HOW TO START A HOUSE FLIPPING BUSINESS: PART 2 OF 3
This is the second article in our blog post series on how to start your house flipping business from the ground up! After releasing the first article we got a lot of feedback from newer investors who said they really enjoyed the information and found it extremely helpful in giving them actionable steps to take when first starting out! So in this 2nd of a 3 part series we are going to go even deeper and deliver you some of the best “free” information you can get your hands on when it comes to real estate investing. We are on a mission to help as many investors as we can to achieve a life of financial freedom through real estate investing…..and this series of articles will give you simple step by steps instructions on how to do just that! Now that we have gone through what you need to do in order to start your House Flipping business, now its time to start making some major decisions on how you are actually going to make money! What I mean by this is what is going to be your property acquisitions niche or where are you going to find your deals? Because eventually you will actually have to buy (or assign) properties if you want to make money! Eventually you want to diversify so that you can constantly acquire properties through a variety of different niches, but when you are first getting started the only way to assure success is to FOCUS on one niche at a time. So here’s the deal…..most new investors start out trying to wholesale REO’s because they are the easiest to get access to since they are almost always listed for sale on the RMLS. The problem is most of them have no clue what they are doing and end up wasting A LOT of peoples time. Here is an example of a recent phone call I had with a newbie investor who called my office to try and sell us a deal: Newbie Investor: Hi there the guys at TTM Development Company……I have a great deal for you! Me: OK…..well tell me a little about it. Newbie Investor: Its a solid house that needs about 10K in rehab. I am selling it for 120K. Me: OK…..well can you give me the address and I’ll do some research? Newbie Investor: Its 123 main street After doing about 2 minutes of research I come up with the following information: The newbies house is an REO that has been listed for 95 days, the listing price is 115K, its a complete gut rehab, the house is in...
HOW TO START A HOUSE FLIPPING BUSINESS: PART 1 OF 3
This series is going to be dedicated to teaching you how to start a Real Estate Investment business (AKA House Flipping Business) from the ground up……and since I have successfully built one of the largest House Flipping businesses in my market of Portland, I think that should be a pretty good reason for you to keep reading and put this valuable information to work! This is one of the greatest businesses on earth, and to be successful doing something this great is one of the best feelings you can experience in life. On the flip side however, getting your Real Estate Investing business off the ground and then building a successful business that lasts can be very difficult…..especially when you are trying to accomplish everything on your own without the help of a mentor or business coach. So in an effort to give out some SUPER VALUABLE free content to our Real Dealz followers I am going to go through everything you need to do, in order to build your your very own Real Estate Investing business. This will be a three part series dedicated to getting you off the couch and ultimately running a hugely successful Real Estate Investing business…….so here we go! The first question that everyone asks themselves when they get into real estate investing is…..what do I do first? Well here is the answer….set up a company! I have read articles from a lot of Gurus who say don’t worry about it until you flip a deal or two….well I say BS! You have to treat Real Estate Investing just like you would be starting any other type of business, and there is no way in hell you would start any other type of business without actually setting up a company first. So the next step is going to be picking a company name…..now this is actually a very important step, so give it some thought. Pick something that people will remember and that will allow you to stand out from your competition. My companies all start with TTM, and the reason for that is because its easy for people to remember (and its my initials of course). Now when you are first starting out using a straight LLC is going to be just fine since they are rather simple and cheap to set up. After you have been in business for a year or so and are making profits, I would then suggest having your accountant file for the S-Corp election. This will allow you to ultimately save a lot of money on your taxes….but consult with your CPA before doing so. The next...
HOW WE MAKE HUGE PROFITS FLIPPING HOUSES OFF THE RMLS!
In this article I am going to dissect one of our rehab projects that we purchased off the RMLS and managed to renovate and re-sell the for a nice six figure profit! I hear a lot of investors who claim there are no “real” deals to be had on the RMLS since everybody can see them, but to be honest I couldn’t disagree more. My business is now set up to mainly derive our deals from direct mail and online marketing towards motivated sellers, but whenever our marketing is a little slow and we are in need of a deal, the RMLS is always at our fingertips to help fill up our pipeline….but the key is knowing how to farm the RMLS for deals. I started really ramping up my business back in 2008 by purchasing REO’s when nobody was bidding on them in my market, but since then a lot more competition has come into the market and we have had to diversify our RMLS acquisition strategies. Today we definitely scour all of the REO listings and have relationships in place with REO listing agents, but we also pay special attention to probate deals that ended up being listed on RMLS, instead of having an investor like us purchase them ahead of time directly from the Estate. A lot of times the beneficiaries of any given Estate really want to try and get as much money as possible for the inherited assets, and in order to do that they will end up listing an inherited “fixer” property with a realtor. The property in this case study was a classic example of this….so without further ad-due lets jump into the case study! I found this particular deal while perusing the RMLS one morning while we were about to run short on rehab projects to keep the crew busy. We had a number of pending contracts in place, but since most of them were early probate deals there was still a lot of court paperwork to be completed before we could legally purchase the properties….so I decided we needed to find a deal fast and the best way to that was to dig around on the RMLS. I spotted this particular property a month or so back since it was in the same area as another rehab project that we had going at the time, and at this point it was really starting to rack up some serious days on market or DOM. Also from the comments in the listing and the fact that the property was vacant I concluded that it had to be a probate deal that ended...
CAN YOU FIND GREAT PROBATE DEALS ON RMLS?
Investing in probates can be one of the most profitable niches in residential real estate investing by far, but the reality is that it can also be difficult (at least initially) and time consuming. There is a lot of work that goes into locating your prospects, executing your direct mail campaigns and following up on all your leads….but there is an easier way for those of you who may not have the time or resources to market for probate real estate deals on your own. Although we do a ton (and I mean a ton) of marketing within my house buying business that is directed towards probate estates and their attorney’s, we also keep a close watch on RMLS to find & track probate listings. You may think that the only deals you can find on RMLS are Short Sales and REO’s…..but I can assure you that is not the case. While most investors are searching RMLS on a daily basis for great REO & Short Sale prospects, that leaves the door wide open for you to easily snag some great probate deals that are flying under your competitions radar. It is the case that no matter how much we market probates, no matter how solid our sales pitch and how much repore we build with a seller, sometimes greed and uneducated opinions will cause probate beneficiaries to ultimately reject our offers and list the properties with a realtor in hopes of getting a much higher price for the property. There are sometimes when listing an inherited property with a realtor is a good idea because it will most likely allow you to get more money for it….however I have seen more times than I can count beneficiaries list major fixer/outdated properties with a realtor because they and the realtor feel (at least initially) that the market will give them much more than the property is really worth (i.e full retail price). There are a few reasons why this happens, so lets go through them quickly so that you can better understand of the inner workings of a sellers mind when it comes to probate properties…..First off most sellers think that their property doesn’t need as much work as you know it does. This happens quite a bit mainly because most people just don’t know all that much about houses, construction and updating. Second they think that if the property is worth 200K fixed up and it needs 50K in work, then they should easily be able to sell it for 150K. And finally the third reason is because some Realtors actually believe the previous two items as well...
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