign in the yard and our e-mail list with our firm and an agent I knew came with the buyer.

Lessons learned? Challenges?

Biggest lesson is, if you can, rip out the previous investors work. The contractors from before ended poorly installing plumbing, electrical and floors and we ended up paying for that through the renovation. Had we just ripped it out in the beginning, as we did with certain parts like the kitchen and bottom bathroom, it would have saved us time and money. Our original budget was $90k and we ended up at $129k due to those mistakes. Second mistake, fire your contractor if he keeps making mistakes.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, Andrew at Boomerang financial was great and Mark & Thomas at D.O. Capital Group were easy lenders. Jennifer Bayless at Lawyer's Title is the best title rep I've ever had and I've done hundreds of transactions in our beautiful state. She does all my title work for my investments and my clients.

Investment Info:

Single-family residence fix & flip investment in Phoenix.

Purchase price: $333,200
Cash invested: $129,000
Sale price: $565,000

This was a flip right in my wheel house in downtown Phoenix, Coronado Historic District. It took nearly 6 months to renovate and sell. We ended taking this one over from a previous investor who was foreclosed on. Notes for the future, rip out the previous investors work, saves for time and headache later. Miraculously, it sold before it hit the market and we got it closed in 30 days. Perks of being on the #1 realty team in AZ, our marketing is incredible! My toughest flip to date as I had every bit of trouble with contractors, structural issues, the city, buyers agent and inspections but it got done! Thank GOD! I'll always remember this one!

What made you interested in investing in this type of deal?

The spread on this one was great! We acquired it so low in a neighborhood that was hot! Biggest factor for me is that I live close by so I can pop in there every day to check progress and I specialize in downtown as an agent. I knew the buyer for this home and how to maximize the dollar. It was easy to come up with a design and lay out to get it sold for top dollar.

How did you find this deal and how did you negotiate it?

This deal came to me from a lender I've known through the years. He knows I live downtown and I was actively looking for a flip in downtown Phoenix.

How did you finance this deal?

The same lender that foreclosed allowed us to carry on the house until we sold it. We payed the 20% down and carried the note.

How did you add value to the deal?

Ultimately different sells in the downtown Phoenix market. I wanted the high end buyer so I went high end finishes. From the Grohe plumbing fixtures, designer pulls & knobs, high end countertops, lifetime warranties on fixtures and appliances. Just going for the details and top dollar finishes that $500k + buyers look for and a design that you don't see in Phoenix. The other is curb appeal. The front yard and giant porch got us a ton of calls when the sign went up.

What was the outcome?

It took 5 months to renovate the entire project and ended up selling it before I could put it live on the MLS. I was pre-marketing it with my sign in the yard and our e-mail list with our firm and an agent I knew came with the buyer.

Lessons learned? Challenges?

Biggest lesson is, if you can, rip out the previous investors work. The contractors from before ended poorly installing plumbing, electrical and floors and we ended up paying for that through the renovation. Had we just ripped it out in the beginning, as we did with certain parts like the kitchen and bottom bathroom, it would have saved us time and money. Our original budget was $90k and we ended up at $129k due to those mistakes. Second mistake, fire your contractor if he keeps making mistakes.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

Yes, Andrew at Boomerang financial was great and Mark & Thomas at D.O. Capital Group were easy lenders. Jennifer Bayless at Lawyer's Title is the best title rep I've ever had and I've done hundreds of transactions in our beautiful state. She does all my title work for my investments and my clients.

@George P. Thank you sir. I sent a connection.

Happy Saturday everyone! This is really for all my Michiganders and out-of-state investors that would like to contribute. For the last 3 years I've been investing in my home state, Michigan. For much of it I travel back n forth between my new home, Phoenix, and oversee projects for weeks at a time. I haven't done that this year because of Covid so its been difficult. In that time I've completed 20 projects in the city of Pontiac, Westland & Michigan, as buy & hold and flips. I've been through nine contractors, which is nine to many in my opinion, two of them I pursued legally and won, one is currently being pursued for poor workmanship. I have five projects I've done here in Phoenix that don't have half the problems I do in Michigan. For all the projects I've done they came referred by just people I know or other investors. I'm at my end at this point and I'm thinking of other routes to find good, reliable contractors. I can't network at events because I don't live there full time so I started thinking of apps like HomeAdvisor or Angie's List. Do those really work and are there other applications I could try to hire reliable contractors? My business partner and I are acquiring a large portfolio in Pontiac and I would like to have someone I can trust do some repairs and upgrades for us and hopefully keep for quite some time. Any advice or tips would be greatly appreciated!

