Posted by Jason (AL) on July 05, 2007 at 19:03:30:
Cool.
So to “cover your bets”, you do your homework/dd on the
debtor BEFORE purchasing, yes?
How do you go about finding out their ability to pay, if
so?
Thanks.
Anyone ONLY do flips, and do it full time? - Posted by Mike
Posted by Mike on July 03, 2007 at 11:18:38:
Is it realistic to expect to be able to only do flips as a main income source?
thanks, Mike
Re: Anyone ONLY do flips, and do it full time? - Posted by Chad (MD)
Posted by Chad (MD) on July 04, 2007 at 12:47:15:
Sure it’s possible to do flips full-time, but my suspicion is that many flippers eventually move into rehabbing. Flipping is a great way to start (as many recommend) for several reasons.
One is there’s practically no risk – you find the deal, make a few thousand, and you’re out. The rehabber takes on all the risk – of course he or she normally makes a larger profit.
In a typical deal for me (and I’ve only done a few so far) I get $5k for finding the property and negotiating the price. My buyer (the rehabber) will make $15k to $30k.
Another advantage of flipping is it teaches you how to find deals. If your deals aren’t good enough to flip to another investor you probably wouldn’t want them either.
The main disadvantage is that it’s frustrating. I’m at the point now where I’m considering taking on a light rehab myself.
Happy Fourth of July!
Re: Anyone ONLY do flips, and do it full time? - Posted by Alex Franks
Posted by Alex Franks on July 03, 2007 at 19:27:57:
Hey Luke
Please email me I am in Rock hill looking for more contacts in NC and SC…
Dealmaker you buy cash feel free to also contact me…
I am working in NC and SC market area.
As for wholesaling I did it for my first three years Now I do both rehab and wholesale.I have built up a good list of investors as well as (buyer)wholesalers .So do one job and become good before yous step in other areas of real estate
All and all it can be a very rewarding experience
Re: Anyone ONLY do flips, and do it full time? - Posted by Kevin
Posted by Kevin on July 03, 2007 at 17:25:05:
Most of what I do is flips. Buy, renovate if needed, and then sell. My best month was over 300,000. Things are a little slower but still doing well.
Kevin
ONLY flips - Posted by dealmkaker
Posted by dealmkaker on July 03, 2007 at 15:01:57:
That’s the “only” REI I do, but for a different reason. I buy, rehab flip as needed to maintain my income level.
My “income” is in seller financing with very small (typically $2K) down at anywhere from 8-12% rates. Because there is an (apparently) unlimited supply of people with bruised or no credit history I can almost buy for cash at FMV and mark up $15K or so (this in on houses that are $50K-$90K FMV) and get a buyer in less than a week.
I only do it when enough people sell or re-finance to drop my income below my “comfort” level.
dealmaker
used to… - Posted by lukeNC
Posted by lukeNC on July 03, 2007 at 13:39:44:
I used to do straight wholesaling. Closing anywhere from 3 to 8 deals every month.
its alot of work, alot of phone time. I had a earpiece, bluetooth, etc. On my best month, I made $80k.
It’s possible to have that much business going on.
Eventually though, you want to build passive income sources, stuff that pays you regardless if you have make a hundred phone calls or not.
Re: Anyone ONLY do flips, and do it full time? - Posted by Mike
Posted by Mike on July 04, 2007 at 18:13:07:
Good points. And also, do you mean the “frustrating” part is seeing the rehabber make the larger profit?
Happy Fourth of July!
Re: wait a minute… - Posted by Christen
Posted by Christen on July 05, 2007 at 16:10:27:
Do you mean 300k in income in one month. I am impressed. You wholesale, and rehab. where and what?
-a fellow rehabber
Source of funds? - Posted by Jason (AL)
Posted by Jason (AL) on July 03, 2007 at 15:31:19:
Cool.
Sounds a lil’ like what I do.
How are you purchasing your deals?
Banks…HMLs…sub2?
Re: used to… - Posted by Jason (AL)
Posted by Jason (AL) on July 03, 2007 at 15:29:26:
Hey Luke,
I know you’ve ventured into the paper now.
