All Forum Posts by: Tarl Yarber

Hey Stepfon. Welcome to Seattle! Yep, this is a very different market than Tampa. The investors here all have their areas they like to focus on. Whether its the "core" areas inside the city of seattle such as: madrona, ballard, queen anne, alki, etc. Or others that like north end, south king, Pierce, etc. All depends on what the investor is good at or focuses on. I would recommend you get involved with REAPS (local REIA here), and then the meetups that you can find online as well as here on BP. There is also the Seattle Investors Club that is good as well. You can private message me if you want more info

@Adam D.

@Jay Martinez

@Account Closed

Hey guys, first for whatever reason I didn't see this questions 11months ago when it was first posted, forgive me.  Second, thank you to all three of you for working on breaking the numbers down.

Third, when I post these, I give a general number for simplicity, and on this one I should have been more specific.  You guys made me have to pull out this file and look at the PNL and make sure I didn't mess something up :)

Purchase: 211k

Acquisition closing for me (not in original post): $1950

Rehab (exact number): $46,531

Staging: $1500

Holding costs (taxes/ins/utilities) Not in original post: $1469

Excise tax WA and settlement costs: $9990

Real estate Commissions 5%: $16500

Seller Concessions: $7000

Total project costs: $296,090

Total resale: $333,000

Total Net Profit: $36,911

Cash on cash return is calculated on our end by the out of pocket cost of purchase and rehab and normal monthly bills for the property such as utilities and such.

Profit / (Purchase + Rehab + out of pocket)= COC Roi

$36,911 / (212,950 + 48,031 + 1469) = 14.1% rounded up

Hope this helps figure the numbers out

Hi Pyrrha.  Thanks for the comment and liking the podcast.  It can get overwhelming for sure as you do this.  Its the reason I created so many systems, so that it stops the feeling of getting overwhelmed.  Its far better to take the time in the beginning to plan things out on a project, then just running straight through it and reacting to everything.  I learned not to do that by doing it lots of times.  The fact that you started giving your contractors the flooring info is a great start.  Now just do that with everything else.  Start with paint.  Then with light fixtures, plumbing fixtures, tile, etc.  You don't have to use the same one everytime, but you need to have that info now in a file so you can just share it right away.  Pick two faucets, one basic for lower end, and one nice for better houses.  Don't get too crazy about this, keep it simple and duplicable.

I showed the REIA group the top 5 mistakes investors make, then showed one house we flipped and how we overcame all five mistakes by sticking with our systems.

Agreed! Everyone should stop flipping in Seattle right now. No more Seattle, Bellevue, Tacoma, etc flips please.

However if anyone out there has any of these, send them my way.

Ha! You are the best Moderator out there Dawn!  Thanks for fixing up my post!

Hi Bevla! Sorry for late response, I have been out of the country, not trying to ignore anyone :) The number of deals we do is solely defined by the number of deals that we can find that make sense. In June we bought 10 deals out of nowhere that all came at once from many sources, and they all made sense.  In July, we bought 2, and August im on track for 3, but would totally love another 10.  We are making some changes right now in order increase the volume again since things are getting more competitive everyday.  As for a PM, I did not hire a new one yet since I had planned on my vacation Ive been on for a while now, and didn't want to train someone right before I left, I instead trained my other team members on how to manage the properties and construction while I am gone. I will hire someone when im back.  I also prefer a 15% cash on cash return for the entire project, meaning if I bought the house cash and rehab cash, the total project net is 15%. EX: $100k purchase cash, $50k rehab means total project is 150k cash so 15% of that is $22,500, so if we bought cash then we would want to hit that number in order to make it make sense. This number also allows us to finance within our comfort range as well. Its how I like to calculate risk.

Hi Sharon! Sorry for the late response, I have been out of the country.  This is a question I have been getting from people more and more. Its something we work on daily.  My best advice is to learn rehab to a point that you can know enough to look like you know what you are talking about when you meet with GC's and subs.  Most busy investor friendly contractors at this time don't want to waste time bidding houses that you don't own, or working with someone that doesn't have a clear plan, they just don't have time for it and will charge you a lot in order to make it worth their wild.  BP has a book on estimating rehab by J. Scott, I recommend that book as a great reference to learning the talk and the process.  Also, learn to make scopes, have your finishes picked out ahead of time (don't go crazy, keep it simple and saleable).  When you give a good scope of work and a list of finishes ahead of time for a GC to bid, they know youre more serious and professional.  Other than that, its a numbers game in this market and you have to keep meeting and interviewing contractors until you find the right one that works with you. Just watch the change orders...

Great question David.  I have not yet "lost" money on a flip, however I have made Zero on a flip for my end of the profits. Meaning, one house I had last year (2015) we got messed up on and the project took way longer than expected plus rehab came in over budget. I had a private investor on the deal, and in order to make sure they got their preferred return, I forfeited my end of the profits.  The house made plenty of money, just had to give it away in order to keep things happy for future deals.

Hey Ryan, sorry for the late response, I have been out of the country.  I bought the property through Heaton Dainard and I have a private money lender I used (an individual that I gave a 1st position to and paid 10% annualized to)

 Ha! Agreed! In their defense, a tile saw after midnight in a carport in a subdivision on a weeknight, would piss most people off :)

I think one of them stole our sprinkler though. Turned it on, left for 2 hrs and it was gone when we came back!