All Forum Posts by: Justin Koehn

@Christen G. My brother-in-law is a great handyman/GC in Lacey, Wa. 

Steve James - James Contractor Services. But, it might be hard to convince him to come up to Tacoma, especially with how much work there is every where else. I'll PM you his info. 

@Robert Stevens Welcome to BP! You're in the right place to learn. My advice would be two fold. 

1. Educate yourself - There are a ton of resources here (podcasts, books, forums). Also, find another flipper in the area and figure out how you could add value to their opperation (without just asking, "How can I help you?" (http://www.jairekrobbins.com/the-best-way-to-effec...) The more you learn, the more money you can save yourself from losing. 

2. Honestly evaluate your skills and mental bent. Flipping cars takes a lot of market knowledge and car knowledge. Houses are a lot bigger, more complex, and depend on many other people and regulatory bodies. Do you like to turn wrenches and swing hammers? Or do you like the hunt for a deal, networking with people, and organizing the business? 

Many successful flippers never pick up a hammer; many do. But, you need to know what you are best suited for and really enjoy doing. Are you looking for a job? Working for yourself is still a job if you don't get paid when you stop working. Or, are you looking for passive income and wealth generation? That might point you towards rentals. 

There are lots of ways to flip houses, and be involved in real estate. If you are not 100% sure you want to do this full time, I would recommend buying a house that you can live in and slowly flipping it. This gives you a lot of experience, financing is easy, and a lot of taxes could possibly be avoided if you live in it for 2+ years. 

Hi @Raul Alvarado and welcome to BIgger Pockets. I think if we knew more about your situation, it would be a little easier to give useful advice. For instance, what do you do for work? Income? Skills? experience? Etc. 

If you only have $4k right now, most people will tell you to start saving agressively. My wife and I bought a house on a teacher's salary 5 years ago that we used as a live-in flip and profited $100k. But, we had to have enough money for the down payment, closing costs, and renovation. We put all of our tax returns and any other money we made toward it - about $26k in total. However, we looked for a long time for that deal, and I think it was the last one on the MLS in our area that has been available since then.

The very word "invest" implies that you are putting something in and expecting a return. If you don't have money to put in, do you have time? Knowledge? You have to have something. You can educate yourself here and by helping other investors until you are a point where you do have knowledge and understanding to add to a deal, even if you don't have money. I would be very hesitant to blow any money on wholesaling at this point in time. There are A LOT of people doing it, few successfully. I would save your money, read lots of books, listen to all the BP podcasts, drive for dollars, network with local investors and ask them how you can serve them (for FREE - you want to be paid in experience and information). 

You are in the right place, but there is a lot to learn. Most people around here probably got their start in some form of house hacking because it takes less money to get in with. Read up on this. Good luck!

@Taylor Dove I think your question is very interesting, personally, because I just got my license this year and am going to switch from a VERY reliable (but very low paying) job the world of real estate broker. From what I have heard and understand, @Jay Hinrichs is right on with the  numbers. If you want to survive as an agent, you had better be in the top 25% of the field of agents, as far as the quality of how you conduct your business. If you want to make good money, you had better be in the top 10% or less. With your experience marketing, you are partly there. After reading a lot of books I think real estate agency is just like many other industries, it really depends on your marketing first, and then your particular business skills second. I also agree with Jay that there are a TON of wholesalers right now, and almost no deals (at least in our NW market). At the local REI meetups, 9 out of 10 people say they are new to REI and want to get into wholesaling first and then maybe buy-and-holds. I would look for a good paying job that will let you invest in real estate. That might be acting as an agent, but wholesaling sounds way too hard right now.

I'd be curious what percentage of wholesalers have been in business for more than 10 years. There's always lots of agents (most of which don't make much money). But, that's because there's always homes to sell on the MLS, and the bar to entry is really low. That's not always the case with large numbers of distressed properties.

@Mike Robinson - glad to be of any help. I have heard that bit of wisdom repeated on more than one podcast, I think, so I can't take credit for it. 

