[Nov/2022-Archive | RE] BiggerPockets Podcast #1-50

BP #1 Building a Successful House Flipping Business and Losing Millions with Marty Boardman

  1. No Note Taken 

BP #2 Starting Out with Karen Rittenhouse – Subject To, Direct Mail, and Investing from a Woman’s Perspective

  1. No Note Taken 

BP #3 Getting Started in Real Estate and Raising Money with Brian Burke

  1. Seller Carryback
    1. Seller has second lien
  2. Raising Capital
    1. Overpromise
    2. Use terminology
  3. Deal Flow
    1. Get some track record
    2. Establish a fund 
      1. Raise 500k: raise money from colleagues, small to middle
  4. Grand Flip: profit 800k
    1. 54-units: REO highest & best

BP #4 Commercial Real Estate Investing With Frank Gallinelli

  1. Residential vs. Commercial
    1. Residential suggest 5+
      1. Reason: Valuation 5+ is based on income, 1-4 unit based on “comps” (harder to control)
    2. Income stream based “value add investing”
      1. Low vacancy might indicate below market rate
      2. Also lower expense
    3. Triple Net Lease
      1. Commercial Tenant would do everything themselves
        1. Also give landlord reimbursements of property tax / insurance etc.
      2. No worries about turnover
      3. Longer to re-rent
    4. How to find commercial deals
      1. Every commercial building is for sale : unlike SFH
      2. Suggest: be local
      3. Prevailing cap rate

BP #5 Dealing with Death – A Financial Discussion with CFP Neal Frankle

  1. Joint tenants
  2. Trust
  3. Probate: court decide where asset going
    1. completely public, people fight over $
  4. Want trust not will
  5. Investor go to probate attorney (family of death are screwed)
  6. Life insurance
    1. Term vs. Wholelife (wholelife is bad, term is good)
    2. How much life insurance needed: work backward from income

BP #6 Investing While Holding a Full Time Job with Arthur Garcia

  1. Loans
    1. Loan #1-4 not hard
    2. Full time job is good for loan
    3. HML expensive: ~12%
  2. Times of crisis:
    1. If purchase price + rehab < reconstruction price, great
  3. Broker vs. Direct Lender
    1. All lenders list, understand underwriting & overlay: relaxed vs. detailed
    2. Find lenders
    3. Good lender is creative 
  4. Find good GC

BP #7 Making Appraisals Work For You with Ryan Lundquist

  1. Zestimate / AVM (Automatic Valuation Model)
    1. Example: 10% diff between armslength vs. short-sale
  2. Sales Comp
    1. Define the right neighborhood
  3. Income based
    1. Gross rent multiplier
  4. Avoid bad appraiser:
    1. Find good lender with reputable appraiser
  5. Totally wrong -> Contest, write letter to argue incorrectness and provide additional data
  6. Don’t put pressure on appraiser
    1. Don’t be shady
  7. What if property low valuation
  8. Bring own comps?
    1. Suggestion: Be Proactive! Bring the comps as reference
    2. Plot graphs
  9. FHA: strict guideline

BP #8 Learning to Be a Profitable but Ethical Landlord with Al Williamson

  1. Good landlord
    1. Take care of property to not decline the property
      1. Ignore if in middle class / affluent neighborhood
      2. More important where ghettos / inner-city : owner-occupancy is low communities
    2. Landlord not slumlord
      1. Garbage pickup
      2. Influence the neighborhood by managing it carefully
    3. To be continued

BP #9 Using Hard Money Lenders to Grow Your business with Ann Bellamy

  1. When / When not to use HML
    1. Not bail out from foreclosure lol
    2. Not primary residence
  2. What she likes:
    1. Rehab loan
    2. Not commercial large loans, not rural areas
  3. Plan ahead & have exit strategy
    1. Specially 6-months loan, need two exit strategies
  4. Hml typical rates and fees
    1. CA: could 9%
    2. Northeast: 12-14%
    3. Vary by geo
    4. Depends on skin in the game too
  5. HML selecting deals, the deal has to make sense
  6. Find hard money locally, BP / REIA / talk to local people
  7. Deal first, HML second
  8. Charge points reasons
  9. Become lenders
    1. Laws – a lot of landmines
  10. Good REI Quality : persistence and keep trying

BP #10: Flipping houses 101 with J Scott

  1. First flip is bad – made 3K on the project after 3 years…
    1. Newbie gonna be conservative on the numbers
    2. Also have a lease-option
  2. Risk averse to pass some potential money-making projects
    1. Never lost money on flips yet
  3. Fixed cost vs. Rehab cost
    1. Fixed cost – buyer asking for warranty for example
  4. 70% ARV flip formula vs. J scott’s fixed cost + rehab cost formula
    1. J Scott’s formula is more precise
    2. Tax+insurance might be diff per area
  5. ARV comp – best comps are houses J Scott sold lol
    1. Initially – get RE agent and trust and treat well
    2. Realtor License – MLS to comp – Not just MLS though, total CTRL on deal
  6. Where to find deals
    1. MLS – he claims he’s an introvert, don’t want direct-to-seller marketing
    2. Now (at the time) Yellow Letters after MLS dry up 
      1. Bulk – people under water on mortgage – short sale to J Scott!??
  7. Sell deals
    1. 97% listing price sold on avg
    2. Under market a little bit, also underprice a little bit, inventory time really low
  8. Align of interest
    1. GC wants to do as much work as possible
    2. Have someone paid a percentage of profit will make them do the project “the right way”
    3. 6AM GC Rule
  9. Private Money Lender
    1. Fundraising is not rocket science, just hard work: get out there and ask
  10. Business plan before starting
  11. Fav book:
    1. Real Estate: Steve Burges : Complete guide to real estate finance for investors
      1. Number believer
    2. Business Book: 4hr work week – automating / autopiloting the business

BP #11: BiggerPockets Podcast 011 : The Ultimate Beginner’s Podcast For Real Estate Investors

  1. Niches
    1. Raw Land, 
    2. SFH, 
    3. 2-4 units, 
    4. 5-50 unit, 
    5. 50+ units, 
    6. REIT, 
    7. Mobile homes
    8. Tax liens – just tax liens? – Pennies on dollar
    9. Seller financing
  2. Operating methods
    1. Buy & Hold
    2. Flipping
    3. Wholesaling
  3. DONE

BP #12: BiggerPockets Podcast 012 : Wholesaling and Marketing with Sharon Vornholt (Probate Expert)

