Creativity Part 3 | Banks

Hey, guys. It's Mike with House Flipping School. Welcome to the House Flipping School whiteboard. You just heard me talk about the art of the deal, and how we structured a deal to make some money before we sold the property and cashed out with our profit.

I left out some important information, and quite honestly, I forgot about it because this deal happened about a year ago. I want you to pay attention because it's kind of funny in a way, and I stumbled across it when I presented the loan package to the bank in trying to borrow some money.

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Onset Part 2 | ARV and how I used it

Ryan: Hi, I'm back with Mike. We're talking about the Onset, Massachusetts house flip, and let's dive into the ARV. You said it was somewhere around $206,000. I want to know every little detail about that number.

Mike: Yes, and let me be clear, Ryan. ARV is in my opinion, and probably some other experienced investors' opinions, the most critical number. Because, if you get ARV incorrect or substantially incorrect, you are going to be fighting an uphill battle to make any money on a property.

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Creativity Part 2 | The art of the deal

Hey, guys. It's Mike, with House Flipping School. Welcome to the House Flipping School whiteboard. If you notice, I got a smile on my face. I want to share with you the little smiley guy up there, as well. My film crew, Ralph behind the scenes and Ryan, well they have not even heard of this deal yet.

This is one I have not shared with too many people, so I hope you enjoy it. What I'm calling this one is 'the art of the deal', because quite honestly, I didn't even set out initially to put this deal together in this fashion. It all kind of unfolded like this, and I had that kind of 'aha' moment myself on this one.

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Onset Part 1 | How I worked with my wholesaler

Ryan: So I am back here with Mike and we're talking about the Onset, Massachusetts property. Now, Mike, I know you worked with a wholesaler for this property. I am interested in the money. How did he get paid? How did you go about that? I want to know the specifics.

Mike: That's a great question, Ryan. I get asked that question a lot, and what I find with people who don't quite understand this business, who are getting into it for the first time, they always want to try to negotiate with the wholesaler. There are times when you do want to negotiate with the wholesaler, but first you will need to identify what the numbers are and understand the numbers. I'll get specifically into that in a second.

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Creativity Part 1 | Contractors

Hey, guys. Welcome to the House Flipping School whiteboard. This week, I want to talk about being creative, because in real estate, there are many ways you can be creative to make a deal happen. I think it was Brandon Turner at BiggerPockets . . . BiggerPockets is a great site; you should make sure to go check it out some time.

Brandon wrote a blog post talking about 100 different ways to make a real estate deal, or to make money in real estate. There's probably many more than that. This week, I want to talk about one particular deal, a deal that I almost didn't do, but ended up doing because I got a little creative and I thought outside the box a little bit. You heard me talk about this a few times, about partnering up. There's many different ways to partner up, but in this particular deal that I'm going to talk about, it's about partnering up with a contractor.

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How to Flip Property the Creative Way

When I teach people how to flip property, I stress the importance of trusting your numbers. If you do your 5th grade math and the numbers don't work, by all means do not get aggressive with your eraser. Eraser math can get a new or seasoned house flipper into serious financial trouble.

Calculating your after repair value, maximum allowed offer and rehab costs are essential to house flipping success. I myself still closely abide to the 70% rule for my house flips, and I don't see that changing anytime soon.

But how about those times when there is a deal on the table that feels right, however the numbers just aren't adding up. For example, lets say your projected rehab costs are so high, that the projected rehab costs alone are preventing you from getting into a deal. Is it possible to get creative, and somehow manage to flip this property for a profit?

Remember that there is no eraser math allowed!

My answer to this question is absolutely yes - it is possible to get into this deal. The only catch is that you have to be smart, and understand where and how to get creative. This is when having a well established house flipping team can really pay dividends.

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A Sneak Peek at the NEW House Flipping School

I have good news for people out there who really want to learn how to flip houses.

In particular I am referring to new investors and people who are on the cusp of getting involved in house flipping. If you are one of these people, then I urge you to read on...