@Tess Robinson I think it is probably a good idea to hire a lot out for several reasons. I have done most of my own work so far, but I did hire my brother-in-laws (both amazing general contractors) to help me a little bit with my last project in Roslyn, WA. What I found is this: They are WAY faster than I am. Like 3-4 times faster at most tasks. This is because they don't have to spend as much time researching and learning each little trick to make the finished product turn out well. They also have all the tools necessary. If I were to pay them $100/hour, it would be like paying myself only $25 a hour because of the speed difference. So, it becomes an issue of how much is your time worth? 

I really think it is good to learn some basic construction stuff so you can speak intelligently to contractors, but your time is much better spent finding deals, making connections that could lead to funding or partnerships, or educating yourself. I kind of subscribe to the theory that you will get paid according to what you are doing. So, if you want to swing a hammer, you'll get paid the same as someone who swings hammers for a living. If you want to paid like a business owner and investor, you should be doing the tasks and educating yourself to do this role instead.

@Mike Robinson (not sure why this tag won't work...) It's great to have some cash on hand. For me, I try to think about how easy it is to replenish that cash when deciding the level of risk I am willing to take in investing it. I will invest (haha, that is a poor use of the word here) $100 in Bitcoin without thinking too much about it - just like playing a game of poker. But the $100k that has taken me 6-7 years to come up with? I am VERY cautious to deploy because it know a big mistake with that could take me years to recoup. I am pretty cautious though. If you and Tess are making good money and able to sock away $50k or more a year, you are in a great place to aggressively invest. I am hoping to be in that place in the next few years. 

@Tess Robinson that sounds like a great strategy. I am doing the same, but only about 1 step in front of you right now. With your long commutes, would you being doing the work yourself, or hiring everything out? 

@Mike Robinson Welcome to BP! Great to hear you are already hooked on the BP podcast - unbelievable wisdom held in those. Also, look up the local meetups if you haven't already and start becoming a regular at your local REI meeting. I know there are several in the Tacoma area that are very good.

Have you made a specific list of what you are looking for? Buy-and-hold to Flips is a very wide scope. And are you looking in the Tacoma area? South sound? Or out-of-area? 

Welcome here!

@Denise Cazares as is normal, It Depends. 

Are you going to leave them as they are (illegal, secondary units)?  - Then follow @Aaron K.'s advice and don't count them. 

Are you going to do some work on the property so that they are considered legal units? Then, of course, put them into your calculations. 

What if you can't make them legal easily? Can you make them bring in rent for as non-habitable space? Can you rent them out as storage space? Office Space? ..... Try to look at every possible LEGAL option to bring in rent and what your return-on-investment will be to get that rent coming in. 

@Ian Dikhtiar I really like the BRRR strategy, and am looking for one right now. I know that you really need to have your numbers spot on for After-repair-rents, and also your after-repair-financing costs, which are a little hard to predict as interest rates are rising and it will all hing on your ARV (after-repair-value) which may change a bit depending on how long you hold it.

It sounds like you are in the same boat as most of us who live in nicer areas - the cashflow is simply not there on MOST properties unless it is hidden. In other words, you really have to take and internalize Robert Kiyosaki's advice that investors have to see value that no one else can. In other words, how do you make an asset cashflow in a non-traditional way. Here's what I mean. 

Buy an old house, rehab, rent at market rents - EVERYONE is trying to do this right now.

Buy an old duplex, rehab, rent at market rents - EVERYONE is trying to do this right now. 

Buy an old 3,4,5,6,7,8,9,.... unit, rehab, rent at market rents - EVERYONE is trying to do this right now.

Buy a trashed, BIG single family home on the edge of commercial that is zoned multi-family and turn it into a duplex or triplex - Not many folks are doing this. For good reason, it's usually hard, but that might make it worth it. This will have less competition from normal home owners and flippers because it just won't command top dollar if it's next to an apartment complex already.

Buy a single family home with an ADU (accessory dwelling unit) and rent it out for short-term rentals on AirBnB (or similar). See @Ben Leybovich 's posts on his Luxury House Hack.