All Forum Posts by: Andrew Holmes

@Account Closed

Let's please get the facts straight. 

1. The blue USB stick we give if someone is coming to the 3 day is a list of few hundred houses that are either pre foreclosures, probates etc. The entire list of pre foreclosures, probates, bank owned properties, cash buyers list you can buy from us for I believe $159 per month. That is about 40,000 distressed properties. Chicago REIA has over 800 member most don't do mailings or active marketing at all.

Not sure if you have ever been to anything I have done here. If you use the list actually use it. Please let me know personally. We will REFUND YOU 100%. 

2. If you stay for the evening workshops it extra. or $ 159. 

3.  As far as 2-5-7. With one property you can never pay it off. you have to have 5 properties. 

You take the cash flow from 5 direct it to one. Pay that off then attack property number 2 and so forth. 

Goal being all are paid off in about 7 years. 

George: Here is my challange. Go to the 3 day. Don't pay a dime I will comp you. 

At the end of the 3 day. Please write an honest either a critique or a correction to your critique. 

At the end of the 3 day if you do not get 100 more value yes I said X100 time please do not pay a dime. 

If you did then please give a check to Chicago REIA for $ 159. I think that is fair deal.

I take comments made by folk very seriously because it is very easy to make to make comments. 

We provide all the address for every property we talk about and I have the track record to prove it. Including people who follow exactly what I do. 

Real estate investing is my life's work. I have worked my way up from the very bottom. I challange anyone that can show as much proof as I can as to what I believe in and not only just my own list of properties but also of people who follow what I suggest. 

I think that is fair? A free ticket to the 3 day and then an honest critique or constructive feedback if I did a good job with sharing info. I think that is very fair. 

You don't have to agree with my way of investing but in the Chicago area you are not going to find as much success as I have created. 

@Kyle Miller

@Caleb Heimsoth

@Aziz Raji

@Cody L.

Guys thanks for getting the thread started. Cody L. Love your numbers now we are talking some good fun number. Totally agree. 100%. 

At this point you have not closed yet and you have become aware of the city violations. As you know depending on the violation in the city of chicago it can be a major issue. 

From a pure disclosure stand point now that everyone knows about it including the listing agent if you cancel this contract they must disclose the violations. Weather you proceed with the sale or not is your call at this point. You can always cancel the contract if the numbers don't make sense. 

The seller if they knew must disclosure according to the law but at this point since you know they are not required to give a credit. It is sneaky that you were not told. If the agent knew and did not disclose that can be a clear violation on the agents part but now that you know it's your call. 

The seller can choose to sell it as is and you would inherit any issue with the city. The city may also want you to sign a affidavit that you will fix the violations after purchase.  

@Eric Anderson

Thank you the kind words. Wish you the best. 

@Stephen E.

The reason for the limit per LLC is so we put a approx $ 750K to 1 Million in company.

So the though process to limit your liability. 

So lets say you have 50 propeties. 

Then you and put 5 properties in each LLC and have 10 LLC's

Or 10 per llc. for asset protection and segregation. 

So let just say I of your LLC's get sued. Then in case of liability only that company has to deal with it. To own 50 properties and 50 LLC's would not make sense.

So to maintain an LLC and taxes it costs minimum of $ 1000 per year. So if you 1 proeprty per LLC and your cash flow from the property is a total of $ 5000 that year then you have lost 1/5 or more of your net earning just in maintenance of the LLC.

I think for each investor it's what they feel comfortable with based on the advice of their attorney and accountant and their judgement and growth plan. 

So the reason 4 Times net worth in umbrella is because as your equity and net worth grows you should keep up with the umbrella coverage growth. Another thing to keep in mind is not just net worth but also cash flow earning each month. That should be taken into account as well. 

I went and spoke a few different trial lawyers that have sued landlords and property owners directly and won massive cases and this is what they suggest. Unfortunately most of the advice given by most attorneys should be taken with a grain of salt because yes it is better than coming up with stuff on your own but most of these attorney are not in court.  Unless you have ever been sued you don't realize that most attorney's do not go and argue cases. Once you are in court a lot of games that people play with hiding assets and silly things these seminar speakers want people to do does not work. A lot of it is BS. it sounds great in a seminar reality has nothing to do with it. 

@Sharon Tippett

Ms. Sharon a lot of folks like @Cody L. @William C. @Bill Gulley have made a lot of great points. 

Just a few thought. 

When a course is advertised as No Money No Credit: What they forget to say is you YOU NEED BRAINS & Work Ethic. 

If they said No Money/ No Credit will need a **** load of work ethic and you must have brains no one would guy. Additionally it will require a hell of lot of hoops to jump through before you succeed no one would every join. 

If you have ever wanted to loose weight or do anything we live a society where people want to be rich, sexy and happy all the time with little to no work. We want to find a software or an app that will do everything. If we as a society can sit on the beach and eat boon boons and then we are all for it. 

Keep in mind if someone is an expert or has a lot of experience in real estate they can do No Money/ No Credit deals why? Because they have all the other pieces already in place. So they can borrow, partner, wholesale or do all sorts of things on a deal. They have credibility and proven record people will jump through hoops to do deal with them. 

When someone start out and asks can you do No Money/ No Credit deals. The answer is yes. 

BUT there is a catch. 

If you are getting started it will be a hell of a lot tougher for you than people who have already paid that price. 

