All Forum Posts by: Andy Sabisch

A word of caution - there are a lot of "gurus" that offer free training that turns into an expensive course that will not give you what you are looking for other than what you can find for free online or here on BP.

If you have a REIG in your area, join that and see if you can shadow some flippers and pick their brains.   Most will be willing to help you get heading in the right direction. 

Look at some of the books offered here but realize that some are dated in terms of reno costs, etc.  Use the calculators and run a lot of numbers to see what works.  

Ask questions here and we will be more than happy to help . . . remember all areas are different so what deals work in one area may not work in yours and vicea versa.

I agree with Peter but have to ask what your background is?  You need to have a basic knowledge of the area, reno costs, ARVs, etc. before you approach investors or lenders offering to help either advance their business.  Hate to say it but with the Facebook gurus and YouTube experts, people are getting into this business - and it is a business - that lack the knowledge to bring value to the table.  We all learned at the beginning and sometimes getting tied with someone that can show you the ropes is a better route to take than to expect instant acceptance.

Your post reflects a new BP member with no signature file to provide the backstory details . . . reflect on your request if you were a seasoned investor / lender

As Caleb said, the three are still the main pipelines. MLS deals are out there as long as you can ensure the numbers work. Doing one now that will have a good payout and we got it from a terrible listing and even worse photos. A lot of agents think that homes that need work only warrant a few cell phone pictures and a line saying "As Is" . . .

The wholesalers need to be vetted - a lot of people are paying for courses to make money with no investment and have no business doing wholesaling.  Ask the wholesaler how long they have been doing it, how many deals a month they offer up and how many are solid enough to get investors to buy them.  We have no problem paying a finders fee for quality leads but you need the right one.

REIGs are great ways to meet other investors and see who is selling flip type properties - cheap investment in your business

We are dealing with this right now and a contractor that we have used for years . . . 100 stories.  The problem is exactly what you asked - the good ones are booked and the bad ones while available are not who you need to help.  Having backups and possibly spreading the jobs so you get at least some better priority when calling is all we have found to do.

Wholesalers have gotten a bad reputation due to the vast number that bought a Facebook course, watched some YouTube videos, post a number of bandit signs, hire a VA using the same lists 1,000 others are using and see it as a way to make money with no investment. The problem is 90%+ have no business being in the business. They have no idea what a reno cost is, how to come up with an ARV or how to table up a deal. They tie up the property, promise the seller more than they can deliver and usually offer up deals that only a newbie would fall for. That is why regulations are coming to tighten up on this end of the business.

We have two wholesalers that we have come to trust . . . they find solid deals, have good spreads and offer individuals what they are looking for. I got real tired of my mailbox filled with over inflated deals often with the same house from multiple "wholesalers". If you find one that actually understands the reno process, comes up with an accurate ARV (or at least realistic) and sends you a targeted list rather than dozens of crap properties, they are worth their weight in gold. They find properties and I can use that time for actual reno work and moving ahead with projects. If you take the time to feel wholesalers (or those claiming to be) out, you can quickly see who knows what they are doing.

That is what I mentioned in my earlier post. Being conservative in the ARV and over estimate reno costs will give you a buffer especially if the project takes longer than expected and the market continues to soften. Dropping prices tends to show desperation to buyers which encourage them to come in even lower or wonder why it has not sold. There is a saying that every house has its price - the trick is to make sure you hit it out of the gate so you get a quick sale and move on. We would rather leave some on the table and get a quick close that hope for more and sit on it

With the shift to a Buyers market, we plan on a lower ARV at the end and make sure the numbers work when we start. There have been several members here recently that assumed the ARV would hold or go up and found out the market shifted and their profit was vanishing. If the property was bought right, shifting to mid term or long term rental is an option but it has to cash flow for us to consider that as an option. In many areas the rental market has also cooled off. The STR market is a killer with over saturation and many areas enacting restrictions so we never even look at that as an option. Refinancing if HM was used is something that should be considered at the start and activated before the HML terms increase.

As I and others have said before, make sure you have a solid contingency built in to the project before you start, be realistic with the reno and ARV amounts and have more than one exit strategy in case things have shifted.

The cardinal rule you need to remember is you make your money on the buy not the sale.  If the numbers do not work based on the scope of work, carrying costs and more importantly the contingency that has to be there, walk away.  You might leave more deals but you are leaving with your bank roll intact.

There are still good deals out there and even some that wholesalers bring you if you have a quality wholesaler but there are more mad deals than there were even a year ago.  The softer resale market needs to be a factor in your decision making process and never try to force a deal to work by shaving costs off your reno estimates or hoping for a bigger sales price . . . never works out

As Scott said, there are two different paths and while they are not mutually exclusive, they are different and require different approaches.  Quick flips are harder to find as even a cosmetic flip will not be a quick flip in most cases but taking the "shotgun" approach and buying whatever deals come through is not the way to be successful for many investors.  We have known some that were great flippers that saw $$$ and jumped into major renovations (heck they do them in under an hour on TV so how hard can they be right?) and were knocked out partially through the project due to today's carrying costs especially HMLs.  A delay in the contractors and a slow market pushed projects into that red zone where you need more time and it comes at a big expense.  Fast close loans are great but we have found that terms are just as important and if we need to pass on a deal because the quick close terms did not work for us, we do so and find another deal.

Interesting and informative . . . . do have to ask if this was AI / ChatGPT generated content