For the past 9 months I have been building out loads of free house flipping content here on the House Flipping School blog. We have covered everything from establishing the house flipping mindset, to selling for profit and everything in between.

The last 270 plus days have been filled with blog posts, info-graphics, eBooks and the occasional webinar - all geared towards helping you learn how to flip houses and launch your house flipping career.

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Are You Ready to Build your House Flipping Team?

By far the best way to flip a house is by using a highly skilled team. Flipping a house without a house flipping team, is like trying to catch a fish without a fishing rod. You need a fishing rod to catch a fish, just like you need a team to flip a house. Best of luck trying to catch that tuna with your bare hands - and even better luck trying to flip a house by yourself.

I flip houses for a living because I have a great team of people helping me out. Each week I work with:

• real estate agents
• wholesalers
• attorneys
• accountants
• insurance agents
• contractors

These people are essential team members because they specialize in areas that I am not an expert in. It would take me hours to figure out problems my team members can solve in 5 minutes. Spending time working on tasks someone else could do much easier is certainly not the best way to flip a house. Using my time efficiently is critical if I want to reach my goal of flipping 12-15 houses during 2013.

Recently I have received numerous emails from people who want to learn the best way to flip a house - which of course means learning how to build their team. These folks seem a little confused about how to build their team. Many of them have attended REIA meetings, Chambers of Commerce and other networking events without much success.

Attending these networking events is really just step 1. To be honest, it is very possible to meet your future team members outside of these networking events. I've even met valuable team members at Holiday parties, in the grocery store and on the golf course. The key is not where you meet, but instead how you handle each interaction.

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Wholesale Real Estate Investing: 3 Unconventional Tips to Find Deals

Discover 3 wholesale real estate investing tips to find deal...that most wholesalers are afraid of

As we've said before, if you want to get into flipping houses, real estate wholesaling is a great way to start for little to no money. And if you are really serious about wanting to learn how to do wholesale real estate investing , there are many ways to go about doing it.

Some ways are more conventional, whereas others are very unconventional. Just like house flipping, there are lots of paths to success. Here we touch on the more "unconventional" ways to find wholesale deals.

Real Estate Wholesaling Terminology Defined

When you're shopping for properties to wholesale, you will see the words "sold as is" in most of the listings you see. When you see that term mentioned, it means exactly that.

The bank or lender is oftentimes in another state, and has not done any repair work to fix the property up.

In most cases, disgruntled homeowners who can’t pay their mortgage often let the property go as far as repairs and upkeep are concerned, sometimes intentionally damaging the home.

These are just the kind of properties that a real estate wholesaler is looking for. Continue reading

How to Buy Bank Owned Property | make an offer that STICKS

Learning how to buy bank owned property is a sure-fire way to increase your odds of wholesaling and house flipping success. Entire books and courses have been developed around this topic, so to keep this post simple, I will focus on the keys to making a successful offer that sticks.

The "Low-Down" on How to Buy Bank Owned Property

• When making an offer on a bank owned property, the first step is typically to place all offers in the name of a trust. In this instance, the trust is the buyer of the property. You the investor are the trustee, and you will execute all necessary contracts and documents. This is important to understand because here at House Flipping School we preach using OPM, or other people's money to fund your deals.

If you need a refresher on why and how to use OPM, click here.

• Once the purchase and sale agreement (P & S) has been fully executed and earnest monies accepted, the trust will have an equitable interest in the property. You will want to add your buyer to the fully executed purchase and sale agreement via an addendum. You can add your buyer as an additional trustee and/or as a beneficiary. As an investor, you have the ability to resign as a trustee and relinquish your beneficial interest. Of course all of these documents and your fee, can be held in escrow by your attorney until closing.

Are you confused yet? LOL Believe me I was the first time I read about how to buy bank owned property. Yet as with anything in life, the more times you go through this process, the more comfortable it becomes. Here at HFS.com we have a specific plan in the works for showing you exactly how to learn this sort of thing. Stay tuned this spring for some major changes here on the blog that are going to knock your socks your off.

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