BP connections invaluable we had a 130k profit day today each

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BP connections invaluable we had a 130k profit day today each

Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

One of those great days.. I had met an accredited investor on BP a few years ago and we hooked up and took off... Many deals have been done all but one very profitably....

Good day today we closed two new builds and distributed 260k ish.. 120K to me  140K to my investor...

I brought the deals and the ground team to execute and credit.. He brought equity and credit

My ground team executed beautifully and we all had a great day.. my ground team partner ON TOP of this made 50k running the projects.. Plus all the trickle down money spent with subs etc.

Cherish those BP contacts.. Give the Money the better end of the stick.. I see so many on BP hunting for this unicorn private money lender trying to beat them down to under 10% returns.. Were in this case my investor doubled his money cash on cash in 240 days.... now what kind of private investor would not like that... do you think they would have rather done a deal at 9% interest and made 9k or did a deal with me and made 90k.

that's the moral of the story here.. I see to many on BP looking for money so cheap they never get any velocity.... Pay the MONEY Pay them Well you will make It up in the long run..

If its your idea and their money they should make the better half of it.. Not what I see on BP were they want to pay the money pittance and they make all the money.. and then really never do anything.  I never could understand that.

So at the end of the day who needs rentals  LOL..

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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
9y

I'm with you @Jon Q.  Shhh!  Don't tell anyone rentals can be good.  I may have to get out of my pajamas.  Rentals are terrible!

Many congrats Mr @Jay Hinrichs.  Thanks for sharing a bit of your business model.  You've done so many things in your long career, I was losing track!

Our little area is expanding like crazy for development.  Medium density 6du-15du/ac. The blue leaders and planners know we need 1500 more units to meet current demand and are loosening a little bit.  Just to let you know.  I can PM you some articles and such if you like.   Congrats again, bud!

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  • Brandon Barnes
    Wholesaler · Columbia, SC · Member since 2016 · 121 posts · 28 votes
    9y
    Always good to remember it's it's not always about the cost of the money but how available it becomes for you. Always take care of everyone. Glad to hear of your success story!
    0Reply
  • Leigh C
    Brooksville, FL · Member since 2012 · 429 posts · 220 votes
    9y

    @Jay Hinrichs     Money is a tool and has a finite value.    It's easily replaced when needed.   Deals are the life blood of any flipping/development deals and should always get the lion share of the profit if the deals are healthy enough.     

    Assuming he made 140k on a 140k investment it sounds like the 140k investment yielded a (140k+140k+120k+50k+repair cost+closing costs) sales price.    Rather impressive to buy that well.    140k purchase, 500k+ sales price.     If you did that for me I'd give you far more than half.    Assuming any of this math is even close you could of done a lot better just wholesaling the house to another investor.      450k as is value at 65% is 292k.      That is 152k for you instead of the 120k.

    Congrats on the fat check, you stuck paying taxes on it as normal income or have you figured out a better way?

    1Reply
  • Account Closed
    Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
    9y

    @Jay Hinrichs  A good team and an experienced partner is normally worth much more than 10%.

    0Reply
  • Leigh C
    Brooksville, FL · Member since 2012 · 429 posts · 220 votes
    9y

    @Account Closed  Eh, I pay my ground team 5% of gross net.   Jay paid over 15%   Obviously nobody knows to what scale this project was.   Mine are typically low time investments, something like 10-30 hours per house.   Also we go by volume as some houses are super easy with high returns, others all of us regret ever taking it on, good washes out the bad in theory. 

    It's also worth mentioning, i rarely see over 100k profit, never have we gotten over 200k.    We still play in the short end of the pool for the most part. 
        

    0Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Leigh C  to be specific

    these are new builds  so you can't wholesale them... and I am not a wholesaler.. LOL

    In these instances these are in Charleston SC...  one sold for 549k and we netted 190k profit ( which is about a record for me on a new build.)

    the other one we sold for 350k and netted 84k  for a total net on both deals of 274k...

    In Portland we do not do near as well we only make 50 to 70k a house on a 370k sale  but we did 30 of them this year... so yes we make it up in volume...

    This is just our new construction side...

    We have a lot more going on than just this.

    And of course we are bless with Vertical financing from our local banks at 1 point and 5.5 to 6.5 % on drawn funds.. our equity is the lot .. we pay cash for the lot.

    so with the one on 7 1/2 Woodal that sold for 549k we were in the lot 109k cash the rest was bank loan.

    4625 Oakwood we were in the lots 20k each the rest was bank loans.... so our cash on cash return is quite stellar actually..  Triple our money just about on the 109k  and 4X on the 20k.

