All Forum Posts by: Philip Williams

@Chris Sukala Everything I have bought in Rockford has been on the East side of town most east of Alpine. It would have been a much better find if it didn't need so much work! I would much rather have done a light rehab that took a few weeks than one that took half a year. 

@Richard Wilson Absolutely there is a ton of knowledge out there and sifting through articles and podcasts can get overwhelming at times. So if someone asks me a direct question I'm going to answer it to the best of my ability

@Kyle N. This is a great question I go to the physical auctions for a number of reasons. First I tried auction.com online to start, it was not at all a even playing field. I had to deposit 2500 per property that I wanted to bid on. Now the big players don't have to do that they can bid all they want without a deposit. So while you or I might be picking the best 4 properties they can simple put in minimum bids on them all. Second there is no guarantee anything will get sold at the online auction at a live auction the reserve is set about an hour before the auction starts sometimes a few hours. They are often overpriced and go back to the bank. If however you bid even a dollar over the reserve there are no ghost bids like there are online. Third since you physically have to go to a live auction in person there is no where near the competition. I think about 14 people were the most I have seen at a live auction in the last 30 or so I have gone to. 

I think with 100k you could invest in almost any area in the midwest very easily. If you don't have a team built on the ground you could just partner with someone who does. For example I am working on a flip now that cost 40k purchase price. The rehab will be 60k and we should sell it for about 150k, so after closing costs we should make around 35k. Even if we brought on a partner to finance the deal we would both still make around 17.5k. So that may be a route your interested in trying. Less stress for someone without much experience and you get to participate and learn in the process. 

@Bill F. They are going well thanks! Learning as we go along finding different strategies to save time and money yet still deliver a great product to the consumer. The biggest hurdle we have found is a lot of the great deals are full guts and the time it takes to do that lowers the return. Plus we have to rely a lot more on contractors for full guts as opposed to smaller ones we can handle with our crew. 

@Richard Wilson how's it going man thanks for the reply i'll do my best to answer.

1. I highly doubt NYC is the market for you, with that being said there are reasonable priced places within an hour of almost every major city. It will take a little studying but I would advise picking a secondary market not a small town. The first few flips we did were in small towns populations under 40,000 people. The reason I would advise against this there is often not enough deal flow to stay in that same town. So after we get to know the city officials the permitting process all that knowledge had to be relearned in the next small town. After doing that a few times we realized we should find a bigger town population 100,000+ where we could hopefully fine enough deals to stay in the same area. So far that strategy paid off all three I mentioned were in the same town. It also helps you get deals on materials being able to buy from the same suppliers allows you to negotiate better prices 3 roofs instead of one etc. 

2. Yes I do real estate full time I have a rental portfolio spread across 3 different llc with my brother and a couple close friends. Apartments have always been my first love and will be my retirement plan, however flipping is the gasoline I can throw on the fire to speed the process up.

3. This is probably the hardest question of them all. Slowly is how I have been in this for about 6 years or so now and I have gone through numerous realtors and contractors. I think the realtor is the least important part of your team you need to build, sorry to all the realtors out there lol. Realtors often have no idea of rehab costs so the deals they bring to me are often severely overpriced. Simply because the house is off market and priced 50k below comps means nothing when it needs 50k in work it's still essentially market value. Contractors are a little more valuable but still not the most important part, it is impossible to find a contractor or a team that is going to be at your beck and call unless you are providing them full time work. The best part of my team is my general contractor, he is a partner with me in apartments as well as flips. We can run 2 or 3 crews in different cities and he can oversee all the projects, if he needs to do work at one to catch it up that's an option. If i need him to take a day off with me to look at properties thats an option as well. He is a partner however not an employee and I think that's the key to that relationship working out so well. 

4. I have bought foreclosures and I have also bought severely distressed properties. I don't have a big enough sample size to say for sure I will only be buying foreclosures in the future but if I had to guess that's were all the evidence is pointing. Some of the reasons why are foreclosures had a mortgage at some point fairly recently. If the bank got the house appraised and it wasn't a rehab loan or something just a standard loan. The house was in fairly decent shape in say the last decade, meaning the electric is probably fine the plumbing the roof etc. As opposed to the house from the 50's no one has put a dollar into in the last 60 years. As anyone who has done flips knows the expensive parts aren't the things you can see but the things you cannot see. I have found foreclosures to be much more structurally sound than the other deals I have bought. 

I hope all this helps if you have any questions feel free to reach out anytime, I would be happy to help. 

@Andrey Les I'm not sure how it works in Ohio every state is different. In illinois they are public notice. So check your local newpapers they will list the foreclosure auction time and date. From there you can find which websites compile all the data for you. It might be more than one website but once you find it you can check what listings are up for auction daily. 

They ended up working out great once we got new tenants in at market rents lol. I had one tenant yell at me and tell me how I would never be as great of a landlord as the previous landlord. I responded your rent is 33% under market for this area why do you think he sold the building? He was a super nice guy but he wasn't making enough money to further his investing because he kept accepting sob stories from tenants like you. His rent was 400 for a 3bd 1ba market is 600. Extrapolate that across his portfolio and it's easy to see why this landlord wanted out. 

Hey Hunter welcome to bp as others have said it really should be a combination of both. If you have any contractor friends they can give you some advice on rehab costs. Most of the wholesalers I have encountered are miserably off on the rehab estimates. Like 50% off they have never flipped a house so they are just guessing in my experience. This of course turns off cash buyers we just roll our eyes once we get into the house like how in the world can this turn a profit. Also if you are going to use the nicest 3 houses in the neighborhood as comps then your rehab budget better be higher to account for that granite, bamboo floors etc. Good luck reach out if you ever need help!

@Arthur Hebda great question there are a ton of great areas in rockford. Any town with 150,000 people has a plethora of good and bad options. For starters it depends if your concentrating on flips or rentals. If your looking for apartment rentals the entire east side is more desirable, if looking for house rentals really most areas work since people all desire houses. If your looking for flips the east side has a few great areas anything east of alpine has strong neighborhoods lots of home owners and not many rentals. 

I have always wondered why the bought my 100th or 200th unit in the first 2 years is always so impressive. The average person who signs up at BP simply cannot do that! Selling a previous business or inheriting a bunch of money, then taking that getting a conventional 25% down loan on million dollars properties isn't impressive! Yet these are the posts that get tens or hundreds of comments. I think the flippers who worked up from nothing and built a business doing 50 a year are more impressive. The wholesalers who created systems and went from 1 property a year to 1 a week are the ones that impress me. Perhaps this will categorize me as a "hater" but if I inherit 500,000 don't be surprised or celebrate the fact that I will buy 100 units in the next 18 months. 

I would definitely say bad in my experience, I bought 2 duplexes and a four unit from the same owner. His old tenants absolutely loved him for all the wrong reasons. He rented all his units for 25 percent below market on average. He never charged late fees they were all his "friends" fast forward 2 years and all the units have been turned over the average rent is increased by 25% bringing everything back to market. However we didn't keep a single tenant there was no possible way to keep them after him he had essentially spoiled them.