  1. Wholesaling is not as easy as said
  2. Started as home inspector in 1991, friended realtor and hooked into 1998 got into real-estate. Closed home inspection in 2008. 
    1. Home inspection – important to know basics of property
    2. Know how to look structural problems
  3. Wholesaling – transaction coordinator
  4. First deal of wholesaling
    1. Doing marketing – property come up
    2. Finding investor because in the arena for a while
    3. Somewhat easy
    4. Buyer finding
      1. REIA group
    5. Also Biggerpockets
    6. You don’t know who the cash buyers are
    7. Local tax assessor site – who has bought multiple properties 
    8. Always end buyer is investor
  5. Wholesaling business currently
    1. Outsourcing
    2. Networking
  6. Wholesaling process
    1. Marketing
      1. No longer bandit signs
      2. Direct mail
      3. Lead capture website
    2. Vacant property -> lockbox
    3. Longer time period (7 days are tough, usually try 30 days)
    4. Only give known people lockbox code – vetting needed
    5. Double closing rather than assignment – cleaner
      1. A->B->C, use C’s fund to close A->B. (Not in IL)
  7. Direct mail
    1. Four components: Direct mail piece, msg on piece, list, campaign
    2. Letter vs. Postcard
    3. Msg is different : absentee owner vs. probate
      1. Probate, for example, big question whether to acknowledge whether “they have a loss”
        1. She say “sorry for your loss”
        2. Interested in selling the property?
      2. Absentee – just go over their pain point
    4. Absentee owner: list-source
      1. Initially from tax list, cannot equity-filter it
    5. All about the repetition – wall calendars – want it like a clockwork
    6. Favorite lists [In Kentucky]
      1. Absentee owners 
        1. May take a while to become motivated, but they do…
        2. Especially Out of state 
      2. Probate
        1. Out of estate, very motivated
      3. Just “hit the pain point” essentially
    7. Response rate
      1. Usually 1% – 3% 
      2. Consistent mailing – nonlinear? First mailing – TMOLs 
        1. First contact – 2% response
        2. Third contact – 6% response
        3. After Five contact – 81% of deals
        4. Want to be last man standing
      3. People call with house listed
        1. Will keep you on the list – in case circumstances change – is that okay with u?
          1. 18 months house for example
  8. Wholesaler need bigger margin for profit!
  9. Walk-thru
    1. Absentee out-of-state – they give contact to look at the property
    2. Probate – a gut-retching time 
      1. Additionally there’s something else they want
    3. Just keep asking better questions – maybe lien / maybe don’t have money to close
      1. That’s hints for what’s the min offer needed
    4. Money isn’t always the motivation
      1. Sometimes like cleaning a hoarder house
  10. Learning how to “buy the property” is something no one knows in the beginning
    1. That’s why wholesaling is good for beginner – learn what’s a good deal
  11. Finding mentors for starting wholesaling
  12. New wholesaling
    1. Marketing is the first thing
  13. Best business book – the success principles
  14. Success RE Investor traits
    1. Don’t quit
      1. How to persevere? It’s about learning & having a mentor
        1. People just get frustrated and don’t think and quit
        2. Need to learn & change
    2. Lifelong learner
    3. Adapt with market (when IR is 17% lol)

BP #13 Buying Real Estate with Seller Financing and Speculating with Leon Yang

  1. Las Vegas in 2011 as start
  2. Initially MBA – 9to5, but read rich dad poor dad at 2011
    1. Condo 30-40K, house rent 1K, condo $600
  3. Why las vegas – oustripe of “zombie town” of vegas, vegas has tourist attractions
  4. First deal – find realtor who does flipping / fix-up
    1. Take a month, driving around the street find the good neighborhood
      1. 107K + 7K rehab, 1150 monthly rent
      2. SFH, 3BD2.5BA
  5. Private seller financing
    1. No limit (10 property) like bank loan
    2. Older people, multiple people, tired of landlording, just want consistent income and free & clear
  6. How to direct-to-seller, conversations
    1. First get to know them – why they’re selling what are they looking for, rapport building. Seller financing need trust – trust component!
      1. 2-3 conversations before starting about real-estate
    2. Payment & Down-payment
      1. Total amount he seems not to care as much
  7. Speculation – market rebound…
  8. Refi – not taxed income
  9. Downside of seller financing
    1. Rehab risk and Vacant risk
    2. Risk of over-leverage
    3. One on one basis loan – if you lose, you lose one not all
  10. Vegas vs. Detroit
    1. Block / Shops / How street is like
  11. Borrowing money – 
    1. Inflation Hedge
  12. Real Estate
    1. Economics
    2. People Skills / Rapport / Reputation
      1. Credibility
  13. Find balance don’t over-work
  14. Detroit example – you need to study the city / the politician
  15. Fav business book – investment Biker – Jim Rogers

BP #14 Cash Flow, Creative Finance, and Life with Ben Leybovich

  1. Big disease – neurological – auto-immune disease…
    1. Originally a violinist!! Cannot work!
  2. Types of income per IRS
    1. Earned
    2. Portfolio
      1. Equity investing – want income, don’t care equity
      2. No leverage!
    3. Passive
      1. Business – he think most business fail in first 5 years, don’t want to risk
      2. Thus real estate!
  3. Buy & Hold + Multi-family
    1. Why not flipping / wholesaling
      1. It’s really hard-work
      2. Stampede
  4. First deal – wholesaling double closing – easiest deal sold to high-paid professional friend
  5. Creative financing
    1. Get control without ownership
      1. Lease option / seller financing
      2. Lease option isn’t “stable” cashflow
    2. Preferred method : private money to buy and refi 
  6. Real estate as solving problems
    1. Problem to buy / sell / deploy money to work
  7. Grow equity to leverage it 
    1. 10-cap
    2. Got little discount when buying
    3. But can raise rent 
  8. Why he stay away from single – cannot value-add investment
  9. People business
  10. Let unit sell / rent themselves, don’t have to sell people
  11. Know your market
  12. Cashflow criteria – 100% financing and $100 a door
  13. RE book – how I turned $1000 into 5Million
  14. Another RE book recommendation – the abcs of real estate investing

