flip

Adopt a ‘Why I Shouldn’t do this Real Estate Deal’ Attitude

by Marty Boardman | July 1, 2011

Michelle from Michigan hasn’t closed a deal in over two years, though it’s not from a lack of effort. The real estate market there is in the tank. It’s no wonder she left me two messages, twice last Friday and again on Monday. She was excited about finally finding a profitable opportunity. I explained to [...]

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Real Estate Investing

A Family Recipe for Buying Houses at the Courthouse Steps

by Marty Boardman | June 16, 2011

Not much has changed on 5th Street in Belvidere, Illinois. My grandparent’s house looks almost exactly the same as it did when I was 8 years old. The wood-paneled walls in the basement are still there. Family pictures remain in the same place. The single bed in the upstairs loft, where I slept on during [...]

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Real Estate Investing

Are You Willing to Lose in Order to Win?

by Marty Boardman | May 26, 2011

“I have missed more than 9,000 shots in my career. I have lost almost 300 games. On 26 occasions I have been entrusted to take the game winning shot, and I missed. I have failed over and over and over again in my life. And that is why I succeed.” - Michael Jordan Thomas Edison [...]

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Real Estate Investing

I Want to be a Hard Money Lender When I Grow Up

by Marty Boardman | May 5, 2011

I got the strobe light at Radio Shack the summer of 8th grade. The mirror ball was a Christmas present. I bought more than 200 singles from Music City Records that year – artists like The Breakfast Club, The Jets and Cameo. I would spin those 45 RPM one-hit-wonders with an old Pioneer turntable. My [...]

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Real Estate Investing

How Hanging Ceiling Fans Resurrected My Real Estate Career

by Marty Boardman | March 24, 2011

Who could possibly feel sorry for me? After all, I drove a $100,000 Mercedes Benz. I belonged to the Phoenix Country Club. I wore an expensive Rolex watch and dressed in hundred dollar Tommy Bahama silk shirts. I dined at restaurants like Mastro’s Steakhouse without ever bothering to look at the prices on the menu. [...]

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Real Estate Investing

College, Smart Phones and Goal Setting

by Marty Boardman | January 21, 2011

This week the USA Today reported that “nearly half of the nation’s undergraduates show almost no gains in learning in their first two years of college, in large part because colleges don’t make academics a priority.” The article went on to state that “after two years in college, 45% of students showed no significant gains [...]

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Real Estate

The Myth of “No Rehab” Rehabs

by J Scott | January 12, 2011

In the course of a typical week, I get to see and hear about a lot of properties for sale to rehabbers. Inevitably among them are properties advertised by sellers or wholesalers as “No rehab needed” or “Move-in ready condition!” Now, every time I read an email from a wholesaler that says a property needs [...]

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Rehabbing

The 8 Rules for House Flipping

by J Scott | April 28, 2010

It’s been a relatively tough real estate market for rehabbers/flippers for some time now, and with the home-buyer tax credit getting ready to expire at the end of this week, it’s likely only going to get tougher. That said, for smart rehabbers who know how to buy right, rehab right, and sell right, there is [...]

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Real Estate Investing

Why I’m foregoing making $22,000 on this deal…

by Jason Hanson | April 25, 2010

I just picked up a great deal. I could sell it right now and make about $22,000 but I’m not going to do it. I’m very tempted though. Obviously, $22,000 is a lot of money. So why am I not selling this property and taking the money and running? Because it’s a perfect buy and [...]

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Flipping Houses

Calculating Fixed Costs on a Rehab, Flip or Wholesale Real Estate Deal

by J Scott | March 17, 2010

Last week, my blog post discussed my method for determining the maximum purchase price you can offer for a property that you plan to rehab/resell or wholesale. In the formula I presented, I referred to “Fixed Costs” and I mentioned that I know my Fixed Costs to be about $17,000 on a typical project. I [...]

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Rehabbing

12 Improvements That Didn’t Pay: Learn From These Rehab Mistakes

by Justin Pierce | November 29, 2009

Two weeks ago I wrote a warning about over-improving and last week I told you about a house that I over-improved. I went long last week and I didn’t get to share any numbers with you. This particular flip was unique because there was another rehab home just around the corner from mine. It was [...]

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Rehabbing

Rehabbers: Know the Warning Signs of Over-Improvement

by Justin Pierce | November 15, 2009

Rehabbing or flipping is almost 100% art. There are very few hard and fast rules. The goal, like in any business, is to maximize profit. Many times I have quoted the old saying that you make your money when you buy a property, and I stand by that statement. Once you’ve made a smart buy [...]

