All Forum Posts by: David B.

Hi everyone! 

I just locked up a deal in Dr. Phillips that I’m going to flip. This is my first time in Orlando market and I need a reliable contractor to work with on this deal, and hopefully many more to come. 

Any suggestions would be greatly appreciated. Thanks! 

Hi all, 

I have a deal in Miami that I’m looking to add value to and either flip / refinance. 

I have a fair amount of experience at rehabs at this point, but I don’t have the contractor relationships in Miami that I do in other states. 

Does anyone have some referrals I could gather for walkthrough bids? It’s pretty heavy remodel… though not as bad as Iv done in the past. 

Would very much appreciate any guidance. Thanks! 

Hi everyone — 

Thank you for your responses. However I should have been more clear as I think there was a misunderstanding. 

I am asking what specifically — if anything — investors are making deals out of in SLC area, not generally in the US. 

I am flipping pretty heavily out of state and I buy a lot of off market deals (all value add). But I’d really be interested to hear what investors are making pencil here in Utah, as I have found it pretty hard to source anything here. Prices are high, rent is low, and there is a fair amount of competition. So curious if any other investors have found a strategy that is working for them in SLC market specifically. 

Sorry for the confusion. Thanks again. 

Hi all,

Last year I was able to flip a house, but mostly Iv been investing out of state (or house hacking) since Iv found it difficult to find deals in SLC.

However, this year I want to focus more on local deals and try to get deeper into the market. 

My main focus is flipping, but I'd be interested in BRRRR deals, or anything I can value add too. Even commercial interest ls me, as I'm starting to want to tackle bigger deals.

My experience with interest rates, rent to price, and sellers was that generally getting deals here was very difficult. But I’d be curious to know if my fellow investors have been able to find success, and if so, where?

Or perhaps you are all experiencing similar issues?

As for myself, Iv been considering trying to develop SFH here, where I could focus on multiple houses at one time. But that may be unrealistic.

Thanks for your insight. 

Henry - very sound advice. I have been adding bedrooms/ baths to the properties and it’s really helped jack up value. 

I agree that if interest rates drop we should see a push in prices. But I have a couple thoughts on this —

1. if rates stay higher for longer, or climb more, there may be some pullback in prices before it continues to climb. So maybe better to just take cash now and move into the next value add - which commercial will probably have soon. 

2. Even if it appreciates - say at 5 percent - that’s still a much lower gain than if I recycled  the whole equity pile into another value add, and brought back another 30-60% return in the same year time frame. Does that make sense? 

I agree that there’s a better way to utilize taxes, and the only reason I’m considering this is because of my own tax situation. 

But if I rush to open up cash now, and pick up some bigger value add deals in the coming years, I might double my current equity position very quickly, and then I could 1031 or hold the properties. 

Just my logic. Not sure if that’s crazy or not. Again, just flushing out some ideas. Thanks Henry. 

I love this feedback guys. Thank you. 

David - this is excellent advice. And something I’ve been wrestling with myself as I’d like the option to 1031 into bigger properties. However, because I have my tax loss from years prior, I wouldn’t pay any tax on liquidating the property. While I wouldn’t get the intrinsic tax benefit of real estate, I still wouldn’t take the 20-40 percent flip on the profits. 

My strategy had been to offload the flips fast and use the tax benefits. Then keep the BRRRR's and get lower capital gains/1031 benefits.

But again, I have so much equity now and I’d like to be prepared for opportunities down the road.  Regardless, you’re right that there’s a better way to do it if we have some patience. 

Hi all,

I just wanted to get your opinions on flipping to grow faster vs holding . 

This year I've really doubled down on investing and have about 7 rehabs I'm currently doing. Three of them are flips, while the others were going too be BRRRR'S.

But here's the thing...  I've forced so much appreciation throughout my properties that I'm inclined to just sell rather than hold as I intended. My reasons for this are -- 

1. To free up as much cash as possible for either a new round of flips or perhaps a commercial value add multi family. 

2. To sell the houses at the current peak market value. I think it's conceivable that higher rates held for longer could pull back on prices and I may as well take my return now. I'll either buy new deals in a growing market or buy properties at the bottom. 