BP #15 From $80k in Credit Card Debt to 100+ Deals with Glenn and Amber Schworm

  • Flipper + small amount of wholesalers, 4.5 years exp
  • Start: 80k cc debt + going thru divorce
  • First deal – 80 year old inherited trying to flip…. Plan 2 weeks -> 4 months. No flipping exp prior. -> 15K profit, almost no cash/cc credit!
  • Use mail carrier – bird dog
  • Husband – buy & sell, Wife – designer.
  • 4 / 6 first houses from mail carrier – referral
  • Sold 2nd house with 33K during 2008 crash! – have project management – daily goals
    • 18 hour days – 33 days
  • Losing money lessons – do your homework! 
    • “Quick flip” from agent
    • Too many projects – control holding costs
  • For newbie – double your timeline & budget!!
  • Flip target – 200K below and at least 2 Bed!
  • Finding good contractors – toughest, you need to interview them
    • 3 choose 2 – quality / time / budget
    • Still could screw up – hard to manage contractors
    • Contractors might get bitter if they know what you buy / sell
    • Like dating, kiss a lot of frogs to …
    • Once you find them, your business will start to be diff
  • Private investor base
    • Start – wife’s friend. 
    • Urgency / goodness – have a property, has a timeline to it
    • Put up a packet to 20-30 people husband knows
    • One of the investor is a deliveryman for Home Depot – he invested his SD-IRA
    • There’s money all around us – from a seller “what’re you gonna do with that money” – I dunno what do you have in mind. 
      • Don’t be afraid to ask – you never know
  • Bandit signs
    • People who inherited that just want out
    • Solve other people’s problems – a lady want to sell house for a $1, not really exploiting people but solving people’s problems 
  • Wholesaling
    • Lot of marketing
    • Sell the property in neighborhoods you don’t like
    • Additional monetization, kind of
    • They don’t want to be shady – they’re straight forward with people
    • Explain a little differently
    • Double closing!
    • Use C’s money to fund A->B
    • What if C backs out? Very large deposit! Never had it happen, need something that’s gonna hurt
    • Also new direct mail at the time, local investor group (REIA)
    • Disclaimer – bandit signs could be illegal in a lot of places. 
    • Very important to be yourself
    • Network with local people – super important
  • Nicety – send brownie / send card
    • Cookies – no hard feelings
  • Business growth – hiring, delegating
    • Make people feel appreciated
    • Cut cord if your gut is telling you it’s the wrong person
    • Don’t make decision out of desperation – don’t just grab the first person
    • Took the time to know people, to interview people – need to hire the right one up front! Save headaches in future. “Invest your time”
  • Think and grow Rich! – Deal with Fear of rejection 
  • The four agreements
  • What tells successful RE investors with those who aren’t – Action! Massive Action!

BP #16 Land Contracts, Creative Selling, and Finding Private Money with Clay Huber

  • Things talked in show #16 is no longer allowed because of Dodd-Frank 🙁 

BP #17 Finding Mentors, Facing Retirement, and Note Investing with Jeff Brown

  • San Diego
  • Retirement related expert
  • Started as agent – since 1977
  • Find local mentors
    • Local RE Investment Broker as mentor – who’s in business for a really long time
  • Need enough cash reserve before quitting the day job!
  • Retirement 
    • All about after-tax income
    • Real-Estate – build capital when young
      • Forget cash flow – only acquire RE
    • EIUL – tax-free income source
    • Stop contributing to 401K/IRA etc. -> shift it to EIUL
      • Rollover to solo-401K
      • Have control in 401K 
      • Company matching? Match is nothing but bait
      • Self-admin vs. self-directed IRA
    • RE in IRA 40% down, loan shorter – non-recourse IRA
    • Discounted notes
      • Notes everywhere, need DD to make sure not messed up – needle in a haystack
      • A-grade note vs. Distressed note to get house
      • Typical rates – 18% initially for author
      • 14-18% rates
      • How big are the notes
      • How long – first trustee – 30 year amortized no balloon
      • Discount combined with interest 
        • Cash of cash example? 16%, more optimistic if paid off earlier
  • Best state to invest – Texas! 
    • New jobs – more jobs in texas created in 12 months than other 49 states combined (but could it be cyclical?)
    • Austin – Venture Capitalist
  • Real estate consulting by Charles Chatham – CCIM class
  • E-myth revisited
  • Successful RE Investor – flexible and carefully selected plan

BP #18 Flipping, Marketing, and Wholesaling with Danny Johnson

  • Owner of blog FlippingJunky.com 
  • Since 2003, FT since 2006, 25-30 flipping per year
  • Initially a Software Engineer – defense contractor top secret
    • Couldn’t stand this W2 job! Miserable job
    • Inspired by his father
  • Off-market marketing!
    • Direct mail / D4D
  • First is a short-sale
    • Find a realtor that does short-sale
    • Seller backfired somehow – no longer wants to sell the house
    • Bank says why don’t you buy the note from us? – bought note for 25K
    • Bank didn’t tell Danny till says they didn’t find the actual note but need affidavit
    • Bought note for 25K, sell note for 50K
    • Note wholesaling! – no repair needed!
  • Need to get out of comfort zone, you couldn’t have planned this type of things
  • Another deal – bandit sign (locally legal for Danny)
    • You can buy permits for some locality
    • 25K into it, sold with owner financing
      • Buyer might be buying owner financing and sell the notes
  • Market : San Antonio + low end area
    • Also this is a reason why owner financing – people typically don’t get mortgage
  • Current business model
    • Buying 30-60K, rehab 5-20K, Sell 80-130K
    • Target 65% formula, instead 70% for usual flippers
    • Always negotiate
      • If you’re not embarrassed by your offer, then you just offered too much!!!
  • When you don’t have enough leads, you try to milk every leads too much (like try to get it accepted). When you have a real deal, you will know it’s a real deal.
  • Find motivated sellers instead of houses
    • House buying website
    • SEO effort
    • Direct mail – letters & postcards (postcards > letters)
    • D4D
    • Absentee owners list … Need EQ 50%+
      • OOS tend to be more motivated 
    • Need at least size 1K
    • Conversion rate
      • 2-5% convert to leads
      • Yellow letter might have higher response rate – but the “quality of leads” might not be as good
      • Other people’s 20% response rate
        • Call to some pre-recorded msg
    • Freq of Direct Mail – Try to send to the same people 3-4 per week
      • Response rate goes up as you goes further out!!
      • Sharon’s response rate study (conversion rate goes up as you mail more with the prospect)
  • Opportunity cost for rehab – hire out / delegate
  • Finding distressed property isn’t taking advantage of people
    • A lot of them aren’t owe any mortgage
    • Example – inheritance!
  • Yellow page ads – cost per lead is higher
    • Some website leads from yellow pages
  • Website questions – let website do the negotiation for you
    • Q1 : What’s the asking price?
    • Q2 : What’s the least you would take? 
      • Every person has 5-20K reduction between Q1 to Q2
    • Shorter form step-1 + longer form step-2
  • SEO ranking takes time
    • Some give up without improvement in 2 months, but need to wait for 4-5 months
  • Also PPC (Adwords / Bing)
    • Keywords : like “we buy houses”
  • FB idea
  • Monetization – owner financing instead of lease out
  • Quitting job – when starting RE still full-time jobs. Spent three years so…
    • Had to get laid off to push into full-time
  • OPM / private-lender / partnering to finance the deal
    • If you have the deal, money will find you
  • Find buyer for wholesaling deals
    • Price too high: Wishful thinking if you don’t have good deal because you have too few leads
    • Not enough buyers: certain buyer have certain things
      • Want people who can make decision quickly (instead who take 3 days and ask stupid question like how old’s the roof)
    • Access – get buyers through is hard if someone still lives in the house
      • Put lockbox on the house? Never hurts to ask
    • Too much nonrefundable EM
    • Need enough time
    • Attitude for TODO list – tendency to do it fast to mark it off the list – but not do it correct. You need to do marketing right in this case.
  • Book – flipping houses exposesd (by Danny) on Amazon
    • His business following for 34 weeks
    • Gen leads – rehab scope of work
  • Mastery by Robert Greene
  • Successful RE investor – being afraid and do it anyway

