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3 Important Things to Consider Before Buying Your First Property
January 28, 2015
As a new real estate investor, nothing is more nerve racking than buying your first property. It’s taking that first big step down a new and exciting career path. I can tell you that once you get your first deal, you’ll only want to get more. However, before getting that deal, there are three major things to consider. These three factors are a very important part of planning what exactly you are going to do after buying your first property, and require careful consideration. 1. What is your end goal? Having a plan and goals are as important when buying your first property as it is for every property after that. However, the process when buying your first property sets the bar for all the ones that come after. Ask yourself “what do I want to accomplish“. Is there a certain amount of profit you want to make? Is there a specific date that you want your repairs to be done by? Maybe you just want everything to go smooth. Don’t worry about what the “latest and greatest” method or strategy is. Do your homework and figure out what goals fit your business model. Whatever goal you set now will help you how to deal with similar situations in the future. Without having any kind of end goal, you can’t put together the steps to achieve one. Creating an end goal lays the foundation for everything that comes after, like creating a strategy and putting your team together. Set an end goal Don’t worry about the latest and greatest Use your goal to develop steps to achieve that goal “Success is where preparation and opportunity meet.” -Bobby Unser Click To Tweet 2. Know your exit strategy! Before buying your first property, you need to have a goal in mind for the property. Before you make the offer, you need to set an expectation. Know your exit strategy! What do I mean by exit strategy? If you are going to take the time to repair the house and sell it after, your exit strategy is to flip and sell the house. If you are going to turn a quick profit on the house then don’t plan on any repairs, plan on wholesaling. Flipping and wholesaling would be your exit strategies. Both require different pricing and planning, but both are examples of exit strategies. In addition to a main strategy you’ll want a “ripcord” strategy. You’re buying your first property! It’s worth having an extra strategy. If your main strategy is to flip a house and sell it, and your house doesn’t sell, consider selling it at a deep discount your emergency strategy. Let’s say you want to fix your new property and rent it. Your “ripcord” strategy should be to sell it and move on to the next deal. Limit yourself to only two strategies and exhaust every option to make those strategies work. The more emergency plans you have in place, the more indecision effects the amount of profit you will make. Keep your plan simple. Have an exit strategy Limit yourself to one emergency strategy Keep your plan simple and stick to it 3. Have your team in place Every real estate investor wants to be the best at what they do. From buying your first...
read moreNever Give Up and Here’s Why
January 26, 2015
On Sunday, January 18, 2014, we witnessed one of the most powerful forces in the universe: Belief! The Seattle Seahawks proved to the world how important it is to believe in your self, to be confident in your abilities, and to be convinced of a result nothing short of a win. They NEVER gave up despite the fact that the entire deck was stacked against them. It got so bad that with 3 minutes and 7 seconds left in the game, the Seahawks probability of a win was a paltry .10%! Yes, that’s 1/10 of 1%! But they persevered until the glorious end. Their fearless young leader, Russell Wilson, had ice running through his veins that night. He had thrown 4 interceptions already that day to an under-rated, un-drafted free agent receiver named Jermaine Kearse. But that did not shake his belief, his conviction, or his determination. He told the offensive coordinator that they’re gonna win that game and he’s gonna do it by throwing a touchdown to Kearse. As the game drifted into over-time, Wilson marched the offense straight down the field and in the final seconds, pitched a 35 yard perfectly thrown touchdown pass to win the NFC Championship for the second season in a row. While I’ve never played in the NFL, I can relate to the trials of defeat, or likely defeat, and then triumph against the odds. In a matter of months, the Great Recession took me from a million-dollar lifestyle to sleeping in my parent’s basement. Instead of throwing in the towel, like the Seahawks, I took the lessons that I learned at the end of the last real estate bubble and completely restructured both my personal life and my business investing strategies. But this was not just a story of success and failure; it is a story of triumph against the odds with a personal touch. I never gave up, I believed in myself and my abilities. Also, I trusted my Team members and co-workers. I lived by conviction and I refused to stay knocked down, and I won! “A business that makes nothing but money is a poor business.” -Henry Ford Click To Tweet Last year, I was another victim of the charlatan publisher, Andrew J. Waite. I’ll defer from mincing words here. The guy outright extorted me to advertise in his magazine! I spent literally ten’s of thousands of dollars attempting to keep this man at bay. He would constantly send me veiled threats that he could and would destroy my company and reputation in the real estate industry. However, his feeble attempts to destroy me have failed. I never gave up fighting for my company, for my reputation and for my family. I stayed determined and I stayed convicted. Additionally, I believed that the truth would prevail and it has! My point in sharing these examples is to encourage and motivate investors who might be going through some hard times. Maybe your investing business is good, maybe you’re moving flips and investing in rentals, but there’s something in your personal life that eats at you and is discouraging you. I hate to sound cliché but I will anyway: Believe Stay determined Stay true to yourself and your convictions Refuse to stay down Never give...
