All Forum Posts by: Matthew Parrott

I just saw this thread, and haven't heard of people talking about c class properties or b class properties, and wasn't exactly sure how to search for that information. Can someone give me an overview on how properties are classed?

Thanks guys!

@Gary Alford Let me tell you how I have always done it. I started off working in a comission enviorement prior to becoming self employed. That taught me a little about working with an adjustable income. So, what I did, was try my hardest to live off of my salary, and pay off debt or invest with my commission. This way our lifestyle didn't adjust up or down all the time depending on my commission amount per month. When I became self employed, I looked at it the same way. 

At first I was became self employed I was literally living off of all of my profits to survive. However, within about 6 months I had begun to make more money than what was required to live. At that point I started re-investing 100% of all the profit I didn't absolutely need to live. After about a year, I had stashed up enough cash in the bank, and built a big enough business that I started to want to live on a predictable income again. So, I started paying myself a salary due on the 15th and 30th of every month. Now that salary was probably less than half of my profits, and I took the absolute least amount I could, so that I could continue to re-invest as much $$$ into my business as possible. In 3 years I was able to create a business that paid for my peanuts salary, but also bought 2 very cheap rental properties with my profits. 

I was trying to re-invest everything back into the business, but I had 20k sitting in an account and thought, let's put that to better use, property. Then I did it again, and bought property 2. But the point is, I live on a minimal salary, and put everything else to work somewhere. Now there are tons a people on here smarter than I am about whether that should be an s-corp, c-corp, LLC, etc, etc. But I think what you where asking was how to live while being self employed in real estate, and that's what I tried to answer. I didn't live on percentages or profits, or anything else. I paid myself about $2500 a month (and I have 5 kids, if I can do it you can to), and re-invested 100% of everything else. Once in a while I would need a little more, and I would take it, but a dollar spent on salary is 2 dollars or more that you could have gotten back had it been invested. If you start asking yourself would I like 1 dollar today or 5 in 5 years, or 100 dollars today or 500 in 5 years, or an extra 10k this year, or an extra 100k in 5 years, you will probably say that today you are good, you don't need the extra. That's what you are giving up when you spend your profits on things that don't matter, when it could have been re-invested, 1, 5, 10, 100 times over in the next week, year, 5 years, etc. That's my advice. Good luck!

I currently own 3 properties (2 paid for, 1 not, all sfh), that I have purchased in the past. But now I want to start investing in real estate full time. My history is in cell phones, 5 years in retail (including management) and about 5 years being self employed buying and selling. In roughly two and a half years of doing that full time, I had nearly $250k is sales starting from nothing in my hand, and nothing in the bank. Basically my business included creating a reputation in the area, and getting out tons of Craigslist ads, that I Buy / Sell / Trade cell phones.

Towards the end, roughly 50-60% of my business was from repeat customers or referrals. I spent hardly any time looking for deals, and instead people were hunting me down to buy their phones. Primarily my profits came from buying phones right, when you buy them at 40% of value, a lot of things can go wrong, and you can still make money. I very rarely gave offers, instead I started by asking them how much they wanted, if that was their best price, and then offered slightly below that. I was never afraid to walk away from offers, because I wasn't interested in the phone, I was only interested in how much it cost, and how much I could sell it for. Towards the end I also bought tons of phones with specific issues for parts, repairs, or because I could solve their problems.

What I would like to do is to apply all of those same lessons and processes that I learned in buying and selling cell phones, to real estate. I knew a long time ago, that I needed to move up a '0' to the end of my purchases and sales prices, I thought the next move might be cars, but I don't know cars like I do phones, and I don't have connections in the automotive industry either. I can't make predictable purchases without some of these things. The next step up from that in my mind, was houses, we simply add another '0' (or two) to the end of the purchase and sales prices again. But I don't really have connections or a lot of experience the real estate industry either.