BP #19 Short Sales Tips, Starting Out in Real Estate, & Working w/ Virtual Assistants with Tracy Royce

  • Start with Get a job in RE industry
  • Target pre-foreclosures
  • VA hiring – outsourcing
  • Business credibility – video review
  • Short sales
    • Find a RE agent
    • Valuation – BPO / full appraisal
    • Contest the value if valuation isn’t in your favor
    • Want to do short-sale with someone
      • Short-sale without missed payment if imminent missing payment coming
      • I.e. medical bill
    • Short-sale damage to credit – 
      • Less than foreclosure
      • Missed payment is big hit
    • Try to convince the bank
    • Short sale – national avg 6 months
    • Better cash offer and less contingency
    • Send cover letter / explanation about the offer
  • Book : “shift : How Top Real Estate Agents Tackle Tough Times” by Gary Keller (about market shift, how agents stay sustainable / alive)
  • Think & Grow Rich, E-myth, Winning by Jack Welsh 
  • Successful RE investor – thoughtful/aware of market landscape / competitive landscape
    • Knowledgeable of data / info
    • Cautiously optimistic, take calculated risk

BP #20: 20 Deadly Mistakes For Real Estate Investors to Avoid

  • Trust but verify for PMs
  • DONE

BP #21: Market Like A Wholesaler with Jerry Puckett (it seems taken down) 

  • approximate site – https://joefairless.com/podcast/jf1407-how-to-market-like-a-wholesaler-with-jerry-puckett/
  • help clients source mail / marketing, direct-mail, 1M direct mail to more than 90 markets in 2017
  • Split test insights
    • Certain language
      • Need to be particular to the area locally – i.e. 
        • Texas (use Mustang, Y’all)
        • New Hampshire – put whole name onto the letter (Yankee) 
        • South California – most brutal – ~2017 can get 1% is lucky
          • Be Bold & Show you have deals under belt
        •  
    • Areas becoming hot
    • TMOL vs. “go-to-hell”
      • TMOL can still follow-up
      • go-to-hell can only follow-up once they are no longer the owner lol
    • Quarterly text follow-up
    • Marketing (direct-mail) messaging for 50-unit vs. SFH
      • Similar messaging
      • For MFH / MHP owners, you want to demonstrate you know what you’re talking about
    • Book seed of trust

BP #22: Building a Marketing Machine, Spec Houses, Flipping & Wholesaling with Tucker Merrihew

  1. https://podcastaddict.com/episode/77035456
  2. 50 deals (30 flips + 20~30 wholesales) per year
  3. He has to short-sale a condo, high HOA + property tax
    1. Special Assessments
    2. Wouldn’t long term hold condos, short-term flip (paint & carpet) is good
  4. Lead Funnel
    1. Direct Mail 
      1. Every Door direct mail / EDDM – oversized postcard / 14 cents each to send??
        1. To saturate the area
        2. But it’s not targeted
        3. https://www.biggerpockets.com/forums/87/topics/125686-tell-me-about-your-success-with-the-usps-every-door-direct-mail-campaign
        4. $100 for 500 pieces
      2. Messaging
        1. Shock marketing – funny marketing
    2. Online Marketing
    3. Screening System
  5. Spec House / New Construction
    1. Not a lot of hedge fund activity
    2. Architect cost : 12-33K for his case (million dollar houses)
    3. Permit process can be tricky by local bureaucracy
    4. Longer end neighborhood is much more profitable
    5. 250-300K purchase lot, 275-350K rehab, 750-1M sale, about 100K margin
    6. Last time dropped, spec building developers are ruined
    7. A+ neighborhood
    8. 6 months timeline
  6. Online SEO
    1. Match domain
  7. He’s his own GC
    1. Network with big-player for subcontractors
    2. Locally need GC license if flip more than 5 houses a year
  8. Wholesaling
    1. Co-wholesaling
    2. VIP buyers
    3. Wholesaler partner with rehabber 
      1. Follow-around ask to be teached rehab
  9. Build house 
    1. Open floor plan, Basement, garage etc.

BP #23 Flipping While Working a Job, Partnerships, and Military Investing | BP Podcast 23

  1. https://www.youtube.com/watch?v=x2tnjwjPnx8
  2. First flip
    1. Money from local community bank -5.5% interest rate with no point, much better than HML
    2. How to approach lender – they have no track record
    3. Auction is competitive
  3. Use MLS to find deal – Heavy Rehabs (foundation issues) / price reduction
    1. 10 flips so far, in retrospective could have done better by listing faster
  4. Partnership
    1. Increased borrowing power – two income when personal guarantee
    2. Two eyes on the deal

BP #24 House Flipping & Deal Analysis with Michael LaCava

  1. First deal – 2006
    1. Jumped in by partnering with friend
    2. Lost Money
  2. Multiple exit strategy to reduce risk
  3. Contractor price
    1. Plumber can get price very differently – 1.2K vs. 3K+
      1. Need to check legit

BP #25: Four Newbies and Their Very First Real Estate Success Stories

  1. #1 
    1. 203K loan – house hacking
  2. #2 
    1. Direct Mail Campaign – wholesaling – 1K fee earned 
    2. Lot of backtax
    3. Baltimore
  3. #3 – Chicago
    1. Tax Lien target – 2.5 year to redeem tax in IL 
    2. 47K tax, 10-15K work at least
    3. List stuff – list at 25K
    4. $1 EM lol
    5. Negotiate HOA fees
    6. Seller passed away, have to get all four sibling sign the paperwork
  4. #4 
    1. Mentor “Dawn” in Milwaukee

BP #26: Building a Scalable Real Estate Business and Tenant Management Tips with Chris Clothier

