All Forum Posts by: Larry Turowski

Let's put some real numbers on this. And somebody correct me if I didn't do my math right (with Excel's help).

If your friend in NY bought for cash, that equates to about a 9% compounding return per year. That is, he would have done the same if he had some sort of savings account that increased 9% per year.  If he put, say, $10k down, that equates to about a 13% compounding return per year.

Let's go with 13%. That's pretty good. But, you know what? I can buy for more than 13% below market. Of course, I have to keep doing it every year. On the other hand, I don't have to have a crystal ball to know that Detroit is going to tank and NY is going to rocket decades hence.

You should get a home equity line of credit (HELOC) instead. The closing costs are usually minimal and you can use and pay interest only on what you end up taking out.

Here are the lis pendens counts for my county.  A few years ago they usually over 100 and are getting there again.

09/21: 24
10/21: 16
11/21: 25
12/21: 30
01/22: 28
02/22: 34
03/22: 36
04/22: 26
05/22: 20
06/22: 40
07/22: 44
08/22: 50
09/22: 82

@Jeremy Heaman I just finished one and am working on 3 more flips/brrrs right now. The biggest problem is getting reliable crews. The less you’ve worked with people the more you need to keep close tabs on them. And even with a good crew it seems there are always delays and unforeseen (but hopefully not unplanned for) expenses. It’s not really that hard to scale to 2, 3, 4, at a time, it just magnifies your risks. What if things go wrong on multiple projects at once. You don’t want to spread yourself so thin you can’t handle it financially or managerially. 

@JaBrie Lindsey great post. Having a good paying job and saving as much as you can is generally the best  first step to growing wealth in real estate.

It seems like every broke wanna-be investor eyes wholesaling as their road to riches, hyped up by marketing gurus selling dreams. Can you elaborate on how it was a rookie mistake for you?

I love this answer.  That is the phrase I've been looking for, "screening tool."  Calling it a rule is a misnomer.

@Shilpa Matlock as Jeff said, every property is going to look different in your pro-forma.  For instance, in a new build you capex and maintenance would be much lower. 

@Faustin Hoover Price per sqft, though it does give you some information, isn't the way to run comps (and anyway I think you mean 191, not 91). You need to look at similar houses, similar size, as cookie cutter close to your house as possible, as nearby as possible, ideally in the same neighborhood, and look at their selling prices. If you determine the the ARV is indeed around $210k, then your numbers are about right.

You are wasting far more time and gas than you are saving by removing a few addresses.  Also, if you can drive your list at all it is too small.

When someone responds to a mailing I first ask qualifying questions during a conversation with them to make sure they are motivated, namely, what they would like to get for the house.  Most sellers are going to want full market value.  And many even want a premium.  Fair enough.  But I don't want to go look at those houses I'm not going to buy.  I want to go to houses where the seller is motivated.  I explain to sellers that I send out a lot of mail.  I did not know they were interested in selling so I haven't done my research on the house.  I only do that once I know someone wants to sell and has an idea of what they want to get.

I've always done both, flipping and holding rentals, but I am skewing a little toward holds right now because I've been taking tighter deals on my flips in the hot market that has now softened a little bit.  All good.