All Forum Posts by: James Hamling

I have never, in all my years, seen even 1 of these "flipper calculators" that I'd say even touches on "ok". 

None of them correctly estimate. 

Go to Clear Estimates, this is the simplest easiest entry for anyone into CORRECT estimating. 

You need accurate scopes of work, accurate market estimates (RS Means) and a gantt chart. 

These are the 3 MUSTS. 

A few points @Nir Heifetz:

You might be right, it might be best to cut losses with this asset and move otherwise. But to know that, we need the 1 key piece of information missing from all this, which is the same key piece of missing info that got you into this in the first place. 

We need to know FUTURE projections, and the catalyst reasoning for those. 

See, it's a common failure of the novice to think you can just buy a place wherever and via waiting a few years *poof* appreciation will happen and all will be well. 

No, not the case. 

Real Estate and neighborhoods have a life cycle. And if bought into a mature area that is no longer experiencing growth, is getting a bit aged, and slipping into start of decline...... Yes I'd get out because it often takes many years into decline before redevelopment starts, takes hold, and one get's to the other side. 

I would not want to hold through the decline. 

That's why location is so key, to buy in GROWTH locations, areas either on the up-swing with years left to go OR who are so strong and established in their placement that the notion of a decline is a bit ridiculous a notion like say Beverly Hills, Hollywood Hills, these places that are a powerhouse attraction themselves. 

When buy a home in a random city/area you MUST know where in the cycle of things that micro-market is, and there is no guess work or feeling to it, it's data based. 

Currently my primary market has a new flight to the suburbs in play. Much of the old suburbs are polarized, either in various stages of decline or redevelopment, no real middle ground. And much of urban city center is solidly in decline. 

If one buys in urban city center looking back years past hoping to get that going forward, there gonna have a hell of a time. 

You have to understand your location, where it is in cycle of things, where it's going, why, and that will direct you as to what to do. 

Flat appreciation for 1st yr might be nothing, but it might be the canary in the coal mine. You are correct to ask questions and dig in to figure it out asap. 

 Not known, FOUND. 

To be known for something requires time, considerable time and/or considerable $. 

To be known for something comes from having done it a lot, put out a bunch of content on it, advertised on it a lot, things like that. 

To be FOUND for something can be done fast. 

It's about having a website, google biz page, being listed where people are looking, having things indexed and keyworded so, as is said, if/when someone looks they will find you ie being FOUND. 

Sometime people come up with a catch phrase that's readily rememberable to the "thing". 

For example you being S.Cal. maybe know of Meet Kevin? 

What a crazy simple, rememberable, easy to spell, easy to find "jingle", right. Meet Kevin. 

Which of course today he's no longer the PM and R.E. Agent/broker he once was but, that's what he heavily leveraged when he was. 

Be easy to find and they will find you. 

And the rub is you don't know/understand the laws governing this industry and agent/client relationships. 

It's VERY illegal and unethical what your hoping/seeking a buyer agent to do. The buyer agent, there broker and the brokerage would get in ton's of trouble if they were ever found of doing such. It's such a big deal that even the accusation of such is very bad. 

That is why the optics, how it makes you look by trying to ask or seek for such, is so bad. 

A big piece of what any decent buyers agent does is to read between the lines. Your trying to know the unknown, ferret out the hidden, if there is anything hidden. A good buyers agent is a paranoid person. 

So doing something like that is a MASSIVE red-flag. Which of course the "paranoid" buyers agent will assume all the more to it. 

Buyers agents are legally and license bound to work for the best interest of there buyers, full-stop. 

And fact that you want to do seller financing and not have any appraisal only amp's UP, not down, that liability and duty put on the shoulders of buyers agent. 

It's very VERY foolish when selling on terms to not allow buyers to do an appraisal. Whenever I sell on terms I always allow it AND encourage buyers to do ALL there D.D. including there own appraisal. I give them added disclosures to sign to the fact. 

You're risking a lot with all the scheming. 

Scheming = liability. 

When I was flipping FT I got asked what it was like, and best term I could find is it's the most exciting misery of stress, anxiety and frustration one will ever celebrate, lol. 

I'd be so excited up to 10 seconds after get the next deal under contract, which instantly converts into mass panic of "what did I miss, get wrong, forget". 

Then the excitement and fun of demo day, which is like getting married and divorced all in same day.... all fun and games when starts and by end of day your calling people yelling "wtf, this isn't what I signed on for, it's gonna cost how much?!".... 

Halfway through and finally see light at end of the tunnel, as you pace along in Plan E of things and you now found religion as your daily praying "oh dear lord please just let the market hold".... 

Finally done and wrapped, gritting teeth through listing, offers, getting through contingencies and it held to closing..... Like any good addict selective amnesia takes over and you forget the nightmares of past weeks/months and clap with joy...... And go start the whole bi-polar insanity over again..... Because now your freaking out because ya need the next deal under contract yesterday.... 

Yeah, your a flipper..... And probably funding a therapists kids through University. 

@Josh Otero 3 simple fundamentals. 

- Be Different

- Be Better

- Be Found

If you are Different & Better but can not be found..... 

If you are Better and can be Found, but are nothing different...... 

If you are Different and can be Found but are not any Better...... 

Be Different, Better and Found, everything else is just details of the various how's. 

With the correct foundation of this "trinity for success" it will self-build actions plans for what's next to tackle by simply asking "how" questions. 

I will start you off with a suggestion on your "Different": Remove all the BS salesy/advertising/marketing fluff. 

We are in a tech age of EMPOWERMENT and sadly MARKETING. People like feeling empowered, and I think everyone is feeling a bit exhausted of marketing & advertising. Be different, be REAL. Remove the fluff, be direct, be sincere. 