  1. First deal – SFH rental
  2. Managing people for rehab contractors
  3. Partnership – partner need to give new skill to the table
  4. Active in REIA
  5. Delegation
    1. Your own area of genius
    2. VA track stuff of where business should grow
    3. Build company: find someone who can build business – what’s the next steps, for example: what’s needed for a rental company (COO?)
    4. Bring in quality people and understand they may leave
    5. They’re Extremely experienced business people 
    6. Business plan is very important
    7. 100% commission based – you eat what you kill
    8. Need to have capital before hire
  6. Company’s core competency
  7. PM company – Memphis
    1. 1800 units manager in two cities 
    2. 14 full-time, ~24 1099-contractors
    3. Fill vacancy
      1. Four rental signs in the yard
    4. Competitive corporate system
    5. Rental agents – paid well
      1. Each rental agent has their own sign
      2. Top performer gets the best position of the sign lol
    6. Vacancy rate ~4%
    7. Don’t have one branded sign / VM system
    8. Four signs – Looks like scam?
    9. Other PM – angry “Hello” lol, need basic customer service
    10. Immediately disqualitier / redflag – tenant break other lease to rent with us
    11. First criteria – income & industry & job history
    12. PM company is tied to turn-key company! Important to not fail!
    13. Investor with vacant property – how to screen PM
      1. There’s good PM in every city
      2. Business experience / setup of company / number of employee / Infra & Network setup to be informed
      3. Some other PM with 1800 units and 4 staffs, mid-teens vacancy rate lol
      4. Key questions for PM
        1. Vacancy rate
        2. Avg length of stay
        3. Number of managed units
        4. How many units they rent out each year
          1. Example : 100 units, rented 50 last year, length of stay on avg 2 year
        5. Staff composition – Job descriptions
        6. Relationship with tenant? Empathy vs. couldn’t care less
          1. Don’t want people who don’t care tenants
    14. Section-8? No
    15. Tenants with pets? Want to interview the pet, LOL
    16. Eviction? example: suspect them to be a drug dealer – need authorities involved
    17. Late with rent? late fee + exact timeline of payment, also kick off the eviction court 
    18. Statistics for investing in city – jobs / type of industry (dying vs. growing industry)
    19. 20-30 year old invest in RE 
    20. What neighborhoods to focus: rent rate better than median of city (higher end)
    21. Regret not keeping every house ever owned
  8. Book: Make it big by frank [something] and REWork
  9. Successful RE Investor: who you surround yourself with + luck factor lol

BP #27 Fix and Flipping, Wholesaling, Marketing, and More with Jason and Katherine Grote

  1. Austin area
  2. Wholetail / Flip + a little buy&hold
  3. First campaign
    1. 3K direct mail cards – 5 cards no deal!!
    2. First project – pattern of thinking of start small, but beginners start too big lol
      1. 1 Year + 4 months
    3. Learning curve
    4. Put 70K in, just break even, come with lots, so earned 22K from the lots 
    5. Why first marketing failed – just bad leads
    6. Newbie’s lead marketing type – easy
      1. High equity leads
      2. Or Absentee
  4. Transition to buy&hold
  5. Slow road – don’t quit the job marketed by Gurus lol
  6. Flip houses
    1. Need buyers in the market!
    2. Otherwise you need to buy it cheap!
  7. Marketing
    1. D4D 
      1. signs: roof bad 
      2. yards overgrown etc. 
      3. dented or bad garage door
      4. Collecting junk
      5. Car park on the lawn
      6. Siding messed up
      7. Papers on the front door step
    2. 3% purchase rate!! For D4D
    3. Direct mail – marketing at msg “want to buy a house in your neighborhood”
  8. People are desparate – help people
  9. Networking
  10. Wholesaler
    1. Some are bottom feeders – those are time waster (like from MLS)
    2. True off-market deals
    3. Fear of stealing leads
    4. Need experience / team&network to find wholesale buyer
  11. How marketing
    1. Website SEO – make it 1~2 deals a month
      1. Their website – https://ibuyaustinhouses.com/
      2. Family driven, track record, reviews
    2. Tip: whatever the bandit sign say, is what the people search for
    3. Make website warm & friendly, not too much info
  12. Blogging 
    1. demonstrate track record
    2. referral
  13. Market slightly up – harder to find deals
    1. But easier to sell
  14. Flip fixing aspects 
    1. Foundation fix – cracks etc. = 5~7K usually
  15. Contractor
    1. Difficult to find lol
    2. Networking to find
  16. Seller flips
    1. House finish & Pricing
    2. Want it get under contract in first 3 weeks
    3. Austin is anormaly, usually under contract in 7 days, so just listed at comps
    4. Avg profit per flip – 30K
    5. Min profit per flip – 15K

BP #28 Note Investing and Raising Private Money with Dave Van Horn

  1. Note investing – 65% LTV, networked from REIA
    1. Initial originating notes – dictates all terms
    2. Later buy notes 
  2. note investing
    1. Buying existing note – buying private mortgage in seller financing situation
    2. Normal note vs. delinquent note
    3. Properties that has been challenging to sell
    4. They sell a mortgage, 0.6~0.7 on a dollar
    5. Buy pools of delinquent mortgages
      1. Deliquent first – 45-65 cents on a dollar
      2. deliquent second – 3~20 cents on a dollar
    6. Becomes statistical
    7. Try not to get the property from REO in note investing lol
    8. Buy it from trade-desk, which is packaged
    9. Tactic for a delinquent mortgage – bank don’t have in-person conversation with owner
      1. Also legals push forward
    10. Do some marketing campaing (direct mail / phone) to get hold of them
    11. Creative transaction (bank not allowed to do)
      1. i.e. Uncle buy to lien
      2. cash for keys etc.
    12. Senior lien is more important than equity
    13. 23 people working on it to handle thousands of mortgages
  3. 101 Version for Note investing 
  4. one First mortgage ~= eight Second mortgage
  5. Foreclosed < 10%
  6. When get second mortgage, first mortgage still there
    1. Like subject-to, paying first mortgage and make it a rental
    2. “reinstatement rights”
    3. what if under-water?
    4. Due on sale clause
  7. Rental model
    1. 1M property in hayday
    2. worth 700K 
    3. first mortgage 600K
    4. buy second 300K for 25K
    5. short sale on first, you can earn like 50K on it, impressive
  8. Raise money – OPM
    1. like commercial real estate
    2. IRA company + do charity work
    3. Teach Investing – not soliciting money
    4. Website can be dangerous in terms of solicitation
  9. Agent – professional real estate investor – unlimited loss

BP #29 Using Peer-to-Peer Lending to Finance Deals, Cash Flow, and Fix and Hold investing with Dawn Anastasi