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Real Estate Deals

Persistence is a Virtue. The Story of How I Got My Latest REO Deal.

by Justin Pierce | October 25, 2009

Let me tell you a story about how I made a bundle of money this week. It’s the story of how I captured my latest deal. Now when I tell you the story you may think that I’m counting my chickens before they’ve hatched but you really do make your money when you buy. Never, loose site of that important fact. In this case the money is made and in the bank. Now until the home is sold the money is mine to loose or keep, depending on how I manage the project.

Persistence and Ambition Lead to a Working Relationship

You could say it started about a month ago. A young ambitious Realtor contacted me when he saw my ads stating that I buy houses. He sent me about a half dozen listing and to my surprise the list had potential. I am a licensed and active Realtor but I appreciate a go-getter when I see one. I can only cover so much ground myself and I love to enlist the services of ambitious people. We looked at a few of these properties on his list and we made some offers but nothing came through. The beautiful thing was that this young Realtor came back with another list of properties. That is how I knew he had the stuff. Many Realtors say they want to work with investors but when they actually see the nature of the game they roll out quite quickly. The fact that this guy came back told me he was real deal.

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Real Estate Investing

5 Steps to Calculating the Purchase Price for a Rehab Property

by Justin Pierce | October 18, 2009

Knowing what to pay for a home is critical in the rehabbing game. I’ve come up with my own method for determining my purchase price for a property. While I don’t think my method will work for everybody, maybe it will give you a good place to start or perhaps, some new ideas.

There are a lot of different variables that you’ll have to take into account on any specific deal; I’m interested to know from other rehabbers how their math looks.

Calculating the Purchase Price for a Rehab Property

Step 1: Know the value of the property. – That is the resale, after repairs value of the home. Make sure you view actual recent comparable sales. Once I feel confident I know what a property is worth I deduct 26% from that price. 20% is what I like to shoot for in a profit. With the market firming up here lately I’ve been cutting that margin to 16% on real good deals. On bigger deals or on deals that feel a little more risky I stay firm with the 20%. I wouldn’t go much lower than 16%.

Historically homes sell on average for something around 8% less than asking price. If you’re only pricing in a 10% profit then you might end up just doing a practice flip. A practice flip is a deal where you don’t make any money. Essentially you donate all of your time and effort for free to the end home buyer. The other 6% is the number I put in for closing costs when I sell the home. I’m a licensed Realtor so I list the home myself, which will save me a little. So in my case, 4% goes to Realtor fees and the other 2% is what I budget for other closing costs. You can choose to try to sell the home yourself and save the Realtor commission. If you are not a Realtor and you plan on hiring a Realtor then you probably will need to budget 6% for the Realtor fees plus another 2-3% for closing costs. I always anticipate having to pay some of my buyers closing costs.

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Real Estate Wholesaling

Rehabbers, get to know some Real Estate Wholesalers

by Justin Pierce | October 11, 2009

In real estate there seems to be a culture of do-it-yourself. There is a swagger amongst investors who will tell you they can do almost everything and anything in no time at all. Now, I’m sure you could learn how to be a lawyer at the public library but I think formal training might be of some value.

You can’t be all thing or all people in real estate. In the next few weeks I will write a post about forming a Master Mind Group but for now I want to give a special plug to wholesalers. I want to both convince investors to work with wholesalers (specifically rehabbers) and I want to help wholesalers add value to their services. The first step to any business is to learn the business and the next is to learn what you should delegate to others.

Keep Your Friends Close and Your Wholesalers Closer

There is another cultural norm in real estate: if you can be cut out of a deal you will be. I don’t know how many times I’ve seen wholesalers, realtors, and mortgage brokers cut out of deals after performing significant services for which they were never paid. This is one reality that makes it very difficult for wholesalers to provide their best services. They have to spend almost as much time securing their position as they doing trying to get the deal done. Wholesalers don’t have the protections that realtors have. They’re actually a pretty skittish bunch. Cultivating a relationship of trust with your wholesaler will ensure they can give you the best service and increases the chance that you’ll get more good deals coming your way. The wholesaler/buyer team is much like a marriage. It can’t work very well if there isn’t trust or if only one partner is working on the relationship. In fact, I know many would-be wholesalers that leave the business because they bust the humps to find deals but then can’t find reliable end buyers. That is just a crying shame considering how rare the good deals. Help your wholesaler help you.

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