My suggestion: Do not believe any claims on the internet. There are a lot of folk who are real hero's on the net and complete zero's in real life. Go do your own research. Go meet investors in your area. Do online research. Look up your assessors records or have your agent pull past sales in your area and look up who is doing multiple transactions that you want to do then go talk to these folks. Verify the real investors that have a history and do multiple transactions. 

Ask them a simple questions. If I bring you a deal will you partner with me on the deal even if I can get a small percentage of the profit. Rather than just a wholesale if you can somehow be a part of the transaction you will learn a lot more. 

Then start looking for deals. 

A great deal will always get a seasoned investors interest. 

You show a bottle of booze to a guy who loves to get drunk they will come running. 

Good real estate investors are like crack addicts. They are just hooked on great deals rather than crack. 

Get to know one area of your town. You need to know every sale in the last 6 months in the area in the price range you want to work in. What price where good flips bought for? What did they sell for?

How much work was done. (Approx). A lot of this data is available on the net now a days. You will also have to start driving some of these areas. The key is to understand

Retail Fixed Up Price (ARV) Vs. Distressed MLS sales (What average person thinks is a good deal) Vs. What seasoned investors would pay for a property.

Every community, zip code based on the type of properties will have a pricing structure. Once you understand what is a great deal vs just bs properties life becomes simple. 

You may miss out on a lot of deals initially it's ok. 

If you look at most people who succeed they have all gotten a lot of bloody noses. As long as you don't loose money that is all that matters. It's a numbers game. 

Here is a fun challenge: 

Look at 30 distressed properties in your area just for the MLS

Then go and look up 30 homes that you think are really nice versions of those

Then look up the past 12 month sales vs 6 month sales of similar homes in the same area. 

You will suddenly start finding some good deals just off the MLS. 

Now if you can do the same on off market deals you really have something. 

Chris: You can buy coverage I don't have the lady's number off the top of my head but you can PM me and I will be happy to send it to you. You can just buy the coverage instead of the employer buying it. 

We looked into buying coverage as a group through our business but it's very expensive and does not make sense if you do the comparison. Only reason some people have to go that way is if have some one has preexisting conditions or pregnant to get instant coverage. 

I don't want to get into a lengthy health insurance thing but as long as you are healthy you can get coverage. The deductible is about $ 3000 and very reasonable rates.

Hope that helps.    

@Brandon Johnson

If you have any deal you come up with please keep us mind. We will buy for cash as many transactions as you can come up with in that entire area as long as numbers are good. We are buying about 150 houses each year locally so always looking for good transactions.

If you have really hot deals and need earnest money for deal we will even put that up only condition we get the first shot at the deal. If we don't buy you can wholesale it someone else

Also please share your mailing ratio once you mailing goes out. 

We tend to do mailing for preforecloures  as follows: With multiple touches to the sellers

1. Preforeclosures 30 Days from auction 

2. Deals with equity of atleast 40%

3. Deals have less than 40% equity

Probates also multiple touch mailing

Out of town owners & Investors with 2 or more properties also is a multiple touch mailing. 

@Darsh Patel

Hey Darsh: Great question.

From an investors perspective based on growth not taxation or asset protection

If you want the best taxation advise talk to a good accountant or CPA. 

Asset protection talk to a good attorney. 

Where do put properties in your personal name, LLC or S corp is going to depend on your goals, asset protection, long terms planning.

If you are under 8 properties you can hold them in your personal name and insure them property with a additional umbrella coverage. 

If you want to grow quickly then here is a plan we follow: Assuming you intent to scale to 25 properties. 

For Rentals. 

Each LLC or a Each series in the LLC holds 5-6 properties for asset segregation.

1-5 properties Personal Name - Then transfer to LLC or S Corp (S corp has some other advantage not getting it to that for this discussion)

6-25 Properties Buy directly in LLC (limiting 5 per llc)

Some people in the tread had suggested that 1 property per LLC. I don't think it makes sense because of the costs. I think a few properties per LLC makes more sense and will depends on your goal.

As far as insurance. We have 1 Million per property and Personal Umbrella of 4 time your net worth. So assuming you Total assets owned - Liabilities = 1 Million then we carry a 4 Million personal Umbrealla in addition to the insurance on each property. 

See Examples Below on the setup . 

I went to SHK University and graduated with a  Degree In Real Estate

Lol that is School of Hard Knocks

My goal was to get an MBA the traditional way but when you quit college to pursue a crazy idea of being an entrepreneur it is hard to get a MBA from college. 

Took to the age of almost 38 to get an MBA - Mega Bank Account never got a traditional MBA. 

I wish now looking back that I had finished college followed the traditional path and then pursued my entrepreneurship dreams.  

When I talk to a lot of my friends that went the traditional route they tell me even thought I went through some very rough years The School Of Hard Knocks paid for me. Yes financially but to this day I wish I had made some different choice early on. 

In terms of Net Worth and cash flow my approach worked. Not sure I would want to advice someone to repeat that approach. I think getting a college degree and then get a job and then start real estate on the side makes like a lot easier. 

The only problem is then you get a job and a sense of security. In my case I had to succeed because  I had no other backup plan. Failing was just not an option. 

Success is a journey and not a destination. As long as your growing and moving forward each year in the right direction then you are successful. 

So I would have just done it a little different but I don't regret my choices just that there was a way that could have been easier.