2 Yrs Later…From Newbie w/$30K to being Full-Time w/$600K equity

[Jeff Filali]

Please read my latest BP Blog:

[Jeff Filali]

@Kate J. Almost zero leverage. Almost all my held properties now are rented.  My build strategy is simple really, it all focused on ramping more capital at first without over leveraging. 

>>>>>My Process & Exit Strategy<<<<<

I've never lost money on a real estate deal yet, or even broke even for that matter. I never predetermine my exit strategy on any deal, meaning I don't look at deals as this one is a wholesale, that one is a fix-flip, and that one is one I'm going to hold as rental. In the long run I want to have a lot of buy/hold rentals, but I don't have to look for them, they'll happen.

This is my process and exit strategy on every single deal.

Step 1: Never go above my criteria numbers, for SFRs (65% ARV minus repairs) & for Multi-Units (50x gross monthly revenue), if it doesn't fit that, its not a deal for me. (Note: in your market, your preset numbers may be different, but figure out what they are & stick to them.)

Step 2: As soon as I have a signed contract, it's forwarded to Title Co., and I start offering to wholesale the contract prior to Closing, and I'm not afraid to turn offers down. 

Step 3: if I do not find contract buyer prior to closing, I close the deal myself, clean up the yard & remove any contents, and continue offering it "as is" wholesale for up to 2 more weeks, while scheduling contractors to rehab.

Step 4: If it's not sold by 1-2 weeks after closing, then my GC starts the Rehab but I keep marketing it as "under construction" with list of planned updates and the price raised to ARV. (If the right offer comes mid-rehab, I can sell it & contract with rehab included.) You don't have to wait until the rehab is finished to sell the property. Builders pre-sell properties all the time, so can you.

Step 5: Post-Rehab continue to offer for sale cash or other financing only. Usually I allow up to 15 days at full ARV or even a little higher to see interest level. If a lot of interest but no offers, may let it go a third week. If it hasn't sold by three weeks, I A. Lower Price, or B. Offer other terms in Step 6.

Step 6-A: Offer Rent-to-Own

Step 6-B: Offer Seller Financing

Step 6-C: Offer as straight Rental

Recap-

I never predetermine which deals will be my buy & holds, I look to wholesale or rehab/flip every single deal, because growing your capital only puts you in a better position for more deals. The buy & holds will happen once they don't sell and make it to step 6. Sure there may be ones that are perfect for buy and holds, but I still offer those for sale but may be firm on a higher price.