All Forum Posts by: Ryan Pyle

Good luck, Mark! Be a sponge, ask lots of questions, meet as many real estate pros as you can, and learn from them. This is a wonderful business. I'm sure you will enjoy it!

That 20% includes all soft costs...interest, insurance, utilities, advertising, hard money fees, closing costs at purchase and sale, real estate commissions, homewarranty, etc. For me soft costs are always $10k - $15k.

I'm working with about $500k in capital and do 10 - 12 flips a year. I'm usually all-in for around $75k per deal, and am at about 6 months round trip.

To add some perspective, in 2008 I was at $300k in capital, did 10 flips, was all-in for $35k per deal, and was at 100 days round trip every time. On top of that, my average profit was double (almost to the penny) what it is now. Yes, kids, fliiping has gotten tough. If you do the math, my return on capital is now 1/8 of what it used to be.

I look at it from a return on capital angle. I know I have $xx of capital between my own cash, LOC's, private lenders and hard money lenders. That sum is my total investable capital. These days, my typical flip from beginning to end is 6 months (ouch, but real). So, I can turn my money twice a year. I then take the annual income I'm loooking to make, and backing in the return on capital I need from each deal.

In english, let's say between all of the above sources I have $500k available. Let's also say I want to make $200k a year flipping houses. If I can turn my average deal in 6 months, I would need to make a 20% return on each deal to make $200k/yr.

In even plainer english, if I have $80k all-in on a flip deal, I would expect to make at least $16k to keep up with my goal of $200k/yr. Likewise, If I had $150k into a deal, I would need to make $30k.

That's my baseline. With that said, I would be very nervous going into a flip with only a $16k margin. That's not a lot of room for error. My typical floor is $20k unless there is very little rehab and it's a slam dunk.

I had a tenant tell me he lost his job and was going to be late paying his rent. I looked him up on FB. His profile was not private. I found out that in fact he didn't lose his job. He was on vacation at the spring break festivities in FL. BUSTED! He has since been evicted.

Ryan, I have no doubt that everyone on this board has had bumps in their road to success. I know I have. A couple of years ago when the "easy financing" era came to an abrupt end, I announced to my family that I was going to hang up my real estate shoes and get a real job. I was very depressed. In the end I bucked up and realized that there are millions of ways to make money in real estate and I just had to find another way. So I put myself out there and started calling everyone I knew in the business. Through that, I met a guy who showed me how to flip. I was buy, fix, and refiying at the time.Things have worked out great since.

With regards to your condo, an asset is worth whatever the market will pay for it. You need to find out at what price that condo will sell for quickly. Then you need to accept that, and decide your next course of action. Will it be better to continue renting the condo, or can you take the proceeds from the sale and put them to better use. I am selling 3 rentals right now that I have about $100k into collectively. I am selling them for $50k because that's what they are currently worth and I can put that $50k to work better elsewhere. It's called sunk cost, meaning you should never consider what you paid for an aseet, only what that asset is worth to you now.

Anyway, I hope this helps. Now go to the Wynkoop and have a beer for me! I used to live in Denver and miss it alot.

Jon, I have a 15 unit building that is separately metered, however each unit only has 60 amp service. I have had it quoted around $3k per unit to upgrade to 100 amp service. I've also gotten bids on another building with the same issue and it also came out around $3k/unit. I know that's not what you are talking about, but it at least gives you something to go on.

I'd be interested. I've been full time since 2004. I have single family rentals, an apartment building and do 10 fix and flips a year.

I believe Quicken loans will go down to a 600. Why did Wells not do the loan?

I've been at the 10/yr level for a few years now. I'd love to get to 20. My problem is I can't find enough good deals to get there. I would really have to increase my risk by accepting lower margin deals. In this market I'm just not willing to do that, especially with prices continuing to fall.

BTW...once you get some experience under your belt, the money is pretty easy to find. I use a combination of my own money, lines of credit, private money and hard money.

Sherwin Williams Softer Tan throughout.