All Forum Posts by: John Reynolds

Thanks.  It looks like it’s about the same here in Milwaukee.  It’s that way back home too.

Greetings. I’ve been following this blog and occasionally posting and decided it was time to introduce myself. I’m a stay at home dad who also builds a half dozen spec houses a year with a partner in Virginia. I have a couple of rentals there, too. I ran a successful remodeling company in Virginia for about 15 years. Three years ago, my wife was offered a great job opportunity here. She couldn’t advance her career any further where we lived, so I sold the business to a long time employee and we moved. The plan was that I was going to take care of our girls for a year while we settled in and I figured out what to do. What I quickly learned was you don’t have a lot of time to contemplate your professional future or anything else for that matter while chasing around a one and four year old. Luckily, being a parent is a lot like being a contractor. I spend a lot of time arguing, listening to crying and cleaning up messes. Anyway, while working in Virginia, I always wanted to flip houses but I never had the time to find deals. About a year ago, I found BP and started researching how to properly fix and flip houses. Now that my youngest is starting school on Tuesday, I’ve committed to start flipping.  I'd like to buy two or three houses by the end of the year.  Between my experience remodeling and building houses and what I’ve learned about flipping houses, I feel like I have a grasp on the basic concepts. What I definitely lack is local knowledge and experience. I don’t know the area or anyone in the business. My initial plan is to focus on houses for first time and working class homebuyers. I like the idea of focusing on the less expensive houses because I could rent them if the market tanks. Also, it seems like a lot of the less expensive houses here are little ranches and cape cods and they are all alike for the most part. Since they are the same, it would be easier to systematize a process that could be scaled easier than higher end custom homes. Am I wrong in my thinking? If I am, what do you recommend? If not, where should I be looking? I live on the Eastside, so I’d like to stay within 30 minutes of home. The areas in the city around Tosa look intriguing. I also like the far Northwestern parts of the city, zip codes 53223, 53224 and 53225. There seems to be a lot of activity in 53218 and 53209. I don’t have any interest in Trulia blue areas. Of course, all of my information has come from a computer screen since I’ve spent most of the time I’ve lived here in my little bubble. I’m starting to get out. I’m going to an open house tomorrow and will look at a couple of houses next week. Any advice would be appreciated. I look forward to getting out and meeting you soon.

Thanks everyone for your feedback.  It looks like it's a no lose situation as long as I'm serious about flipping houses.  Even if I know every bit of the course material (which I'm sure I don't), the facebook group and coaching are more than worth the course cost.

Thanks all.  This is great information!  Sounds like it’s a good course.  Do you have any criticisms of the program?  Does anyone out there not like it?

@Danny Johnson, thanks for your reply. I actually started researching the course after I listened to your podcast with Justin. Also, thanks for all that you do. I love your podcast. It's full of great information and keeps me excited about flipping houses. Don't worry, you'll probably get my money soon enough. I'm going to need a website and REI mobile looks great.

@Arianne L, thanks for your input too.  It's nice to get a review from someone who has actually taken the course.  Regarding the videos, do you just have access to them for a year or do you get to keep them?  Regarding the monthly coaching calls, how many people are on these calls at a time?  How does the facebook group handle dumb, newbie questions?  Are the lessons designed in a way that I could take each aspect, like a system to interact with a seller from initial phone call to follow ups, and immediately plug it into my company?

Since I'm just starting, I have a clean slate.  Instead of figuring out how to do all of the aspects of flipping as I go, it would be easier and faster just to follow someone else's system at least in the beginning until I found something that worked better for me.  Will this course give me that system?  If so, will it work with a limited marketing budget?  I'm giving myself a $6000 annual marketing budget to start out.  I can ramp this up later.  I'm just not comfortable dropping a ton of money into this only to discover after a few deals that I hate it.

With that being said, would it be better to get a couple of deals under my belt and then take the course or go ahead and start it now? I feel like I'm to the point that I need to get some experience and learn my market. When my kids start school next week, I'm going to ramp it up. I plan to make a couple of offers on MLS houses next week, reach out to my local market and hopefully connect with some wholesalers and agents, and run Craigslist ads. I'm also going to work on a target area for direct mail. I plan to send out 1000 postcards a month starting in October, or as soon as I can zero in on an area.