The problem I see at this point is two fold: 1. I don't have a job, I have been self employed for 3.5 years, with the last 6 months being a total collapse of the cell phone market and my business in this area. So, that leaves me with a cash flow problem. 2. I don't have a lot of capital to work with. If push comes to shove I can maybe come up with 10-20k, but that doesn't solve my cash flow problem. The way I see it, I need to be able to create immediate income (like a lump sum from a rehab or something) and work towards passive income to get me truly full time. I don't have any real rehab skills myself, I am an able bodied guy, and can learn, but I have no real skills at this time.

After Thanksgiving I am looking for the quickest way possible to put 5k in my hands to breath for 2 months, followed by 10k, 20k, and then focus on regular passive income and continual flips. That's where I am, am I crazy for thinking that I use all the same strategies I used in flipping cell phones, to flip houses? What tips would you give me? I am confident on the sales side, as well as marketing and eventually building up leads. Where I lack confidence is finding the deals initially so I can eat. BTW, I have 5 kids so that's kinda important, lol.

Hello, I just found biggerpockets last night, so I thought I would introduce myself. I have done 10 deals since 2004 or so, I currently own 3 properties, 2 paid for cheap single family homes, and my former home, which I still have a mortgage on. In a typical month I am suppose to collect about $1650 in rents, but after all my expenses it's probably closer to $1k, but I don't know how often I have a typical month, especially lately with multiple tenants moving out, a roof repair, and a water heater in the last 3 months :( 

I found this site after doing more research on creative real estate, and specifically because I want to go full time into it. My history is in cell phones, 5 years in retail (including management) and about 5 years being self employed buying and selling. In roughly two and a half years of doing that full time, I had nearly $250k is sales starting from nothing in my hand, and nothing in the bank. Basically my business included creating a reputation in the area, and getting out tons of Craigslist ads, that I Buy / Sell / Trade cell phones. 

Towards the end, roughly 50-60% of my business was from repeat customers or referrals. I spent hardly any time looking for deals, and instead people were hunting me down to buy their phones. Primarily my profits came from buying phones right, when you buy them at 40% of value, a lot of things can go wrong, and you can still make money. I very rarely gave offers, instead I started by asking them how much they wanted, if that was their best price, and then offered slightly below that. I was never afraid to walk away from offers, because I wasn't interested in the phone, I was only interested in how much it cost, and how much I could sell it for (I never once cared how much someone paid for something, that's irrelevant, they are probably lying anyways). I didn't get out of bed if I couldn't make $100 off each deal, unless it was just really convenient for me to take another deal that I would make $50-75 off of, or I was helping a friend, or needed a variety of inventory. I needed to sell 35 phones a month to make my salary, and I typically did closer to 50 deals and one month almost 75 phones. Towards the end I also bought tons of phones with specific issues for parts, repairs, or because I could solve their problems, and because of that, I dominated the market for a while, at one point I had 65% of all the phones for sale online in my market.

What I would like to do is to apply all of those same lessons that I learned in buying and selling cell phones, to real estate. I knew a long time ago, that I needed to move up a '0' to the end of my purchases and sales, I thought the next move might be cars, but I don't know cars like I do phones, and I don't have connections in the automotive industry either. I can't make predictable purchases without some of these things. The next step up from that in my mind, was houses, we simply add another '0' (or two) to the end of the purchase and sales price. But I don't really have connections or a lot of experience the real estate industry either.

The problem I see at this point is two fold: 1. I don't have a job, I have been self employed for 3.5 years, with the last 6 months being a total collapse of the cell phone market and my business in this area. So, that leaves me with a cash flow problem. 2. I don't have a lot of capital to work with. If push comes to shove I can maybe come up with 10k, but that doesn't solve my cash flow problem. The way I see it, I need to be able to create immediate income (like a lump sum from a rehab or something) and work towards passive income to get me truly full time. I don't have any real rehab skills myself, I am an able bodied guy, and can learn, but I have no real skills at this time.

Come December (after the holidays) I am looking for the quickest way possible to put 5k in my hands to breath for 2 months, followed by 10k, 20k, and then focus on regular passive income and continual flips. That's where I am, maybe you can give me hints on how to get there, or what you have done! :)