I have a question for you. I have looked long and hard to find and investment property, but the numbers never seem to add up. I watch TV and see these people are making hundreds of thousands of dollars for a couple of weeks worth of work. My question is how do they do it, and where are these properties?"

Thanks,

Ken Oberman 

Ken,

    This has got to be the question I get asked the most. In fact, I am looking at three separate e mails right now basically asking the same thing. My answer is simple; not in North Carolina are these properties available. Well let me change that a bit. Not here in the triangle area. The way to make money in this business is volume. If you can somehow do a house every other month and make between $10,000 and $20,000 each transaction you are doing alright. But even that is difficult to achieve without spending almost all of your free time researching properties. The business is a difficult one to succeed at, but not impossible. There are so many investors and amateurs competing for the same properties that you need to move very quickly when you have one in your sights. You also need a strong stomach and a lot of patience if you want to succeed. If you are interested in learning more, drop me a line and we can talk. 

Thanks for writing,

Mike

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Mike,

Shouldn't you have contractors in place you trust. It seems that you were lining guys up the last minute and this contributed to your problem. And why did you pay the original painting guys. I would have told them to take a hike. The property looks like it came out good though. Nice job.

Rob Mcormack

 

Rob,

     Thanks for the compliment. Your right about having contractors already lined up, but in the case of house flipping that doesn't always work out. There are two reason for this. The first is when buying a foreclosure the property is subject to 10 day revision rule at the court. This rule has the potential for the properties original bid to keep being upset 5% and pushed back an additional 10 days each time out. Its tough to lock contractors into a schedule when you have no real idea when you are going to obtain the property. The second thing is money. All of my contractors know I need a bottom line price on all repairs, and they usually comply. The thing is that if they can get a better deal they sometimes take it. I don't blame them, everyone has to make a living. So you do the best with whats available at the time.

     Regarding the painters, let me paint, (pardon the expression) another picture for you. The next day I complain and tell these guys to "take a hike" as you said. They say OK, with a grin, and walk away angry. Now its later that night at my now vacant property with these two returning to get some payback. By not confronting them I paid for peace of mind. Its a lot easier to say thank you, and be on my way.

     Great questions though. Keep them coming.

Till next time,

Mike

 

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Mike,

I have heard from some people that flipping houses isn't really worth the trouble. I know someone who flips houses and says that a project never takes place that isn't loaded with unforeseen difficulties that end up hurting profit. Do you agree with that?

Brian Lazina

 

Brian,

I agree partially. The person who told you that unforeseen difficulties arise with every project is absolutely right. I can not recall any project that I have been involved with that an issue hasn't come up that I wasn't expecting. Well, let me rephrase that; I always expect issues, Its just that I don't know what they will be until they are on top of me. If you go into this business thinking you will get in and out clean with no trouble, you are being delusional at best. You have to know that the unexpected is part of the house flipping game and go with the flow. Any business comes with risk. One way I combat this aspect is by micromanaging every purchase. If you save a dollar here, a dollar there, by the end of the project it can add up to thousands. So when the issues do come up, you have some cash to handle the problem. Another way to manage risk is right before the time of purchase. Before making your offer, try and think of the worst case scenarios and how you will deal with them. If you figure in a major repair cost right up front, it won't be so bad when it comes up. There are many other factors to consider, but these are just some of the basic methods I use. So back to the question, is it worth it? For me, definitely.

Thanks for writing,

Mike

 

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Mike,

 I just wanted to say nice job on the newest Flip pictures. How come you didn't do a story with this project? It makes for good reading.

 Justin Bailey

 

Justin,

Thanks for the compliment. That was a fun project. I didn't write a story because the negatives about this job were of a minimum. I had one issue with a contractor, but nothing that would merit a story. A story with little problems is boring. My core group of guys are great, and they know what it takes to get my stamp of approval, while at the same time straightening out any issue regarding a contractor we bring in that isn't up to the task. I appreciate your writing.

Thanks,

Mike