This is how our business works. Keith sat across from me at his desk and drew four boxes on a piece of white notebook paper. Inside each box he wrote:
- Acquisition
- Rehab
- Sales
- Raising Capital
Keith explained that in order for his fix and business to operate efficiently, and profitably, he had to have someone dedicated to each box. In the beginning, it was just him and his business partner so they split the four.
However, as their company grew they hired staff to help out with all of the boxes – it was the only way they could reach their goal of flipping 20 houses a month.
That was April, 2009. Keith had brought me on board to help him manage a few of his flip deals. A couple months later he would hire me as his Realtor. I was grateful for the opportunity. The housing market crash of 2008 had wiped me out, emotionally and financially. I needed the cash, and someone to show me how to run a fix and flip business in the post-boom era.
It didn’t take long for me to figure out how to leverage Keith’s success and start raising capital to do my own flip deals. My business partner and friend, Manny Romero, already had cash lined up for us to get started.
We flipped 8 houses the 2nd half of 2009, 32 in 2010 and 20 in 2011 (we did fewer last year because we started focusing on higher price points).
Like Keith and his business partner when they first started, Manny and I split the four boxes. My focus is on the acquisition and sales side of the model, while Manny oversees our rehabs and raises new capital so we can do more deals. By the end of this year our goal is to operate in just one box each, hire staff to handle the other two, and flip 6-8 houses a month.
We have the blueprint to do it. And after you attend the Four Flippin’ Boxes Bootcamp with J. Scott and I at the BiggerPockets REI Summit 2012 in Denver on Friday night, you will too.
{ 3 comments… read them below or add one }
That’s a great post Marty, and a great way to simplify what can be a daunting task; how to properly structure your business. Using “boxes” makes it very easy for folks to understand. This is a difficult thing to do especially for “newbies”. It can also be something that is hard to do as your business grows.
Thanks for the preview, thought you said no peeking????
See you in Denver, flying out now!
Great post Marty! Wish I was there for your class but the J-O-B did not make it possible. Hopefully in a year or two I won’t have to worry about that. 6-8 a month is great, good luck with that, I’ll take 6-8 this year!