Thank you both for the information and feedback. This helps greatly!! 

Considered to be the most financially free form of investing one can do in their lifetime, growing your net worth exponentially, buy & hold real estate. I've been in the real estate field for almost 7 years now. In that time I've been an ISA, property management, lending and now residential sales & investing. I've read all the cliche books they tell us to read in doing this business from 'Think and Grow & Rich" by Napoleon Hill to "Secrets of the Millionaire Mind" by Harv Eker, all the sales dog books and tapes, etc. Great reads if you haven't dived into those but nothing teaches you more than experience in this industry. I tell people all the time this is a trial and error business. There is no way around it. There's nothing like buying your own primary home to your first buy & hold investment, flip, wholesale, dealing with contractors, agents, lenders, and all the wonderful things involved with home purchasing and managing deals. I'm grateful for so many of the lessons in doing these things and ultimately they've put me in the position I'm at thus far. However, I seem to be hitting this plateau where for the last few months haven't acquired anymore homes and keep getting hit with these steep costs to getting a credit line or these facility loans. My partner and I are so far ahead of most people starting off on the acquisition side and we have all the working pieces to grow exponentially but we simply lack the capital it seems. You watch the videos of working Mom buys 15 homes in 1 year to the guy out of Atlanta went from a 9-5 to 300 doors in 6 months and now full time investor. Even the investor online who flips homes constantly but boasts how he never uses his own cash. How is this possible? These aren't in the books and these aren't people willing to give their contacts straight away. I thought I came close to one when I found a commercial lender who performs these big loans but the problem with that is all the fees associated to get started. You gotta pay 2% origination fee, $6,000 due diligence fee per $1MM, 10% per property you acquire and then you only have so much time to then re-fi out of that to convert it into long term debt. When you do math you’re far better off just going traditional lending and doing the 20% down on each multi or single family home. I know there’s a much easier and streamlined way out there without needing to wholesale to get capital or cashing out all the equity in all my properties. Or maybe I am avoiding the inevitable and I just gotta raise capital and someone needs to tell me that but I just can’t come to grips with that yet. Timing is everything in this business and there are markets right now that we’ll never see again and I need to capitalize on that. I seen it 2011 here in Phoenix because there were people that quietly acquired properties left and right during that down market and are so well off now. I want to be in that same boat 5,6,7, 10 years from now and happy I capitalized in 2018, 2019 market. So, what strategies or connections do you all have where you acquired large sums of money to get multiple properties and commercial deals? Any insight would be greatly appreciated!

@Nicky Reader couldn't of said that better. The good ones will find a way to be legitimate and keep business and the rest of the wholesaler hacks will off. It's what our industry needs and hopefully yes, NAR cracks down on this part of the industry as a whole and it plays in all states here soon.

@Heather Rodden great plan in doing a vacation rental. I'm in Phoenix and warm climate markets do well with these depending on the city and what attracts them there. A few things I would focus on for your rental is, convenience, does it have high walking score neighborhoods and cater to grocery stores, food, bar, major attractions, etc. Proximity to airport for travelers. Crunch your neighbors for the low season and base your cash flow off of that. If you can cash flow decently off of the slow months, it's something to pick up. I actually have a video on my page about short term renting. Follow my Instagram link and it's there for you. I hope that helps a little.

@Patrice Boenzi this is what the industry needs and it was just a matter of time. Start holding people in this industry accountable and to be ethical. Wholesalers do so much harm to the public but don't face the recourse us agents do because they aren't licensed. This will hopefully start leveling the playing field some more and being based out of Arizona, this will hopefully start making it's way down here.