You want to know how to flip a house? I love to see flippers taking time to actually think through both the process and design of a house! Unfortunately, most flippers just throw some beige paint on the walls then call it a flip. I’m a strong believer and living proof that in order to be a successful flipping business, one must always consider custom ideas and branding. Once you learn how to flip a house, the sky’s the limit! What I am about to share with you comes from my decade-long experience in high-volume flipping. I’m a full-time real estate investor. I do not do this part-time or as a side-hobby. I’ve given 100% of my energy and efforts to real estate investing for the last 10 years. I have completed well over 300 flips in my career – 100 of those just in the last 18 months. The ARV’s for my investments range from $100k to over $2million. As I type this, I currently have 16 different flips in 3 different states ranging from $150k to $1million. Why do I tell you this? It’s not to brag. Far from it. I say this only so that readers understand that my advice comes from real world experience, not something I’ve read or heard. Real estate investing is my life, every day, 24-7. Hopefully, you’re able to sift through faulty advice from many who love to merely pontificate as to how good they are or how much they know! I love to share my extensive knowledge to other investors. Most flippers paint the exterior beige with bright white trim. That’s your most common exterior, unfortunately. Then you step inside and see the real magic. (insert sarcasm!) The investor decided to get “wild” with the interior paint color – they went with beige walls and bright white trim! Groundbreaking, I know! Then to really mix it up and throw you a curveball, they go with a sexy beige tile in the bathrooms and some ritzy beige carpet in the bedrooms! (inset even greater amount of sarcasm!) In reality, they have spent no time, thought, or effort into what their potential CUSTOMER WANTS! They choose that simple, boring design because it’s inexpensive and easy to accomplish. Obviously, this can be quite annoying to more experienced, custom flippers! In order to be a successful flipper, one must get inside the mind of your potential buyer. Meaning – do you think that your potential buyers watch TLC or HGTV or DIY? Of course they do, and they see what those custom designers put inside of those flips. They decide mentally that this is what THEY want in THEIR next house. (or a concept like it) Instead, flippers provide them BEIGE! Understand that many years ago, this beige concept was good, but over time, styles change, markets change, and the things...
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As I travel across the country educating investors on flipping houses and how to make money in real estate. I am often asked “What is the one thing that separates the successful investor from the struggling investor?”. There are several things that I believe separates successful investors and struggling investors. The first thing that comes to mind when flipping houses is strategy versus tactics. I tell my students that one must understand their strategy before they initiate their tactics. In today’s modern digital age, many young or inexperienced entrepreneurs see a cable show, read a blog article, or even attend one of those real estate “guru” events and get the “itch” to give real estate investing a try. At the “guru” seminar, they’ll hear some slick shark salesman give them a preview of some new, hidden, secret tactic in real estate that will make them a million dollars overnight. It could be buy/fix/sell, lease options, notes, short sales, or multi-family…but they get excited and want to stop everything, run out and try this new real estate investing “tactic.” Just like life for the rest of us, this excited new investor eventually falls on hard times. They come across problems, something goes wrong and then they’re out of the real estate game just as quickly as they jumped in! Then they go back to whatever it was they were doing previously. This struggling entrepreneur and the person that jumps in and out of real estate does so because they lack the understanding of what they are actually trying to accomplish in real estate! They do not understand the strategy! One must be able to say, “Financially, this is where I’m at; over there – wherever that is for you – that’s where I want to end up. That’s my end-goal. I’m going to use real estate as the vehicle to get me where I want to go. Real estate will not be my life. It will not be who I am.” To personalize this, let me say it this way: real estate does not define me. But I’ve used real estate as a vehicle to take me from my parents basement during the market crash to being a successful investor and finally, financially free today. My very first goal in real estate was to make enough money/cash flow from rental properties to pay all of my normal monthly bills. At that time, I needed about $4,500 every month. Once I reached that $4,500 mark, I had arrived at my destination, my goal line. However, accomplishing my goal was much easier than I had thought it would be. So now, I wanted $10,000 per month. Once I reached that destination it was, “How about $15,000 per month?” Strategy will change and grow as we reach our destinations. There are two main points one must understand to...