But do you/can you generate those same chunks of cash
as you can/did with your wholesaling?
Also, have you found it as easy…less running around
and staying glued to the phone vs. wholesaling?
Re: Anyone ONLY do flips, and do it full time? - Posted by Chad (MD)
Posted by Chad (MD) on July 04, 2007 at 18:57:34:
What I meant by frustrating is that as a wholesaler all your time is spent looking for deals and dealing with lots of non-motivated sellers. Of course, to be successful you only have to find one good deal among 100 non-deals, but you never know when that will be.
I feel that with rehabbing you have more control; you find the deal you like, then you go for it. I’m not speaking from experience because I haven’t done any rehabs yet. My plan is to do a few more wholesale deals first to build up cash reserves. At the same time I’m keeping my eye out for a good project for my first rehab. I’ve got good credit, so I was able to get business lines of credit easily. I don’t have hard money lenders yet, but I’ve started looking into it. Also, I know lots of cheap workers to get the job done.
One thing to be careful of when doing your own rehab is comps. I’ve noticed that the rehabbers I work with are very meticulous about comps. That’s logical because when you finish the rehab you need a realistic idea of what it will sell for.
Re: wait a minute… - Posted by Kevin
Posted by Kevin on July 05, 2007 at 19:30:18:
I invest in Maryland. The month that I made 300,000+ was the best month when I sold 7 properties. I probably average 100,000 per month and sell 2 or 3. I have been full time for over 6 years.
Re: Source of funds? - Posted by dealmaker
Posted by dealmaker on July 03, 2007 at 15:47:55:
I buy for CASH, it’s quicker, cleaner, no hassles and I can write CASH, 3 DAY CLOSING on my offers which makes for some serious consideration considering how low I’m offering, lol.
dealmaker
Re: used to… - Posted by lukeNC
Posted by lukeNC on July 03, 2007 at 18:12:32:
as john behle says, you make just as much dealing in paper as you can in real estate.
I deal mostly in ugly paper. Yes, I’m not on the phone nearly as much. It is easier once you get the hang of it.
I have not had a huge month, but I’ve been able to build a very nice cash flow.
Re: used to… - Posted by BigV
Posted by BigV on July 03, 2007 at 18:26:29:
just so I understand, do you buy owner financed notes and that’s how you make money?
For example, find a 20K note over 30 years, secured by RE. Offer 10K cash for the note. Collect payments.
But the problem is that there is a risk, right? SO you want to be ready to foreclose (and calculate that in your cash offer for the note)
Thanks,
V
Re: used to… - Posted by lukeNC
Posted by lukeNC on July 05, 2007 at 12:19:11:
not really. I rarely buy the typical RE secured notes because the profit margin is not as high.
I can buy an unsecured note that has not been paid on 1 year for 5% or less of the principal, 10 cents or less.
Example. Say I’ve located a $35k 2nd mortgage where the 1st foreclosed, no equity in the property so the 2nd is still outstanding and is 2 years in arrears. I know where the debtor lives and figure it to be a good investment. My state, NC, allows that now unsecured 2nd to still collect whats owed as long as it is not purchase money. I could buy that $35k 2nd for $1k and work out payment arrangements for $100 a month, no interest with the former homeowner.
ITs basically like this, buy a note at a very steep discount.
Improve the note – adjust terms, add more security if possible, etc. Create more leverage with it.
Collect on the note.
Just like in RE, I make money when I buy the note and get paid when the borrower pays.
Re: used to… - Posted by Jason (AL)
Posted by Jason (AL) on July 05, 2007 at 14:11:37:
Do you rummage through the courthouse, or are these
deals referred to you? If the latter, by whom?
These are my type of notes…
Re: used to… - Posted by lukeNC
Posted by lukeNC on July 05, 2007 at 18:02:53:
from a variety of sources, mostly these days by referral and other sites. Brokers who sell defaulted 2nds, credit card paper, auto def. paper, and etc etc.
Just too much to mention…