My #1 "pitch" when talking to potential clients is; "How's it going"....... 

Yup, that's it, really complex isn't it. How's it going. 

Because every L.L. will already fit into 1 of 3 buckets; either everything is going like honde kak and there gonna vent..... Everything is great and in which case they don't need or want your service.... Or they are in the middle and curious. 

But almost all appreciate the no-fluff genuine approach to just talking. 

All the fancy pant's marketing and advertising, nobody likes that BS. Now if you can add humor to it, that really connects. But lean into yourself, who you are, because end of day that's what there gonna be buying and the services is what retains or looses em. 

@Ale Ayestarán anyone who can deliver such a punishing defeat to the All Blacks has my respect, lol. 

Welcome and looking forward to what's to come. 

Quote from @Steve Balinski:

Quote from @James Hamling:

@Steve Balinski as your presenting things with no context of details such as asset class, tenant class, cap-x, appreciation etc., I have answers ready that match: 

1009 7th Avenue S, Saint Cloud, MN 56301

5bd, 2ba, 1680 sqft, Listing/Purchase Price $159,900 - Rent Range $1,830 mnth - Prop tax $1,852yr. 

1016 12th Avenue SE, Saint Cloud, MN
4bd, 2ba, 1,466sqft, Listing/purchase Price $226k - Rent Range $1,800mnth - Prop Tax $2,012yr

19 Mckinley Place N, Saint Cloud, MN

4bd, 3ba, 1,686 sqft - Listing/Purchase Price $169,900 - Rent Range $1,870 mnth - Prop Tax $3,100yr

1007 6th Street N, Saint Cloud, MN
4bd, 2ba, 1954sqft - Listing/Purchase Price $175k - Rent Range $1,910mnth - Prop Tax $1,874yr

Need I go on ?...... 

If a person is going to use tunnel-vision metrics of just looking at price sub $250k, rent's and prop tax and take 0 context otherwise..... 

Dude, how many PER-DAY do you wanna buy? Serious. 1 a day, no problem. 2 a-day, I got you! 

I can fire-hose these things...... 

 Daaaaang, those numbers don't exist near me, not even close.  Curious how you found those, do you know that area or happen to stumble upon it?  Cheapest 3/2 near me even in a low class neighborhood is 250K in good shape, or 200K with work to do (nearly a wash after upgrades are done).  $1800/month rent around me in C class neighborhoods (and most of WI) is a 250K home. Can stretch to $2000-2200 if its a fresh remodel, but the #'s still don't work.

Looking at B or C class properties, no section 8.  No Cap rate being SF.  Doesn't have to be an appreciating neighborhood as cashflow is my goal right now.  Purpose is to get out of my W2 job

Of course I know the area, it's been one of my markets for over a decade. 

How do I know/find what I do.... Because I am a FT Investment Real Estate Professional, "in-it" since '09' and in Real Estate industry professionally since '93'. 

It's like any profession really, a person who has dedicated decades of their life to mastering there craft will appear like a wizard to others of novice level experience. 

When it comes to coding for a website I am somewhere between toddler and kindergarten level of mastery, lol. 

Between my wife and I we know everything. I am the wizard of investing, real estate, business and BBQ..... She knows everything else, just ask her, lol.  

@Logan Howell I strongly disagree with @Adam Bartomeo.... I think you got LUCKY. Very very lucky. 

You're using very high leverage and very high expense ratio so if/when you flip into the red losses accelerate VERY fast. I am betting it's you don't have $ to cover those losses meaning everything implodes. 

You came within a hairs width from it all...... You disarmed the nuke with 1 second left. 

Private $ is NOT the answer. Getting a hell of a lot better on your margins IS your 1st step. 

2nd step is CONSISTENCY. 

AFTER you get your numbers into correct range, and you consistently do this, THEN you are in a place to change out expenses via replacing HM with Private $. 

Any Private $ you gotta expect them not being dumb. They will want to see track record of what you've done, and they will see exactly what I am seeing. That will project naivety, that your so green that you still don't know what you don't know. It could burn a bridge and at best it will place a negative brand you'll have to overcome in future. 

Your not appropriately considering risk into your analysis. Either you under valued rehab or over valued ARV, or just don't comprehend the margin requirements. Either way you gotta first fix your math and viability.

Because you keep going like this.... it's only a matter of time before that nuke goes off in your face. 

It is called Real Estate INVESTING. 

The simplest definition of INVESTING is: to acquire an asset or control of an asset who's value will increase/appreciate over time. 

Seeking to purchase cash-flow is seeking to purchase cash-flow. It can be called DIVIDEND investing but it is NOT "investing" in any classical sense. 

DIVIDEND investing most commonly comes with a significant factor called "NAV Erosion". 

NAV - Net Asset Value. 

Net Asset Value Erosion - The market value of the asset goes DOWN (is LESS) over time. 

Yes, NAV Erosion is VERY real and most often too all but certainty happens when attempting to DIVIDEND invest in Real Estate with a significant dividend % from day1. 

Why? Roofs wear out, furnaces wear out, appliances, flooring, paint, one and on and on. All these things have use spans. And the properties being sold with "teaser dividend %'s" comes with a sizable amount of those items soon out of use span or already past. 

That why and how the acquisition price is what it is. 

Because reality is the market set's the price for cash-flow/ROI. And market price today is NOT a 12 cap. It's more like a 4 or 5 cap.

Look, if instead we say we are talking about corvettes.... 

If everyone else is willing to buy corvettes for $100k, and everyone is selling corvettes for $100k, how realistic is it to say you want a great corvette for $50k ???? 

What kind of corvette do you think you'll get for $50k ???? 

EXACTLY.