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When teaching our students how to invest in real estate, one focus is our brand. When Ann Lee was founded, as with any new business, there was a multitude of decisions we had to make. But one thing was crystal clear. We wanted our buyers to have a different experience. We wanted to set ourselves apart in the marketplace. Because frankly, the majority of flippers were all beginning to look the same. It was getting extremely boring to be a flipper and have your product stand out. But we changed that quickly! So we created a brand called “Ann Lee Interiors”. We built our own army of dedicated agents, lenders, contractors and employees who follow and promote our brand. As soon as a potential buyers walks through the front door, we wanted to give them a unique buying experience! We take our buyers on their own custom journey. And during that journey, every single small detail is important. It’s the little things that make a difference. Things like custom Ann Lee labeled house keys, custom brand postcards, and small customized pop-up promotional cards spread throughout the home. When you’ve built your brand, you’re in-turn, customizing every single flip! When you customize the home and the home-buying experience, you have just ensured that your potential buyers feel special. Your product, in turn, stands out from your competitors. You may ask, “what sets Ann Lee Custom Homes apart from their competitors? Most real estate investors would never share their secrets with the public, but we’re different! We want to share our wealth of knowledge to help make you more successful and profitable. While I do not wish to bog you down with details right now, there are 5 simple ways to ensure that your house stands-out: Be different from your competitors – It’s not rocket science! Every buyer has an mental picture and checklist of exactly the type of house that they want. Make your investment stand-out by giving the potential buyer what they want instead of what you want or is the least expensive. It needs to look like a custom designed home rather than a home designed by a contractor or narrow-minded investor! Be aware of how the potential buyer perceives you – Our buyers perceive us as custom home designers rather than flippers/investors wanting to earn a quick buck and move onto the next investment without putting any thought or pride into their flip. Our buyers see our homes as ones that they are eager and excited to purchase rather than a house that they are just “agreeing” to buy.So again, ask yourself this: “How does my potential customer perceive me? Do they perceive me as a ‘flipper’ or as a ‘custom home designer’?” Tile is “art” not “flooring” Most investors consider tile or laminate floors simply as “flooring.” We’re different –...
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As we’ve discussed previously, the number one problem for the majority of new investors is that they are unable to find their first deal. The second biggest problem for new investors, or occasionally experienced investors, is finding the funding for your deal. However, my decade-plus worth of experience has showed me that these problems are more or less excuses! One must first understand and be aware of the different types of lending when it comes to real estate investing, rehabbing, or flipping. I will list them below and we will expound on them much more in the very near future. Here are the types of lenders: 1. Hard money lender – aka “HML,” this is an easier route as they’re in the business to loan you money. 2. Private lender – obviously “private lenders” can lend you money but is not considered an “institutionalized” lender. These usually come from immediate circles of influence such as a doctor, attorney, church member, friend, or family member. 3. Lines of credit/cash – aka “LOC, Business LOC, or credit cards”. This is borrowing money on a line of credit or a credit card. I know of several investors who have bought and rehabbed investments using only a credit card. Especially with low or no interest rates. Cash, this is obvious. If you have the cash, you’ve got the house. 4. Self-directed IRA/401K – this is using one’s 401k or IRA money or using someone else’s 401k or IRA to loan you capital 5. Joint Venture or JV – finding an investor who will put up 100% of the money for the purchase and rehab and then split the profit on the backend. This is a very popular source of funding As I mentioned earlier, we will expound on each of these in future blog articles. We’ll talk about how they work and how investors use this type of funding. Usually, investors don’t only use one source of funding. They use multiple sources of capital. In my opinion, the most successful way to use lenders is to utilize all avenues of funding! When it comes to accessing capital for your rehab, you don’t need to have liquid cash in your bank account. You just need access to someone who has funding available. Don’t sit around and wait for all of the money to be into deposited into your account in order to buy a house. I simply grab my Rolodex and call my lenders directly. A lot of investors both teach and state, “find the house and the money will find you“. There is an element of truth to that statement but the market is always tough and depending on the area, the inventory might be low. This is why the investors who already have access to funding are usually far more successful. The capital is already there so you...
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