    I don't mind having massive write on's  .. would I like to pay less tax Sure who would not.. but as long as there is something left over at the end of the day that's what counts.. its all about volume and velocity... do 2 or 3 a year well that's just a job.

    do 30 plus like we do and well that's a good job and a 7 figure income.. now that's something I like. !! and its 7 figure for myself and my investor...

    my point is I could do these by myself ... but for me.... in these instances I bring no money in and its all profit.. I do sign on the construction loans though.. And at least starting out my investors would have a hard time getting verticle loans without me.. ( about impossible) because they don't have experience .. were is I am long on experience and track record .. plus strong balance sheets the type of things lenders look for.

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  • Leigh C
    Brooksville, FL · Member since 2012 · 429 posts · 220 votes
    9y

    @Jay Hinrichs   Ahh, makes a lot more sense.    The joys of leverage. 


    0Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Leigh C and of course you make money on the buy... but lots usually go for fair market we buy them right off the MLS generally.

    the ones we got for 20 a piece was becassue I bought 2 houses and split it into 7 lots remodled the existing homes sold those then built 5 specs on the lots... that allowed my basis to be pretty good in those.. fair market on those lots would be 50k each... so I could have sold the lots for a profit.. or did the full build and make a lot more  our normal 50k plus the delta of 30k on the lot equity.

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  • Leigh C
    Brooksville, FL · Member since 2012 · 429 posts · 220 votes
    9y

    @Jay Hinrichs  Flirting with the idea of building spec houses down in the keys.   Up till now i've focused only on flipping with zero experience in new builds.    Over 60 flips completed in 2016 with 30 more in the pipeline to be sold in 2017.  

    0Reply
  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Leigh C  that's monster production on the flip side.

    much harder you have to go buy the inventory.. were buying lots is generally much easier.

    Every time I fly into Charleston I will buy 1 to 4 lots in a two day period.. finding rehab homes that fit the number is much tougher.. and I would suspect you have to be doing direct mail and other marketing to fill your pipeline.. We spend ZERO on this in money and or time.. Agents bring us our deals.

    we are active in the flips in Orlando will do 20 this year there... one of 12 markets we are in...

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  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Leigh C  and in Portland I buy subdivision that are generally 20 to 30 lots each.. so once I close on them I have 20 to 30 jobs all in one spot  and are mine never have to go hunting until the next year when I am looking for the next project.

    so there is some benies in new builds.  but new builds take longer.. but we get through the 20 to 30 home subs in usually about 10 to 16 months start to finish.. just hampered by man power right now.

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  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
    9y
    Originally posted by @Jay Hinrichs:

    One of those great days.. I had met an accredited investor on BP a few years ago and we hooked up and took off... Many deals have been done all but one very profitably....

    Good day today we closed two new builds and distributed 260k ish.. 120K to me  140K to my investor...

    I brought the deals and the ground team to execute and credit.. He brought equity and credit

    My ground team executed beautifully and we all had a great day.. my ground team partner ON TOP of this made 50k running the projects.. Plus all the trickle down money spent with subs etc.

    Cherish those BP contacts.. Give the Money the better end of the stick.. I see so many on BP hunting for this unicorn private money lender trying to beat them down to under 10% returns.. Were in this case my investor doubled his money cash on cash in 240 days.... now what kind of private investor would not like that... do you think they would have rather done a deal at 9% interest and made 9k or did a deal with me and made 90k.

    that's the moral of the story here.. I see to many on BP looking for money so cheap they never get any velocity.... Pay the MONEY Pay them Well you will make It up in the long run..

    If its your idea and their money they should make the better half of it.. Not what I see on BP were they want to pay the money pittance and they make all the money.. and then really never do anything.  I never could understand that.

    So at the end of the day who needs rentals  LOL..

    I need rentals!  That last comment had to do with where you experience lies. The more experience you have in a given area (ex. development), the more efficiently you are able to manage risk.  It just so happens it seems that you do this well with regard to development. I do it better in owning rentals.  I can be in the Bahamas for half a year and I still get paid every month like clockwork.  And my tenants love me for the product and level of service I provide them.

    I'm happy with that.

    Jay, have you done any multifamily ground up development?  If so, I have a contact that I'd like to connect you with.  

    Also, right now I have more money than deals and have lots of accredited investors with capital, so if you're looking for more accredited investors, I can probably help with that.

    Please message me.

