All Forum Posts by: Chad Shultz

Joshua,

Looks like you had a nice little project there.  I am in the greater DB area and do many flips, some wholesale, have a few holds, etc.  If you want to connect, feel free to reach out.  I am always happy to help out, answer questions, etc.  It never hurts to expand your network.

Cheers,

Hello Charlie,

First think you might want to look into is finding a local chapter of the National REIA. This is an excellent place to be able to meet people who are doing what you do, people who support what you do, and people with resources for what you do. It is also the best place to network in person. While BP is full of amazing information and resources, nothing compares to building relationships in person. It is likely that there are many local "investor" type meetings. Be sure you find one that has a good history and is not just a "pop up" group, which everyone wants to start lately. A long standing organization will be around for a long time to come. The others can be gone tomorrow and you may not actually know who you are really connecting with.

Welcome to the community Davide. One of the most important, and most effective, things you can do is find a local REIA and join. Try to find one that is a member of the National REIA. You can learn everything you need there, from people who are actually doing RE Investing in your area. There are usually many classes for anything you need to learn. Nice thing is that National REIAs are not trying to drain your wallet. They are actually there to help others be successful. You will also find the best kind of networking you can get. Online forums are nice, but nothing beats networking and getting to know people in person.

I usually focus on other areas, like foreclosure and private properties. When I have time, I will look through the MLS, but I don't personally put a lot of effort there. When they are publicly posted, there are a thousand eyes on them already.

Finding a good deal on the MLS is tough. I have done about 50 flips and only bought 2 off the MLS. You really need to stick to your numbers and allow room for depreciation in this market. Proceed cautiously.

Jule,

I may be able to help you.  I am a local, Daytona Area, Licensed RE.  I typically only work with investors, so your project may fit.  We can certainly chat to see how I might be able to help out.  Please shoot me a PM and I'll reply with my contact info.

Investment Info:

Condo fix & flip investment.

Purchase price: $80,000
Cash invested: $109,000
Sale price: $160,750

Found a condo that we felt could be a quick, easy turn. This one was set to go to public auction for foreclosure. While bidding on the foreclosure, the auction was stopped and removed from the docket for the day. This was strange, so I looked into it more. I was able to contact the owner directly and meet in person to discuss the situation. I found out the owner stopped the foreclosure by filing a bankruptcy the morning of the auction.

What made you interested in investing in this type of deal?

This was a simple project with only interiors to worry about, since the condo took care of everything outside. It was a small space overall, compared to many projects we do, so we knew we could get in and out quickly.

How did you find this deal and how did you negotiate it?

After speaking with the owner who was in foreclosure and bankruptcy, we arranged a contract. We had the owner put the condo into a land trust, so we could purchase it inside the trust and avoid a public visible exchange. Within a week, we were working. The complete interior renovation took about 5 weeks, minus Thanksgiving and Christmas. We listed the first week of January and got a contract within 30-days. Buyer was cash. There was only one set of closing costs, so we saved there too!

How did you finance this deal?

This was a cash deal and we used our own cash to fund the deal. This allows for more profit, since we were not paying interest.

How did you add value to the deal?

Complete interior renovation, including HVAC.

What was the outcome?

We wound up making about $50k+- profit overall.

Lessons learned? Challenges?

Some condos have "first right of refusal" clauses in their docs. In this case, if we advertised we were purchasing for $80k to the rest of the owners, someone would have purchased it out from under us. In a Land Trust, we were able to do a contract for beneficial interest, thus not making it a public event and we were able to circumvent the "first right" clause. After the reno, when presented with the contract of $160,750, none of the owners exercised the "first right" and we closed on sale.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

I handle my own real estate as a licensed agent in Florida.

@Druce Asah: 

First thing, and most important... Wholesaling is a buzzword right now.  There are many, many so called "wholesalers" who have no clue what they are doing and they are the reason wholesaling is becoming unlawful in some states.  They don't have a clue what repairs cost, they don't treat sellers well, they don't know how to price properties and they give everyone in the investment arena a bad name.  You need to stick to your numbers and your formulas.  Let the poorly organized "wholesalers" die off when nobody buys their offerings.

@Thomas Franklin - overall, you have great information, but most people I know would not get out of bed for $20k as a starting point. The correct MAO should be ARV * .7 - all the other stuff you mentioned. I have never seen anyone teach MAO as 80% ARV, until the market went crazy in 2022-2023. This was when the so called "wholesalers" couldn't stick to formulas because they would lose out to the next guy who cheated the formula, so they started cheating the investors who actually handle the flips and changed the formula to 80%. There are always surprises and 20% in most deals won't cover the bills. Once people figure the proper MAO, they can adjust accordingly, depending on the project and their experience. Even better, investors should stop using wholesalers and find their own deals where they can get them for ARV * .6 or better.

Hey Jule: Nice to hear about your upcoming project.  I am local in the Daytona Beach & Ormond Beach area.  I have personally done about 50+- projects in the area, mostly fix and flips.  My projects are not a "typical flip", but rather a professional renovation on a property.  I usually set sales records in the areas where I complete a home.  I do this because I like to stand out from the typical "flip" person.  Typically, "flip" is a word that scares buyers because many people have a history of no attention to detail and not completing projects correctly, or covering up issues instead of addressing them.  I am also a licensed realtor in this area, so I am very familiar.  I would be happy to go by your property and take a look to help you evaluate the situation, so you can make a better decision on how to proceed.  I can also help you with recommendations of responsible and professional workers, so as to eliminate a lot of the trial and error that comes with contractor hunting.  Send me a PM, if you want to chat more.

Hello Jared:  I am licensed and live/work/invest in Ormond Beach.  Send me a PM and I’ll give you my phone number and contact info.