3. I have a significant tax loss from a business investment that went sideways some years ago and I wouldn't pay any tax. Huge bonus. 

4. De Lever as much as possible during what could be an upcoming recession. A) I want to be protected from downside risk and B) I want to have cash on hand for potential opportunities. 

There is also the factor that i don't love property management. Obviously it comes with the territory, and if I had awesome A or B class units that were worth keeping (and I could pull my capital out) I think it would be worth it. 

But with where I'm at, and my current goals (which is to force equity and money as fast as possible),  I see dead equity that I could recycle for a higher return on more value add deals. So it seems to me that if I want to grow quickly, I should focus more on the flipping rather than the Brrrr's. 

FYI - In the future, as I have more equity, I would definitely hold bigger real estate deals for cash flow. But cash flow doesn't feel as necessary to me currently. 

The one thing that cuts against this idea for me is that real estate is already tax advantaged, and maybe it's silly for me to liquidate my whole portfolio in a way that eats up my tax losses when I could 1031, or even hold for a long term Capital Gains tax @ 20%. But then again, these are uncertain times and having a lot of cash and little to no debt doesn't sound so bad either. The intent would be to go out there and reload my slate with a bunch of new deals anyway. 

I'm a younger investor and still learning/ formulating my strategy. So forgive me if this is long winded... I guess I'm just talking this out loud as I play out the various scenarios hahah. But very curious on seasoned investors thoughts on this strategy, and what helped them grow their potfolios/ wealth best. 

Thank you! 

Hello Everyone! 

I have officially been investing in real estate for the last year, and in that time I went from owning one condo to now owning 5 duplexes. I am also about to close on a portfolio of three more duplexes, making my total 8. For the most part, all of these have been done by using the BRRRR method. Lastly, I am also flipping houses (4 this year)

I feel generally good about the portfolio being built -- virtually every property cashflows at least 15% COC (some much higher) and have much higher IRR'S. A couple of them only break even after the refi, but my plan is to hold until I can get a better rate (which I don't think will be hard given that I'm currently at 8.5 mostly) and then refinance all of them as a portfolio that cash flows very nicely.

The flips I am averaging about 40 - 50% returns. Which I'm thrilled about. I had a couple contractor issues early on, but things are currently getting smoother. 

As you can imagine, my workload has increased as well as my monthly payments to the bank. I have plenty of reserves for a rainy day (I'm not worried about default), but I do find myself stressed with managing the payments and also the flips as it relates to tracking expenses and reimbursements for the hard money. 

For context, I am not someone who traditionally organizes well. I'm highly ADHD, and while I'm always tracking the numbers, it's not unpredictable that I could lose something in the details. What I am is goal driven, smart, singularly focused, and a great communicator of my vision. But I could use some back up... 

I'm wondering who and what I could employ to help streamline my systems as this business grows. I have considered hiring a bookie to track all transactions as well as an admin assistant to split up the workload. In the future, I imagine taking property management in house as well. I currently have one managing the properties but i have to say... not impressed. I had to call them out on almost 4000k dollars that they had neglected to pay me over the last six months. Seems they had an "accounting" error. 

Then of course, there's the idea that I could also be sourcing deals on my own with a team that was calling on our behalf. That seems a little far fetched at the moment but the wheels are turning for the future. 

So to summarize, as I continue to Flip and Brrrr, what could I be doing to grow a team and organize this... thing... that i'm building? When would you hire someone, and in what order would you begin hiring? I can tell you that the bookie feels like the most important element to start. But I'm not sure where to get one or what that should reasonably cost. 

Honestly, even if you don't have a team but you've built something similar to this.... how did you organize everything? What sort of strategies did you employ as you grew? My greatest fear is somehow screwing something up that would stop me from paying the monthly debt service on my portfolio. This its slightly irrational, as the numbers support debt service. But still - as the number of mortgages grow so does the fear that SOMETHING could happen. I'm sure some of you can relate. 

Im a rookie so I'm sorry if this feels amateur. But would really appreciate any insight other investors have garnered as they built their portfolios. I can tell you that my goal is to own 50 residential properties. Whether it takes 5 to 10 years, that feels like a really powerful but achievable number to me. 

Thanks for reading. Best, 

DC