  1. Milwaukee
  2. First deal 
    1. First Tip – don’t invest with family 
    2. Trial by fire, did the job herself
  3. Contractor test 
    1. If hard to get a quote, then work itself is going to be more challenging! 
  4. Investment type
    1. Lower end – 20~30K, need some rehab, that go thru foreclosure / short-sale
    2. How much rent? Range for Milwaukee – 700~800 for 2BD , 800-950 for 3BD, 950~1100 for 4BD
    3. 2~3% in some cases
  5. P2P lending 
    1. LendingClub & Prosper
    2. Cheaper than HML! 6-7% Interest Rate
    3. Take out 21K loan, get single family home
    4. Fully Amortized – maybe good for a flipper
  6. Book – “section-8 bible”

BP #30 Conservative Real Estate Investing and Starting Out with Kenny Estes

  1. Started investing in 18 years old
  2. South Bend
  3. LA / Chicago has bubble in pre-2008, but other cities just straight line up
  4. Rural vs. Urban
    1. Look at data – Urban areas rises faster than rural areas during 07 bubble
  5. Fund Raising
    1. Don’t promise returns
  6. How to build experience 
    1. Build conservatively – build savings 
  7. Team composition : him + his father + PM + GC
    1. PM heuristic: start making money at ~300 units
    2. Have one GC, but tried ten GCs (churned out)
      1. Good work ethics, talk investor talk, manage crews
  8. End game: form REIT and go public!
    1. Go public: 100M asset under control
    2. Public avg yield 3-5%, big premium! 
    3. Go public costly – underwriter & IB, seven figures at least
  9. Where to invest
    1. 100-250K
    2. Cap rate – avg ~8%
  10. Rent to own
  11. Distressed seller with no equity
    1. Short-sale
    2. Seller financing

BP #31 Building a Professional Wholesaling Business with Lamar Cannon

  1. Initially stock, then wholesale
  2. Door2door sales
  3. Wholesaling mistake
    1. Strategy bouncing
  4. Austin Marketing
  5. Need different types of buyers
    1. Fix & Flip – 70% rule
    2. Wholetailing
    3. Landlord
    4. Speculators lol
  6. How to find buyer
    1. Craigslist posting
    2. Meetup with people
  7. For respected buyers
    1. Lower price & Learn
  8. Good deal in bad neighborhood – find buyers
    1. Get it discounted
    2. Find buyers via “We Buy Houses” signs, call them
  9. Find sellers
    1. Marketing
      1. Start with direct mail
    2. Act fast
    3. Market Demographic
      1. Inheritance
      2. Absentee w\ Equity
      3. Etc.
    4. Comps on the fly!
      1. Zillow
      2. Redfin
    5. Don’t want to underestimate rehab cost
    6. Answering service – make it sound like calling to office
  10. Close to 10 wholesale deals so far
  11. The numbers of marketing
    1. Direct mail – 8~10% response rate!!!!!
  12. How to talk to people
    1. When competitor go straight to business, people Lamar genuinely care about people -> people like you
    2. Build relationship
    3. Lamar is really excited when calling
  13. Profit
    1. 10K each is the goal
  14. Missed the deal because show up too slow
    1. $10K learning lesson
  15. What your competition isn’t doing is doing better! 
    1. Split testing
  16. Refer short-sale to RE Agent that does short-sales
  17. Web presence – website no longer exists! 

BP #32 Luxury House Flipping, Finding Deals, and Discovering Your Niche with Will Barnard

  1. Starting around year 200
  2. First few deals – buy & hold, out-of-state, around Texas – San Antonio, stable market, growing, opportunity for cashflow
    1. Start with family as partner
    2. Partnership the right way
  3. Partner up till 2010, move to South Cali from Texas
  4. Occupants from hell story
    1. Subject-to deal
    2. Occupant challenge title, claimed to be married to seller
    3. 2.5 years ownership, not yet able to access it!! 
  5. Marketing: Yellow Letter + Postcard
  6. REO broker
  7. 70% rule for flipping may not work
    1. Under 100K house, need 65% rule or even 60% rule, because you don’t have profit!
  8. Million dollar property 
    1. Usually bigger lot size
    2. Non conforming – Harder to comp because there would be a lot of 3BD2BA in the comp 
    3. Usually go out 1~2 miles
    4. View is a huge factor – might be worth 300K with a good view
    5. Usually gutting inside + everything new – because bought usually as REO
    6. Finish super important – need to be beautiful (it’s more like a artist)
    7. Almost considered interior design course lol
    8. Seven figure spread flip 
  9. Haven’t done deal with wholesaler
  10. Legal Counsel

BP #33 How to Close 27 Deals in Your First Year While Working Full Time with Sam Craven

  1. Marketing – $4000 monthly budget -> 400 leads per month !! – around 10% conversion ratio
  2. Google adwords
    1. CPC – $8~9
  3. SEO
  4. Buyer – local networking events for partnership

BP #34 Virtual Real Estate Investing and How to Find Great Deals in a Hot Market with Anson Young

  1. Mainly wholesaling now
  2. Did a lot of crap jobs – did a lot of broker price opinion
  3. Partner for first deal
  4. Second deal – thin deal
  5. How he found deal
    1. Via MLS!
    2. Direct mail
  6. Pulling comps remotely – prefer MLS than zillow
  7. Neighborhoods, mostly blue collar neighborhoods
  8. Short sale time-machine! 
    1. Because it takes too long! Has appreciation!!
  9. Wholesale bank repo / short-sale
    1. Deed restriction – Some might have restriction (you cannot resale in 3 months)
    2. Alternate closing – land contract 
    3. Assign LLC to buyer!! Not sell the house from LLC.- only do it with people you trust (VIP list) ~3 to 5 people in VIP buyer list
  10. All the title company he looked does double closing
    1. Hold open fee – save some money
  11. How do one do BPO
  12. Don’t market/pitch bad deals
  13. Finding deals on Craigslist
    1. Quantity and follow-up is the key

BP #35 Quitting Your Job, Lifestyle Design, and Being a Traveling Landlord with Paula Pant

  1. Lifestyle thing
  2. First deal : small multiunit – house hacking
  3. Market: Atlanta
    1. Second deal – 21K, searched 8 months on MLS
    2. Interim PM while traveling for self-managing property
    3. Outsource everything for construction
  4. Creative accounting – think cost is lower because you DIY lol
  5. Save mental energy – no coupon etc.
  6. Freedom!
  7. Real Estate book – From 0 to 130 Properties in 3.5 Years
  8. Four hour workweek

