All Forum Posts by: Chad Shultz

 Funny...  Some of us don't have that luxury, but nobody needs to spend big money on a "system".

You don't need to by anyone's "system" for flipping houses. Your best bet is to find your local REIA chapter and join. There, you can learn anything you want about Real Estate Investing from actual investors who are in your area. Cost will be minimal compared to falling for the systems where they want to keep upselling you.

In my approach, I use Land Trusts for most all my purchases. This offers lots of legal and personal protection(s). Not all states offer Land Trusts. My LLC is the beneficiary of the particular Land Trust. Ultimately, it depends on your plan for the property. You cannot usually borrow from a "normal" lender in your LLC. Either way, all transactions flow through my company, then to me, even with a Land Trust. My company is taxed as an "S" corp, so there are tax advantages to doing it this way. You should decide what the reason is for your question. If you are asking because of taxes, you should check with your accountant. If you are asking because of legal protections, check with your attorney, etc. Attend a local REIA meeting where you can speak with seasoned people in your area to see what they do. This should help you make a better decision.

Katlynn,

It seems many folks, in my opinion, make a lot of errors by assuming others will follow through.  There are many good tradesmen and tradeswomen out there, but a large number of them work from dollar to dollar.  When possible, most of them will line up many projects, to make sure the dollars are coming in as a constant flow, but they don't usually have the time to adequately do any of those projects.  I would say the single largest lesson is not to trust your end result in someone else's hands, especially when that person's result is not tied to the overall performance of your project.  Think about it:  Most contractors will get paid by the job or the hour.  They don't care if you make a profit, or what that profit is.  If you want to ensure maximum profits, fewer problems and a result up to your required standards, you must oversee what is being done.

Heidi, looks like we connected late. The meeting just wrapped up.  We should be doing this monthly, so we’ll plan to post it next time.

 Lindsey, I sent you a text with the info.

Heidi, we are having a meet up tonight on STR properties in the greater Daytona/New Smyrna/Ormond area. Many of us are active in the STR market here and could certainly help to clear up some of the benefits of either options. Chris Miller is organizing the meeting and he runs about 17 doors in the immediate area. When you have an STR question in this area, he is the one to ask. Message if you want the meeting info.

Clayton,

A great place to start is to look for your local REIA. You can go to their page at nationalREIA.com, click on investor and search for a chapter near you. This is a great place to get with people who are local in your specific area. BP is an excellent place and resource, but keep in mind the participation here is from folks who are all over the country. Sometimes, you will get more focused information from people who are actually on ground in your area.

That is an answer you can't really put an exact number on.  The amount of liquid cash you should have available is the amount needed to properly complete the project.  Each property will be different as to what it will cost to flip.  There is also a difference between a full renovation, where you plan to get top of the market pricing, and what some others will consider a "flip".  Personally, I like to set myself apart from "flippers".  Being in RE for 8+ years, you have likely seen many homes.  You have also likely seen many "flipped" homes.  You should be able to easily tell the difference between a good project and one just thrown together.  The term "flip", as it is used today, gives buyers a bad taste in their mouth from the start.  Most Buyers first thought, when they hear the term "flip", is of poorly renovated properties where everything is just covered up to look nice, but the quality is lacking, ("lipstick on a pig").  My personal approach is to avoid that connotation, by producing the best result possible.  These two approaches will cost different amounts of money to complete, even if on the same property.  If you stay in the game for any length of time, your reputation will follow you, whether you want it to or not.  Doing your flips the right way will always pay off more in the end and down the road.  Whatever you choose, don't start a project without the funds to finish it.  This will ultimately put you in a tough spot, be more expensive and make it difficult to finish a project, if you are having to stop work to find funds.

Investment Info:

Single-family residence fix & flip investment.

Purchase price: $191,100
Cash invested: $40,500
Sale price: $305,000

Purchased property via county foreclosure auction. After settlement, property sat about 45 days before we could start. During the renovation, this property survived, without any damage, the first of two 2022 Florida hurricanes. We completed the project and after about a month on the market, we got it under contract. Property successfully sold to another investor as a rental, turning about $74k in profit. About a month or so later, the second hurricane struck and flooded entire neighborhood.

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

I often purchase foreclosures and love working with block homes as they are more desirable in Florida because of weather. This was a large footprint in a desirable neighborhood.

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

County foreclosure list. There is no negotiation, just competition bidding.

How did you finance this deal?

I used existing business funds for the entire project. No hard money or private lending.

How did you add value to the deal?

We conducted a "walls in" full renovation and small reconfiguration.

What was the outcome?

Sold in short order, right at the end of the market high, for a good profit of about $74k.

Lessons learned? Challenges?

Finding good contractors, workers, is a continuing challenge, so I continue to be more of a "hands-on" flip investor. I turn a better project and am able to generally sell my properties quicker than most because of my better quality overall.