All Forum Posts by: Will Barnard

Although the search function on BP leaves little to be desired, it has some usefulness. In a quick member search (top right of your screen with magnifying glass icon) searching for "members" and "Alabama" I got hundreds of hits.

I also recommend you find local real estate meet ups (in person or virtual) and start there as well. That said, to learn the ropes of flipping or wholesaling, you don't necessarily need a AL local for that (unless you are in need of assistance on local market conditions from experts - which can also be found from experienced agents). Read through BP and stay active, plenty of us here to help you on your journey.

Start building your team!

Then put a marketing budget together and start marketing for off market deals to distressed or absentee owners. Granted they likely get a ton of these from other investors but it is a numbers game. Having a website with a we buy houses landing page and SEO the heck out of it will be yet another option as is driving for dollars.

Michael's example above is one of many ways to look at "ON Market" deals. Typically, those are going to be very tight especially in competitive seller's markets where pricing is very aggressive. That said, I have purchased my fair share of on market properties but the spread was created through value add, not your typical fix and flip.

 Don't assume anything, investigate and know! 1. Adding new windows can add value to the home, if they are very old, then replacing is a good choice in most cases, not all. 2. Again, don't assume, find out. If it does need a re-pipe, and new electrical wiring, then expect to gut to studs, patching swiss cheese is more labor intensive so it is better to gut and start fresh. 3. Refer to answer in #2. 4. If yes to #2 & 3, then yes to this, gut it.

My Resume: Advice above from 15 year+ real estate investor, plus licensed contractor in CA.

So here is my OPINION and is NOT to be construed as legal or tax advice:

If you have any personal assets of any value that you do not want at risk, then starting off with an entity and operating it properly (as to not have the corporate veil pierced) is the way to begin. if you were informed to flip out of an S corp, then that is what I was advised when I first started out as well. I held properties in LLC's and flipped out of AS corps. The only tax savings is the savings on social security and medicare taxes while avoiding double taxation as in a C Corp. S corps and LLC's (which an LLC can also have S corp tax election) are "pass through" entities where the business does not pay taxes, the income is passed onto you and your personal return.

The liability protection comes from the entity holding title to the property so that any law suits would go against the entity and not you personally (except for cases of negligence by the owner of the entity where the corporate veil could be pierced - there are other means this can happen too).

If you are looking to do this as a business and not a hobby, I recommend the entity route and make sure you have more than adequate insurance as your first layer of protection. The entity is layer two.

As far as volume, if you are only going to flip 1-3 properties, then I guess you can certainly skip the entity and just add additional liability coverage for added protection. When making offers on properties, having an entity name also provides you the professional appearance to lenders, sellers, agents, etc.

Then look at it this way, how many days/hours did it take you to do the last one and how much in materials did you spend. Using your local common price per hour rate for painters, do the math, then expect to pay a premium for this to be done and managed by others. What can you be doing that earns you more money than painting yourself? Take that into consideration as well. If you flip a lot of homes, why not scale even more and start doing the work that suits your hourly rate as opposed to working in your business as an employee!

Excellent advice from Jeff above. 2 thumbs up!

Better to ask a painter in your area. All white with one sheen is one thing, all white with doors and trims in semi gloss, walls in low sheen and ceilings in flat is still 3 paint colors as the sheen is different for each area. Of course you can paint flat on walls and ceilings to save but flat paint on walls smudges easy and is not easy to clean. Also, 1400 sf house still needs more details for an accurate bid from painters - ceiling lid height and wall layouts can differ in each 1400 sf home. Then there is quality of painter and quality of paint used and if it is vacant or if furniture is there. All this makes a difference in cost.

There is a vast range of structuring options in syndicated deals therefore there is no one answer or one size fits all. Every deal is different and every syndicator is different.

Typical transactions have an equity split between the sponsor and the investors. They also typical have acquisition and disposition fees, management fees, etc, but not always.

I don't know everyone's opinion, but mine is this: double closing adds two closing costs to the transaction instead of one reducing the spread in the deal. If you don't have your own capital, you also need to borrow transactional funding adding more costs to the transaction. So from a cost stand point, this is a more costly way to do business. That said, double closing your sale to the cash buyer within a day or two of the first closing means you may very well have been marketing the property once you had it under contract which would be one of many ways to violate brokering laws.

The assignment version is much less costly, but again, you are typically doing it illegally this way by violating brokering laws without a license.