All Forum Posts by: Jason Scott

I'm a wholesaler in the Kansas City market. Feel free to reach out. 

Southwest Building Products. Only thing I don't like about them is they never answer the phone.

What is up BP!!!

I just wanted to share my experience with my first official flip. Before we get into the numbers let me give you a very brief story about how I got to where I am today. I have officially named myself the dumbest real estate investor you have ever talked to because back in 2010 after years of thinking about getting involved in REI I convinced my wife that we should buy a 4 plex because it seemed like a great time to jump in. How does that make me dumb you ask? Because after buying it, rehabbing it, and holding it for 3 years I decided to take an amazing cash flowing property and sell it! Not only did I sell it but I did not continue to invest in real estate until this year. So during the greatest time to invest in real estates history this guy sat out and missed a HUGE opportunity! I bought a labor intensive business instead and now here we are in 2020 and although I've been successful in the path I chose I greatly regret not taking the time to understand what I was doing. I just had to share this first so that if I can help any first timers or people thinking about getting started PLEASE don't be afraid to reach out! I would love to save someone from missing out on the opportunity that REI provides. While working out in the AZ extreme heat I realized I had made a mistake. For the past 3 years I have become obsessed with finding my path back into real estate. Although as I type this I still own my other business I have made big strides to getting back to my true passion REI. This recent flip was my desperate attempt at taking massive action. Enough about the past lets dive into it!

     I started networking and made a connection with a "wholesaler". That's in quotes because I've learned a lot about wholesaling in the past 6 months. ( They are not all equal ). Anyway I found this property through this wholesaler whom I still have a relationship with so please don't think I'm bashing him. I met him and my contractor (friend) at the property and while other investors were viewing at the same time I was the first to sign on the line so I just bought a property! Here's a breakdown of my initial forecasted numbers for the flip...

                                                                            ESTIMATES

             * Purchase Price -              $202,313   including closing costs

             * Estimated Rehab Costs -  $31,800  according to my contractor

              * Holding Costs -                $1,000  ($500/mo for 2 months) TOTAL GUESS

              * Sales Costs -                    $14,705 Agent fees and closing costs

              * All In -                             $249,818             

* Estimated ARV - $281,500

              * Estimated Profit -            $31,682  

                                                                                   ACTUAL

            * Purchase Price -                $202,313  Including Closing Costs

            * Rehab Costs -                    $37,050

            * Holding Costs -                  $2,430   (Rehab took 5 months)

            * Sales Costs -                      $19,334  Agent Fees and Closing Costs

            * All In -                               $261,127

             * Sold For -                           $283,000

            * Profit -                               $21,873

       Some might look at these numbers and not find the very sexy. Some might say the risk was not worth the reward. Some might sit out and wait for a better time to jump in. Remember that I've been sitting and waiting for years and it's cost me a ton of both money and years of experience. PLEASE UNDERSTAND I'M NOT SUGGESTING YOU JUMP IN BLIND! I was in analysis paralysis for the past few years and have read many books, listened to hundreds of podcasts and for me the time to jump in was now. Obviously by looking at the numbers above anyone can see it didn't go perfect. I didn't hit my numbers perfectly. SO WHAT!!! I took massive action and learned a ton while still earning a profit. I will do better and I will continue to not be perfect. The point is this time I will continue!

Thank you for reading! I hope to share much more in the future!

Jason Scott

@Eric Kump I am a wholesaler in the S/E valley. I would be more than happy to help connect you with the right properties. Feel free to reach out!

Well I’ve decided to go through with the deal. There is a lot of uncertainty in the world that I have no control over. I don’t know if this home will be worth what our target price is in 2 months. I do know that I could rent it out until the price comes back. There might be an opportunity cost that I’ll have to consider if it comes along. I’m going to focus on what I can control. The big picture is there are a lot of people across the world who are being affected and are suffering from the Coronavirus. I’m great full for my health and my family. If there are any other newbies out there or even veteran investors who want to reach out feel free. Thank you for letting me share my thoughts and fears. 

Thank you Bill,

Since it’s a cash deal worst case scenario is I rent it and it cash flows since there’s no mortgage but that’s not the best use of this money I believe.

A world wide pandemic seems like a legit reason to walk but maybe you’re right. I understand what you’re saying about it could be 10k because it’s my first deal but I have been very conservative with my numbers and my contractor is a friend who flips houses for a living and he is confirming the numbers as well. Doesn’t mean we couldn’t be wrong though. 
Im not only concerned about the possibility of losing money in this deal but also the opportunity cost of tying up $250k cash during a time that could turn into the greatest time to buy since 2009.

Well I finally got over analysis paralysis and am scheduled to close tomorrow on my first deal. It’s a sfh flip with an estimated 20k profit scheduled to go on the market on May 1st. Now that the world has lost their mind over the corona virus I’m wondering if I should proceed or just give away the $500 earnest money. What would you do?

Thank you,

Jason Scott 

I’m closing on my very first deal tomorrow. It’s a flip sfh with an estimated 20k profit scheduled to go on the market may 1. I’m paying cash for everything. Yes I’m nervous. Do I give away the $500 earnest money and walk away or move forward. That’s the $20k question.

Thank you so much for sharing your experience. It’s so true that it’s about the connections you make and the mindset of just trying to find ways to help others! If you ever need an AZ connection feel free to reach out. I’m trying to take your same path of networking and adding value. Your story only motivates me to continue!