BP #36 How to Be an Awesome and Profitable Landlord with Kevin Perk

  1. Multifamily deal sourcing
    1. Deal will find you if you can close?
    2. Look at MLS with certain words 
  2. Loans
    1. Commercial loans for more buildings – local bank, not BOAs
      1. Line of credit like 100K
      2. Shop around, DSCR
      3. Maybe get intro from investor
    2. Private Lender: 8~10% interest, 5 years before refi
  3. Distress property
    1. Usually beat up
  4. Memphis
  5. Buy places where people want to live – trendy restaurants etc.
  6. Wife has realtor license
  7. Slumlord
  8. Marketing
    1. Depends on demographics & market
    2. School area
    3. Screening tenant process
      1. Income, No evictions, fairly decent credit – 600+ in general, No lies
  9. Landlording
    1. If cannot rent out on difficult seasons, don’t lower tenant criteria, just lower price a bit
    2. AppFolio
    3. Target cashflow – $150 per unit per month, breakeven won’t breakeven because something’s going to break
    4. Reserve for rehab – 10% of gross
    5. Emergency fund for a property: 5-10K, i.e. roof go off
    6. Turnover kills you 
      1. Long term tenants / good condition after tenant leave

BP #37 Full Time Income, Part Time Lifestyle Real Estate Investing with Aaron Mazzrillo

  1. Financing: subject-to, a very old mortgage, almost all payments go toward principle, negotiating delayed payment.
    1. First priority / Second priority / Third priority

BP #38 Unique Strategies for Buying Real Estate with Travis Daggett

  1. Duplex – inherit tenant, self-manage (house hacking)
    1. Live next to your tenants
  2. Feels great when laid off
  3. HUD buying
  4. Long distance wholesaling
    1. Find good agent
    2. Keep good agent happy – min on front, this on back for double closing deals
  5. Court house deal
    1. Default borrower / lis pendens
    2. Blind offer – sort of – from exterior, some random squatter
    3. Only two people in Mobile bidding at court house auction lol
  6. Mobile, AL
  7. A lot of liens
    1. Preliminary title search report
  8. Title company relation – they like agent / investors
  9. Rehab 
    1. Don’t go for the GC who’s super-underbidding
    2. GC money draw setting – GC + listing agent + investor
      1. First half when initial meeting listing agent + GC
      2. Second half when listing agent taking pictures and acknowledge it’s good for listing
  10. Four hour workweek 
    1. Don’t let time be wasted by people cold-calling / emailing
  11. VA submit HUD bids!! Only spreadsheet work  
  12. Exit strategy
    1. B&H when cannot wholesale lol
    2. Short-term lease option to workaround for deed restriction
  13. Condo – won’t do anymore – a lot of HOAs
    1. Co-op even more scary per Brandon lol
    2. Need to negotiate with a lot of old folks lolol
  14. Raising private money
    1. Give a lecture
  15. Perfect deal = motivated seller, MLS closing cost break even, multiple exit strategy

BP #39 Dirt Cheap Land Flipping and Reaching Motivated Sellers with Seth Williams

  1. Data – delinquent property tax
    1. There’s issues with this – very low offers / thousands or hundreds amount
    2. 100Ks property, make 10-15K offer
      1. Easier offer – easy sale, buyer pay tax, pay closing etc., cash offer
      2. List it really cheaply 
  2. vacant land – no cashflow why?
    1. Less competitor
    2. It does cashflow
  3. Vacant land monetizing
    1. No zoning change
  4. Wholesaling – 
    1. Buyer is much smaller pool
  5. Some vacant land just take forever to sell
    1. Longest: about 6 months – make a profit
    2. When loss money – seller financing, seller stopped paying
  6. Not only michigan, texas new mexico etc.
    1. 150 for three lots, a few thousand per parcel
  7. Ask for delinquent tax
    1. A penny per parcel to 1.5dollar per parcel
  8. Marketing – he only markets once, no repetition for direct mail
    1. Because delinquent tax isn’t going to last forever
    2. Michigan – 2 years, California – 5 years
    3. Also in Michigan the dealine is March/31
    4. If you send in Jan/1 people have more desparation
    5. If wait too long, it’s a snowball which kills the tax – so there’s a sweet spot i.e. young delinquent tax lol
    6. Postcard vs. Direct-mail: he thinks
    7. Doesn’t see response rate difference between postcard vs. direct-mail (fanciness), more about target demographics and solution proposed, A/B testing – no difference
      1. Response rate, 4~5% 
  9. Angry sellers?
    1. Philosophy – Want every offer to be laughable!! <- Great
  10. About that demographics – not listed!
  11. SEO is good result, target good keywords
  12. Multiple website
    1. Buyer
    2. Seller
    3. Squeeze page (create buyers’ list)
  13. Land 
    1. Advantage:
      1. Cheap, low-maintainence
    2. Disadvantage
      1. Need due-diligence, it’s a vacant land for a reason maybe
      2. It doesn’t “PERK”, doesn’t drop water, for septic tank?
    3. Lank Banking Legend: the person who bought Manhattan
  14. Best deal:
    1. Michigan land, market value : 300-500K
    2. Offer: 4,500 dollar, 12 acres near lake Huron, a lot of land not buildable because of the lake, listed for 45K
  15. Worst deal:
    1. When starting, throw offer at anyone, bought really odd property. 
  16. Land – seller finance it to get cash flow
  17. Vacant land contaminated – environmental law – could be big liability

BP #40: 40 Quick Tips for Buying Your First (or Next) Investment Property

  1. Really hard to get rehab budget number right – important! 
    1. If double you budget and it still works, probably a deal
  2. D4D
  3. Repitition seems to be the key in direct-mail
  4. Marketing : Motivation + Equity

BP #41: How to Profit Through Long Term Flipping and Lease Options with Douglas Larson

  1. Hawaii 
  2. Lease option
  3. Cheaper houses isn’t necessarily deals
  4. Really cheap inventory gone – means market go up
    1. Really cheap means < 300K
  5. 2008~09 is really ugly, not making money
    1. Bring money to table
    2. In 2007, 13 property, 5M asset value
    3. Didn’t buy a single house in 08-09
    4. In retrospective, need 3-4 exit strategies
    5. Rent / Sell / Sell owner financed / short-term rental / self-living ~ example Spec home builder
  6. Renting things out
    1. Search term optimization
    2. Postlets
  7. After crash, made 75 offers to short-sales
  8. Online auction is tricky – phantom bidding
  9. Guru class lol
  10. Manage contractor
    1. Sub-contract might leave for 2hrs to give a bid 
    2. Give them some pizza / redbulls to get job done faster

BP #42 Building a monster Wholesaling Business with Mike Nelson

  1. How he lose $3k on first deal : Don’t pay escrow money to seller at paypal
  2. Alternative Dataset than “Absentee Owners”
    1. Eviction Records
    2. Drive for Dollars
    3. Accurint
      1. Find neighbor to find absentee owner’s phone
    4. Cash purchase from MLS
  3. Post-cards (cheap) vs. Yellow Letters
    1. “Click To Mail”
  4. Preliminary Offer vs. Final Offer (after taking a look)
  5. Wholesaler:
    1. Usually make sure “out clause exist” in contract
    2. Want at least $5k, author most made $56k on a deal
    3. go to auction to find/network-with cash buyers 
  6. Virtual Assistant:
    1. ODesk.com: worker from philippine
      1. $3 per hour

