All Forum Posts by: Russell Holmes

@Amra Mujakic I used real estate express myself. It took me about two months to do the coursework in my spare time and then I went through about 1200 practice questions just to be sure. It wasn't the most exciting thing in the world. But it got the job done!

@Robert J. Silva I'm with exp and love it....for me in my specific circumstances. I'm hustling hard to leave a service business I started over a decade ago. Between the two I'm "working" in one form or another 70+ hours a week with each day a mixture of both. Likely about 50/50 time commitment now and I'm ready to quit the service business yesterday. A normal brokerage would not have worked for me due to my schedule constraints. I have time, just not specifically when requested to be in morning training. I knew I wanted training that a transactional brokerage doesn't offer. If you're licensed solely for investment, a transaction broker would be the most cost effective. Exp has a low cap ($16000) before their 20% split ends and they've launched an improved mentorship program that you pay for out of the first three commissions, not out of pocket ahead of time. The old setup was 10% of the first 5 closings while the new is 20% of the first three. Either way, you'll get an absurd amount of training before you ever close a deal and "pay" so the logistics of it isn't as important as the concept to me. Mentorship is in person while there are 30+ hours per week of training to attend on the cloud campus or watch afterwards. My personal mentor is a broker associate who had 25+ years experience as an independent broker in a luxury market before joining exp. Her training is from a life of experience in the industry, not fed from corporate or anything. As I said, it works perfect for me. However, if you have an open schedule and prefer an office environment, one of the brick and mortar brokerages may be better suited to you. I know some say to hyper analyze the fees, but lower fees was not my main priority. If you feel more comfortable with one of the other brokers, that is more important than 10% one way or the other. Once you pop your head up from the hustle in a year or 18 months with some momentum, you can take a look at the fee structure again and compare, knowing what it has cost you. Honestly getting leads and building momentum has very little to do with what broker you choose.

I'll be 'there' at 8:00am sharp waiting on everyone.....

Just kidding, didn't hear back by the night before so we'll shoot for another day soon.  Definitely looking forward to somewhat of a Lake County mastermind breakfast/lunch at some point whenever schedules work out.  Anyone feel free to throw out other dates that may work.  

@Jay Patel @Brandon Reed @Lane Register anyone still up for meeting up this Saturday?  There's another investor, Mike, that I know from BP who's in Mt. Dora, but it won't let me tag him here for some reason.    If we're on to meet, I'll check with him to see if he can make it too.  If everyone's got plans or other obligations, we can pick another date in the future to try for.  I'd love to get to meet with everyone and learn from everyone's collective experience.  I'm available if others are, but I'm also flexible and can shoot for another time.  Whatever works!

@Richard Wilson I would also recommend looking at what is available within an hour or so of you. Prices where you live may be high, but there is likely a cheaper market within an hour or two. Find a good investor friendly realtor there to help you analyze deals. Their analysis of the after repair value and desirability of the area will be invaluable if you don't live there. If you do your first flip at a distance you have to fly to, it makes it very difficult to manage. In my local market, similar 3/2 houses 2 miles apart can be the difference between a quick sale at $180k and a $110k sale that takes a few months and several price reductions to close. I know the area and difference in value, but from out of state it would be hard to tell for sure.

And I realize your holding costs are the opportunity costs of lost gains in current securities, but if you compared to risk withhard money borrowed funds, you are in much better shape!

@Richard Wilson I agree with others to hang on to your capital while you educate. Bigger Pockets is a gold mine. The key to "safe flipping" if there is such a thing, is to have the quick sale not be your ONLY exit, even if the preferred one. Make sure you could rent it a year or three at a positive cash flow. Maybe run numbers to see if it would be a good BRRRR property to refi your capital back out (if you're not familiar with BRRRR search the forums and blogs,it's a great method for redeploying capital without a sale). If you know you're ok to hold it, there's not as much risk. Also, many flips are funded by hard money loans with 10-12% interest and 12 month terms. 12% means every month it sits, the money costs 1% which can quickly kill profit. A hard money funded flip is tighter timing and tighter margins. With cash, your holding costs are MUCH lower so a delay isn't as costly. Most flippers aim for purchase rehab and holding to come in at 70% of ARV. You're going in with cash so your holding cost is much lower and you're just aiming for 10-15% profit on $200k. I think that is very reasonable with proper analysis. However, educate yourself at least enough to know the concepts before deploying your money. If you do partner, spend a bit of money on a real estate attorney as you want a good legally binding agreement. Many people can sound really experienced and give you a firm handshake for your capital.... distrust anyone who wants your money and doesn't have a fully analyzed deal they are searching to fund. I have knowledge and lack the funds but if I were local wouldn't be asking you for it unless I saw a way you'd be able to benefit more than me by deploying it. Vice versa sends up red flags when you (the money guy) are solicited for funding a "no money" guy. Better would be if you sought a partner to bring the skill to a deal you help find. Utilize the BP calculators and find a reputable general contractor who has done several flips. May cost you $100 to have him walk a potential property to quote rehab, but you'll get over $100 worth of knowledge looking at the estimate, even if it makes the property a bad deal. Take your time and 10-15% profits in 4-month flips should be doable.

@Luz Pagan also, if you're lucky enough to have several comps to choose from, you can often see a pretty distinct value to rehabbed vs not. You'll see several non rehabbed comps at $110-112/sqft and then several rehabbed at $130-132/sqft. Not all areas are that easy, but sometimes the value of rehab shows itself in $/sqft. When it doesn't it's best to only use comps of the same condition.

@Luz Pagan you're welcome. And rereading my post I wasn't really clear on how I adjust for sqft. Ideally you want to pull comps of the same 3 bedroom and 2 bathroom as your house, sold in the last 6 months within a mile and similar areas. Further filter those to the ones built within a decade of yours and within 20% of the sqft. You can stretch those two a bit to get more comps. From that point all comps are very similar to the same type home. A house that has 200 sqft more than yours but still only 3 bedrooms, 2 baths, kitchen, living room, etc isn't worth the full sold $/sqft for it's extra space. Locations may be different so don't use my exact numbers as absolute, but it seems to work well to say the extra or lack of space with same rooms is worth 25% of the $/sqft. In other words, say rehabbed comp houses sell at $100/sqft and yours is 150 sq ft bigger. Some will say that is worth $15000 (100 x 150) extra. In reality it means your living room is 6" wider than theirs, no extra rooms no extra fixtures....is that really worth $15,000 in the market? Not likely. Using 25% shows a $3750 adjustment ((100/4) x 150) which is likely very close to accurate. This only works on homes that are otherwise comparable. Further adjustments for actual differences like an extra bath or garage would be market specific and would be in addition to pure sqft comps. The most reliable comps are where they all are identical in bed/bath/garage and within that 20% of size.

It is also important to know local areas. Sometimes a 1 mile radius pulls houses from a much more or less desirable area. We have some toll roads that split up town a bit. One side of the toll road is near a new hospital with $170-190k 1000sqft 3/2 rehabbed houses. Within a stone's throw across the toll road, that same house will be $110-120k and take forever to sell. You can see the hospital but it takes a 10 min drive through the hood and around access roads to get there. A perfectly round radius without any local knowledge can skew an accurate CMA greatly.