Has anyone recently completed the House Flipping Formula course?  I’ve been reading books(J. Scott, Anson Young, etc), listening to tons of podcasts (BP, Flipping Junkie), and reading the forum.  I feel like I have a firm grasp of the basics of marketing, deal analysis, negotiations  and renovations.  Is the course just a rehash of the basics or does it go deeper?  Does it break down everything in order to make it easy to implement quickly?  I’m really interested in learning how to systematize as much as possible.  Does this program focus on systemization or does that get covered at the next level?  Finally, is the course worth the cost?

I recommend you connect with Marcus Auerbach.  He’s been investing in Milwaukee for a long time and has a good perspective on the area and investing.

Also, in case the last line of my first post came off as snarky, I apologize. I wasn’t referring to the car.  I just meant enjoy the journey.  It’s fun.

You seem to have some good ideas.  It sounds like you are far ahead of your peers who racked up massive loans and rented luxury one bedroom apartments downtown while begging the government to bail them out.   Sorry to beat you up on the car.  Like I said, you made the best decision that you could at the time.  If you had $50,000 in student loans, then I would hack first after (I built up my emergency fund) to cut my living expenses and apply that savings to the student loans.  With $5000?  Just pay it off and be done with it forever.  

Are you in Milwaukee?  If so, I recommend you connect with 

It’s hard to say not knowing your all of your financial information and your short and long term plans.  Assuming you have no savings, but live an average lifestyle of someone fresh out of college (spend less than $25,000 annually), I would pay off the loan and put $12,000 into a high yield savings account for an emergency fund to cover six months of expenses.  With the rest, I would start saving for a down payment for a house and the costs for repairs and maintenance that homeownership incurs.  I would want to put at least 10% down and have access to another 5-10 k for repairs and upgrades that the property will need (not the emergency fund.

While house hacking would be preferable to paying rent, your rental expense isn’t all that bad.  By having roommates you are saving more than most do on rent.  Conversely, if you buy a house and have no savings, if something breaks how will you fix it?  If you lose your job, how would you pay the mortgage without roommates?

Next, or at the same time, I would save for my next car and vow to NEVER lease or buy a new car again. I would save $10k a lover the next two years and buy a reliable used Honda or Toyota and drive it for the next 10 years.  New cars are a drain on wealth building.  In your situation, you probably had little choice: you needed reliable transportation, had little money, and no credit.  At least you didn’t get an overly expensive car.

While you’re saving money, I would keep researching where you want to live and learn it so when you have your money you can jump on a deal if you see one.

Finally, if I could go back 20 years and be 24 again, I would read everything I could about financial independence.  I did most of the big stuff almost out of accident but I could have been better.  Start with Mr. money mustache for lifestyle frugality.  Read the entire blog.  Read it again.  The Bigger Pockets money podcast is also great.  A couple of great books for investing all of the money you are going to accumulate are “The Simple Path to Wealth” by J. Collins and “Set for Life” by Scott Trench.  Collins gives you a simple plan to accumulate FU money by simply working a job and investing in index funds.  He also explains the stock market along the way. Scott Trench gives you a more complex (but not that complex) plan by investing in real estate and producing other income streams.  It’s more entrepreneurial.  It also probably gets you there faster.

That’s my 2 cents worth.  Enjoy the ride.  

My partner and I have a spec house in a newer subdivision that we're trying to decide whether to sell or rent it. It hasn't sold yet and my realtor says it's because it is priced too high. He says since it is a newer, unestablished subdivision we need to sell the first few houses as cheap as we can to get traffic into the subdivision and to show future buyers that it is a desirable area. Meanwhile, my partner has built two other houses in this subdivision on his own which he planned as rentals to begin with. He rented them almost immediately and says there is demand for rentals in the area. My problem with renting is when you figure for occupancy, maintenance, management, and PITI, there's no cash flow. The only thing you are gaining is principal paydown(and maybe appreciation.) If you count the principal paydown as income then the return on investment is between 7 and 9 percent during years 1-5. My other problem with renting it is since we haven't sold any houses in the subdivision, we don't know the actual value of houses in it. For all I know, I could sit on this house for five years, tie up capital and still sell it for a loss. Am I missing something? Any thoughts out there?