BP #43 Getting Started, Making Offers, and Crazy Properties with Shaun Reilly

  1. Boston – cambridge
  2. Condo – association’s power structure
  3. Flipping 
    1. throw 200 offers
    2. Tried to wholesale, some end buyer backed off day before closing.
    3. Tried to keep marketing it.
    4. 34K house, cheap for Massachusetts
  4. Lead source
    1. Initially MLS
    2. Direct marketing to motivated sellers – just started
  5. Re-sale with other agents
    1. What good agent do to sell a house – other than put on MLS
    2. Great energy for listing before hand
    3. Open-houses
      1. Broker open vs. open-house for retail
  6. Flipping
    1. HUD – HUD registered agent
  7. Cheapest house bought – 2K tax sale in Penn 

BP #44: Creating Systems to Flip Houses While Still Employed with Michael Woodward

  1. GC tips
  2. To sell the house – fully furnish the houses!, furnishing doesn’t mean staging

BP #45: Finding Your Unfair Advantage, Rural Investing, and Getting Started with Tom Sylvester

  • Rochester NY
  • Rural
    • Less tenant pool
    • Not good for wholesaling due to limited buyers
    • Less Contractor
    • Harder to find ARV – harder for Single Family, less comps
  • Private Money
    • Some down to 5%, up to 8~9%
  • Quit Criteria
    • passive income = 1~2x expense
  • Marketing: very little
    • tax sale / people find him from newspaper etc.

BP #46: Six Figure Profit Spec Building and Marketing for Incredible Deals with Jon Klaus

  1. Wrap-around mortgage – law changed, similar to now subject-to/lease-option
    1. Much harder to do it now
  2. Initial deals: Warzone – bad deal
  3. 08-09 big opportunity
  4. HUD houses: 20 houses, ratio of win 10% – conservative bidding
    1. Uninsurable home – not ready to be loaned 
    2. 30% ARV PP, 10% ARV rehab
  5. Appreciate in A-class area more than others. Less towards cash flow, more interested in nice areas.
  6. Marketing
    1. Yellow letter – not a lot of traction in first 6 months
    2. Not a lot of property, but high quality at deep discount
    3. Spec build – 100K per build

BP #47 Apartment Complexes, NNN Leases, and Commercial Real Estate with Joel Owens

  • Brokerage – Commercial
  • Personal lesson – fake rent – fraud
  • A-location 
    • Future dev, good school etc.
  • Commercial
    • CoStar – office
    • LoopNet – Apartments
    • Highest & best use – max $, timeframe reasonable
  • Triple Net
    • More passive
    • Single tenant 
      • Pharmacy has shelf-life of hundred years, while restaurants 30-40 years (like lobstar chain)
    • Multi-tenant (bigger cap) – strip center
    • LoopNet – you only see a fraction of listing
    • Off-market deals
  • Tenant levels
    • 1. Franchise
    • 2. 50 stores
    • 3. 1K locations
    • 4. Guarantee from parent company
  • When taking new multi-family Apartment Building – need to vet the quality of lease contract

BP #48: Duplex Investing, Finding Great Properties, and Tips for Managing Tenants with Darren Sager

  • Buy & Hold
  • 1% as foundation
  • Investor agent
  • Become flipper – house-hacking, 2 year+
  • location – near NYC in NJ, train station near is good
  • 3 Bed+, more family oriented, lower turnover
  • Rehab make it abuse-proof
  • Strong lease (40 pages)
    • Clause for screening – don’t pay util/sewer
    • Tenant , call util company instead of landlord if outage
    • Make tenant understand responsibility
  • MLS
  • Rehab
    • Read books to know more about what constructors are talking about
    • Learning from Ytb – how to jack up house (“Unfair advantage”)
    • Contractor pricing – Newbie vs. Investor (volume) – hourly price make it cheaper
    • Investor agent – group newbie together to reduce hourly rate
  • Financing
    • Portfolio lender for refi
    • Just MLS for find tenant (NJ)
    • Seasonality of renting out
  • Newbie don’t do “low income (super cheap) housing”
  • Tenant flow stability – big market is better than rural (more tenants)

BP #49: Real Estate Tax Tips, Jokes, and Loopholes With Amanda Han

  • Syndication – team most important
  • Entity
    • Self employment tax – active i.e. wholesaling
      • C/S-corp better to avoid this self-employment tax
    • Real-estate professional status
      • Most of time real-estate
  • Tax mistake
    • not claiming legit deduction
    • No depreciation in schedule-E -> fire the CPA
  • SDIRA
    • 5.5K max contrib
    • More advanced account more contrib
  • House on ranch – 1031? Yes
  • Home-office deduction
  • HSA – self-directed
    • Wholesaler can use HSA as EM to do wholesaling tax-free!!
  • Audit – can use someone to represent you as buffer-point (i.e. CPA) 

BP #50 : Getting Started and No Money Down House Flipping with Mike Simmons

  • Start
    • Age 30 corp worker, initially look at stocks
    • Paralysis analysis for 4-5 years
  • First deal 2007
    • Bank out of business, lost EM
    • But bought house half price nearby two weeks later
    • Rehab
      • Over-rehab
      • Look at open-house nearby to know what level of interior
      • Contractor – bad craigslist no-show
        • Should have make all contractor in one hour
      • GC doesn’t pay sub! 
        • Should use “release of lien” as protection
      • Hold too long
      • Realtor – priced too high – sit four months
      • Michigan PP40K R15K S85K
  • Detroit – people get unsuspicious investors to buy in Detroit
    • 5K house is bad, need to watch its night mode 
    • Rehab need watch
    • break-in : have to evict them which takes 90 days
    • Currently improving and suburb good
  • Marketing
    • MLS – need to act fast
    • Birddog
  • Structure & PML
    • Talk to REIA – brag what you do and money will come
    • 50/50 mostly, some interest based
    • In LLC
    • 6-months, no-money from rehabber, investor can foreclose if not returned in 6 months, investor want to be safe
    • Aggressive rehab management
    • No-money/payment during rehab
  • Mentor : avoid the pitfalls
  • Mindset: competition vs. dealflow
  • End-game : Buy&hold
  • Bad contractor – mechanics – lien
    • Release of lien
  • Like Predictable ARV – cookie cutter
    • Densely populated, lots of similar houses nearby
  • Donald Trump – one of the greatest self-promoters
  • Millionaire next door
  • Wealth attraction for entrepreneurs

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