I left a 17 year tech career primarily in NC & OH to flip properties.
I have flipped 10+ homes and have another 10+ rentals.
I am moderately successful. AMA.
I left a 17 year tech career primarily in NC & OH to flip properties.
- My taxes are complicated.
I make full use of SEP IRA.
I have several companies. SCorp & C-Corp etc. I get pass through K1 and dividends. Tax treatment differs.
I also qualify as a RE professional so my carryovers compute differently.
If by day-to -day you mean personal, I don’t. I don’t even deduct my phone because it’s too much of a hassle and the darn thing only costs $70/month.
I make full use of travel and entertainment deductions within IRS guidelines.
I have no qualms at all about paying taxes.
- What was your starting capital? Do you have a Contractor or did you get a license yourself?
- Different kinds of stress.
I have capital at play. Heavily leveraged. 5 employees that I need to make sure are working and making payroll for.
But I can work when I want (I’m nocturnal so I can be on site at 3am doing shit). I’m my own boss and that counts for something... I hope.
- When did you start ? Do you do fixing and improvments by yourself or hire contractors ?
- This is the most time consuming part of my day. I zero in on an area and then do multiple projects in that area. So, I call people to make off-market bids.
I scout news. Obits. Sweet talk just for the opportunity to pay cash for your house AS-IS.
Now certainly I could hire someone for this. And I have. But I am more successful when I do it so I end up doing it myself [aka control issues].
A robust pipeline is the key to maintaining business momentum.
- It is. Which is why it’s very time consuming.
I mostly buy off-market and my strategy is what I noted earlier. I‘m a data nerd, I know a lot about what’s going on in any area I’m in. Divorces. Deaths. Debts etc. Anything that says you may be open to selling.
And yes, it eats up a lot of my time.
- Thanks, man, for taking the time to share with us !
"Divorces. Deaths. Debts" that's exactly the kind of practical insight I was looking for. Never thought about this but it opens up new perspectives. I was thinking it must be some guided strategy. It cannot be just a number's game of mailing flyers to the entire city and hope someone will call you back. I suppose you have some connections with local attorneys, real estate agents, collection agencies ?
- I pay for info. Neighbors know a whole lot and I pay a 3% finders fee on information that leads to a purchase.
I don’t do mass mailers. I prefer phone calls. If I write a letter, it has a specific offer amount on it.
My state has lots of info online. I scour a lot of this. I am a data nerd. So I amass info to trade.
This is why I operate in a small geographic area. Attempting to do this at scale would be impossible for me.
I also work with wholesalers. As long as the price is right...
- New TAbQ12What does knowing a market comprise of? I would imagine - knowing the good and bad neighbourhoods, being able to value a property, estimate the work, cost and time to flip on sight. What am I missing?
- For me it’s knowing the year on year appreciation rates. The zoning laws. The projected developments. School ratings. Any deficiencies in the neighborhood. And other such intangibles.
Who is moving in? Who is moving out? Why? Rental trajectory? Purchase trajectory? Right down to what streets have flood back ups.
Who is buying? What do they do? What do they like? What sells here? What’s overkill? What’s your fallback strategy? etc
- Twilio / Sales testingme1How much prior knowledge did you have in construction to be able to run your own crews? Any resources you’d recommend to learn more?
- I had some DIY knowledge, but not of the permit process and the insane effort that goes into building a solid house.
But I’m a sponge and wanted to succeed.
I honestly did not read a single book. I watched tons of YouTube and practiced a shit ton often on my own house to learn stuff like taping/mudding.
- Do you flip single family houses only or condos too ? Is there any difference ?
For those who think about getting into this, condos have a lower price but I don't know about profitability.
- I flip everything. It entirely depends on the entry price, cost to cure and potential exit. Also, can I add it to my rental portfolio because it’s near a college, hospital etc.
SFHs have the highest margin but I’ve gotten some deals in high end condos with crazy HOAs especially when it’s part of an estate.
[Non-sequitur: Children are the worst. The speed with which out-of-state kids dispose of assets of their dead folks for pennies on the dollar is fucking shameful]
- LinkedIn PESn67I want to get into multi family construction. But being an out of the state investor, how do you suggest I find a good GC?
- Affirm 650califorAdvice for getting access to capital? Or just save for 20% + repairs and get a lender for the rest?
- Is this business scalable into something that you can hire more people to work for you to flip faster?
- No. I am not a good process guy. If I died today the business would disappear. It relies heavily on me to be the quarterback.
More capital would likely mean I have more people on the same project so they can finish faster. I tried multiple crews without constant oversight.
That’s mistake cost me 6 figures.
#lessonLearned or maybe #neverAgain
- 1. Me (physically). I never really set this up to grow super large. I still think the operation is big and requires a lot of my direct effort. My phone rings constantly and texts stream in all day. I don’t delegate well because too many people fuck things up.
2. Me (risk level). I’m 42 I’ve seen a few recessions and I know shit can turn on a dime. I don’t want to deal with a 20 person company and have 10 properties on backlog when a recession hits.
- What is your age now? What is your advice if I want to get into this business right now?
- Did you ever sue or get sued for anything and have to go to court? For example, evictions and non paying rent. Paying contractors to do work but they took money and ran away?
- I’m honestly doing it just for the money. I’m not a people person. I hire people to handle the shit I don’t like.
That’s why I have a property manager.
Lawyers are there to handle evictions and sue errant contractors or firms that do substandard work.
At least that’s how I’ve done it.
- Amazon Pooper692 things:
1) how much did you net your first year (after taxes and considering your 401k withdrawal)
2) how much experience did you have prior to your first project?
- I have five rentals, most in the Bay Area. I want to expand out of state. Which area do you recommend? Please specify the part of the city and state.
- The key to out-of-state RE investment is having people you trust implicitly and whose judgments mirrors yours.
I know Central Ohio, it has been (very) good to me but I can’t recommend it to you because it may not fit with your approach, outlook, risk factors, Capital cushion etc.
- Do you have any properties or have done flips in the Bay Area or CA?
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