    0Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    9y

    I'm with you @Jon Q.  Shhh!  Don't tell anyone rentals can be good.  I may have to get out of my pajamas.  Rentals are terrible!

    Many congrats Mr @Jay Hinrichs.  Thanks for sharing a bit of your business model.  You've done so many things in your long career, I was losing track!

    Our little area is expanding like crazy for development.  Medium density 6du-15du/ac. The blue leaders and planners know we need 1500 more units to meet current demand and are loosening a little bit.  Just to let you know.  I can PM you some articles and such if you like.   Congrats again, bud!

    2Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    9y
    Originally posted by @Jay Hinrichs:

    One of those great days.. I had met an accredited investor on BP a few years ago and we hooked up and took off... Many deals have been done all but one very profitably....

    Good day today we closed two new builds and distributed 260k ish.. 120K to me  140K to my investor...

    I brought the deals and the ground team to execute and credit.. He brought equity and credit

    My ground team executed beautifully and we all had a great day.. my ground team partner ON TOP of this made 50k running the projects.. Plus all the trickle down money spent with subs etc.

    Cherish those BP contacts.. Give the Money the better end of the stick.. I see so many on BP hunting for this unicorn private money lender trying to beat them down to under 10% returns.. Were in this case my investor doubled his money cash on cash in 240 days.... now what kind of private investor would not like that... do you think they would have rather done a deal at 9% interest and made 9k or did a deal with me and made 90k.

    that's the moral of the story here.. I see to many on BP looking for money so cheap they never get any velocity.... Pay the MONEY Pay them Well you will make It up in the long run..

    If its your idea and their money they should make the better half of it.. Not what I see on BP were they want to pay the money pittance and they make all the money.. and then really never do anything.  I never could understand that.

    So at the end of the day who needs rentals  LOL..

    When are we going to the Bahamas already?

    hehe

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  • Jay HinrichsBusiness Member
    OP
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    9y

    @Steve Vaughan  I think I need to fire the Cirrus up and head up to E Wenatchee and check It out.

    One of my favorite flights and approach's is coming up your way... East flank of Mt. Adams then shoot the GPS approach that runs up the river valley.

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  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    9y
    Originally posted by @Jay Hinrichs:

    @Steve Vaughan  I think I need to fire the Cirrus up and head up to E Wenatchee and check It out.

    One of my favorite flights and approach's is coming up your way... East flank of Mt. Adams then shoot the GPS approach that runs up the river valley.

     Fire it up!

    Here's a link to a recent growth development article in case insomnia grabs ya sometime....

    https://www.wenatcheeworld.com/news/2016/nov/30/sewer-line-opens-area-near-east-wenatchee-to-more-development/ 

    1Reply
  • Jon Q.
    Investor · Berkeley, CA · Member since 2015 · 1k+ posts · 713 votes
    9y
    Originally posted by @Jay Hinrichs:

    @Steve Vaughan  I think I need to fire the Cirrus up and head up to E Wenatchee and check It out.

    One of my favorite flights and approach's is coming up your way... East flank of Mt. Adams then shoot the GPS approach that runs up the river valley.jsy

    Jay, congrats on this project man!

    I'm still waiting for a ride in your plane.  Let's discuss how we can make you some more $$$ and maybe we can arrange that.

    0Reply
  • Troy GandeeBusiness Member
    Real Estate Broker · Charleston, SC · Member since 2013 · 795 posts · 454 votes
    9y

    Way to go @Jay Hinrichs! I'm still looking out for lots for you! You should come to lunch with our little group next time you're in town. 

    I agree that cheap money is great, but it's more important to find the right deals. It's worth paying a little more of premium for readily available funds when you've got a great source of deals coming in.

    0Reply
  • Alex Franks
    Rock Hill, SC · Member since 2015 · 1k+ posts · 597 votes
    9y
    Originally posted by @Troy Gandee:

    Way to go @Jay Hinrichs! I'm still looking out for lots for you! You should come to lunch with our little group next time you're in town. 

    I agree that cheap money is great, but it's more important to find the right deals. It's worth paying a little more of premium for readily available funds when you've got a great source of deals coming in.

    @Troy Gandee tell me more about your group?

    0Reply
  • Troy GandeeBusiness Member
    Real Estate Broker · Charleston, SC · Member since 2013 · 795 posts · 454 votes
    9y

    @Alex Franks There's just a small group of us that are all active investors that get lunch once a week and share resources. I'm a newer addition, but it's less of a group and more of a little mastermind. I think we all just like that it's casual and there are no dues or restrictions. Everyone has become friends and there's no competition or piracy, which is great.

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