read moreDIY: How to Flip a House – Houses 4 of 15 (Video)
January 23, 2015
In this video, Andrew shows you how to flip a house by executing the perfect system. For demolition, design and display in many different areas of the physical property. Andrew has spent the last decade showing investors of every experience level how to flip houses. Now you too can learn how to flip a house! Today you can expect to learn: How flower boxes can influence the look and feel of a home. Want to learn more about how to flip a house? Click here to view part three of the series. ...
read moreTop 5 Most Common Factors That Destroy Profit on a Flip
January 21, 2015
As a real estate investor, turning a profit on a flip is how you make your living. It’s how you put food on the table and grow your business. A profitable flip supports your business and personal life. This post will discuss the top five factors that prevent both novice and experienced house flippers from turning a profit on a flip. If you take these problems and apply the solutions to your business, there’s no reason why you can’t make a bigger profit on a flip! Problem 1: You don’t have a realistic budget Accurately analyzing repairs is a skill that always gets better with time and experience. After a few flips, you start to understand more of what to look for and extras to account for. Not all investors have time or experience. If you have just jumped into the real estate investor game or you only do a couple of flips a year, you may have problems accurately calculating the cost of repairs. You may be able to turn a profit on a flip, but maybe you feel like you could be making more. What can you do? Calculating repairs isn’t an exact science, but you can definitely get close! Try using my Budget Cheat Sheet. It is used for calculating general costs of material and labor. It also includes 10% of “fiscal wiggle room” to ensure that you can account for the unknown. Again, this does not calculate repairs down to the penny, but it will put you in an accurate ball park and should be included in your real estate investor tool box! You could also walk rehabs with a contractor. It never hurts to ask for help, especially if you have built a great relationship with your contractors. Without somebody like a mentor or a tool like a budget cheat sheet, you will have a hard time knowing what to look for and how much it will cost to fix. Walking a potential flip with a contractor can help build a great relationship with them, as well as increase your understanding of what general repair costs are. Try using a budget calculator to determine repair costs Walk potential deals with a contractor When it comes to budgeting, always account for the unexpected Problem 2: Over and under improving More often than not, rehabs end up under repaired. Chances are if you have done the deal and are looking to begin repairs on the house, then you have calculated your ARV. You know how much your house should sell for, but do you know why it should sell for that much? If you based your ARV on houses that had granite counter tops, then your rehab needs granite counter tops. Your house needs “wow” factors. If you under improve your house, there is no way you will to turn a bigger profit on a flip. You will only lose money from your house sitting on the market and from having to cut pricing. The same thing can happen if you over improve a house. If you completely gut the inside of a house and expect to get a much higher ARV than the houses surrounding it, you’ll be bleeding cash. Know what updating your ARV entails Pay...
read moreDIY: How to Flip a House – Houses 3 of 15 (Video)
January 16, 2015
In this video, Andrew shows you how to flip a house by executing the perfect system. For demolition, design and display in many different areas of the physical property. Andrew has spent the last decade showing investors of every experience level how to flip houses. Now you too can learn how to flip a house! This week you can expect to learn: What you can do with a back patio deck to help make sure you get top dollar for your house Interested in learning more about how to flip a house? Check out Part 1 and Part 2 to get caught up, and check back weekly for more awesome tips on how to flip a house! ...
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