All Forum Posts by: Gregory Childs

We're experimenting with OpenRoad3 right now. Haven't used it much yet - but I have liked the various website integration and also the Hammerpoint software for an off the cuff rehab estimate.
Downside - it's a little "template" driven, but that is to be expected - plus they are starting to offer more flexibility in a new release coming out in a couple of weeks.
So far 7/10 rating. Subsciption based pricing but a lot of bang for your buck.
TTFN,
Greg

The easist way to submit a new offer would be to set up a different LLC and make an offer that way; or just ignore your RE agent and resubmit. The bank's generally have a very short term memory and you are more than likely to end up dealing with a different contact at the bank.
As far as the local city - go talk to them. The actions of a city dept are not always based on logic, so starting a conversation is about your only option.

Mike,
Finding a new market is a "long/medium term" objective. In our case, we look at more than just the real estate statistics - we'll review demographic data (employment, net migration, income, permits, etc) and try to take a 360 degree view. The book "timing the real estate market" (Campbell) looks at a more formula based approach to evaluating when a market is ripe to invest and discusses these factors in more depth. Some of this data is available on a neighborhood/zip basis other only at the county level.
If the underlying trends in a market are poor then that will impact the DOM, etc.

As far as ARV - you can only do this by carefully examining comps. Also, make sure you account for time in your value. If the rehab is going to take three months look at what the neighborhood pricing has trended over the last two quarters and adjust your projections accordingly. Nothing wrong in investing in a market that is still trending slightly downward as long as you are adjusting your ARV accordingly.

FYI, if you are investing in regions that you do not know personally you need to final a local authority to bounce your investments off of. They don't need to be involved in your decision - just act as a sounding board; so you can be made aware of the new "garbage dump" or "drug and rehab center" that is beiing considered by the local council for approval just half a mile away! Your local team will pay dividends and the cost to keep them happy is a lot less than a bad flip.
TTFN,
Greg

So, assuming your repair costs are $18K (kitchen, gen rehab, appliances, etc). Let's say your ARV is projected at $100k. I would offer $40K. Here's why - you have to take into account holding costs, commissions, closing contributions, punch list, and $5K for unforeseen circumstances (they always come up).

Assuming you want a quick sale; you will likely net $85k from the sale (after discount, market loss during rehab, contributions, etc) - 18K (for rehab) - Commissions (buy and sell) 8K - $40k purchase - $5k for everything you didn't expect = $14k net profit. You invested $40 + 18 upfront = $58. = approx 25% return (or 32% if you don't use the $5k wiggle fund).

If they won't give it to you for $40K walk - then watch it for 3 - 6 months and keep rebidding (each time $500 - 1,000 less). At some point you'll lose it to a less savvy investor or they will come down to where it works for you.

This strategy is simple - let them come to you. I have an actual example where someone did this for 18 months and bought the home for $12K just 30 days ago. They are currently rehabbing it (it needs a lot of work). During the process three other investor offers were accepted, but none of them were able to close. Each time he offered less than previously accepted bid - final offer was $12K - whereas 18 months prior he was offering $30K on the same property. Never forget it's a game that requires patience.

Just my thoughts.
TTFN,
Greg

If you have beening flipping properties for a while - go partner with someone who you have been flipping them to. Tell them you will help them for no fee if they will teach you the "fix" side of the business.

Have them mentor you on a couple of deals and get comfortable. We did over 30 props last years with an average of 27+% return - sounds good eh? However, if you look at our books you'll see some that we made 65% and some that we DIDN'T. Get my drift.

To be fair, overall we had a great year - and the "fix" makes the flip much moire profitable. But as Jon and Dustin can attest, it doesn't come without risk.

TTFN,

Greg

Our recent experience with three props in Phoenix was not good. Especially compared to what we were able to achieve in Atlanta/Chicago.

The attached article sort of explains our dilemma

http://www.altosresearch.com/customer/Altos_Research_National_Report.pdf

We weren't as smart in our buying as we usually "think" we are - and then the market dropped 7.41% total over the last three months (while rehabbing) and the invetory rose 5.7% to add insult to injury.

So our Cinderella turned into an ugly sister! If we can get out for what we have in the properties I will be happy. If I remember correctly, that isn't real estate investing 101! Oh well.

Greg

We have found that we can get a better deal by working with a realtor (mls) vs. wholesalers. It usually takes more effort and a little more relationship to work with a realtor - but generally you get the specific product that you want.

What I find with most wholesalers is that they are pitching a deal they have available - not finding properties that the investor specifically desires. Therefore, they are often trying to put a square peg in a round hole which gets old after a while.

Maybe that is not always true - but out of the last 30+ properties we purchased none came from wholesalers.

Greg.

I am sure the possibility exists - however, I find that the team you build in an area will bring you qualified leads if you are transacting business with them. That's worth a lot more than a $50 spiff.

Relationships are key . Greg.

We have had more "appraisal" and "closing terms" issues since the credit went away - one recent example was a roof replacement required in order to close; the buyer just felt they could get away with it even though the roof showed no signs of leaks etc.

We have started to look at ways we can market our properties to attract
"conventional" buyers to avoid some of the double appraisal and other restrictive rules placed on those who dont have cash to put down. It is definately an interesting time to be an investor!
Greg

We negotiated a compromise - but it did not favor us particularly. We wanted to close the property and did not particularly want to walk away. Foretunately we had a good profit margin so we could afford to eat some of our deal.
It doesn't make it any easier. We're still a little grumpy.