1. Do Learn the Art of Leverage

Please don’t be this guy; the one that thinks he can do all the trim work, the landscaping, the listings, the cleaning…get our point? Don’t overextend yourself. Be sure to keep your ambitions in check and don’t bite off more than you can chew. One of our main lessons in the Flipping Houses University is how to build your investing team and choose the right dependable people to help you accomplish your investing goals. Remember this word. LEVERAGE.

2. Don’t Be Too Big for Your Britches

Remember your mom telling you that? Don’t try to act like you know everything when in fact you are just starting out your flipping career. In reality, whether you are just starting out or have been investing for years… be yourself and be real. You will gain many more meaningful relationships that way–ones that you can use to your benefit. See LEVERAGE. Admit to what you know and what you don’t know. Don’t dismiss the advice of those who have been investing for years. They’ve seen both the ups and the downs in the market, and really know what they are talking about!

3. Do Use a Property Repair Estimate Sheet

One of the more important documents you need is Property Repair Estimate Sheet.   This document should include a list of all of the major items (roof, hvac, kitchen, paint, flooring…) as well as cost estimates for each item.  You should complete one of these during your initial visit of every house you look at.  The 2 main benefits of the form are 1) to save you time and 2) to give you confidence to proceed with the deal.

4. Do Know “Why”
Always know your why. Keep the main thing the main thing. Don’t get side tracked in all the hype. Keep in mind the reason you chose investing in real estate as your alternate income revenue. Maybe you want to be able to retire early. Or you are trying to pay off your house, or save for your kids’ futures. We provide these blogs so that what is important to you stays important. For example like spending time with your family. Don’t ignore your family while trying to build your business because then you would be sacrificing the very goal you are  trying to reach.

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Building Your Real Estate Team

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In an INC.com Magazine article George Stephanopoulos, anchor of ABC’s Good Morning America and host of This Week, is asked how he gets his interviewees to answer the hard questions.  Mr. Stephanopoluos replied with the following advice that applies to negotiating with buyers and sellers as well as to journalists.  

1. Prepare extensively. Good preparation leads to better questions. It also demonstrates a genuine interest, Stephanopoulos says. “Knowing what you’re talking about breeds respect on both sides.”  Before a 2009 interview about health care with President Barack Obama, Stephanopoulos prepared extensively to show his guest he had deep knowledge of the subject.

2. Don’t be a know-it-all. After all that prep work, you might feel like an expert. But keep things simple by starting with direct, open-ended questions. Then, use your knowledge to get your subject to expand on pat answers. “I used to try to show off how much work I did,” Stephanopoulos says. “But sometimes it was all wind-up and no question.”

3. Ask “Why?” Ask “What do you do?” at a cocktail party, and people go on autopilot. Ask “Why?” and people give fresher, more thoughtful answers. The same is true for television interviews, Stephanopoulos says.

4. Watch for facial cues. During a conversation, facial cues can indicate if someone wants to say more or less about a topic. For instance, Stephanopoulos says he can tell someone is having a new thought when his or her eyes light up. “You can see it more than you can hear it,” he says. Then, he guides the conversation in that direction.

5. Force yourself to be interested. If you’re bored by the person sitting across from you, your audience will be, too. The key is to find the one thing that does pique your curiosity. Stephanopoulos interviews a lot of actors, but he doesn’t always like their movies. His solution? He finds one scene that he finds remarkable for some reason and focuses on it.

Source: Inc.com Magazine October 2013 issue.

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Here’s his best advice to other REIs

“It is far too easy to quit when a few of the inevitable real estate problems arise … your vision must inspire stronger motivation and action than the paralyzing disappointments.”

He should know. Almost 10  years ago David Toynbee suffered a traumatic head injury at the age of 25. He was  given “a 50-50 chance of dying or being a quadriplegic.” With a strong will to continue his life, he defied the odds and walked out of the hospital three months later. The following year, he regained his ability to read, his driver’s licence and job.

Quite and inspiration to anyone in a devastating accident. But David went on to defy the odds and tried his luck at flipping houses. We picked his story because his strategy aligns so much with what we teach here at Part-Time REI. 

His Strategy

Like any good student, David read up on his subject. He found inspiration in books on real-estate investing . And furthermore gained the investor mind set and the motivation to purchase his first investment property. He also joined the Langley, B.C.-based Real Estate Investment Network to learn more about building a portfolio of properties. Something else we recommend; surrounding yourself with like-minded people.

He is primarily a buy-and-hold investor, focused on generating cash flow from his properties. Cash flow is “the most important factor in sustainability,” he says. Adding key points to finding good areas and opportunities to add value with renovation improvements and/or changes of use.

David soon realized that after a few years, his first investment property had more equity in it than what he could possibly save after 20 years in his day job. This was the first realization that real estate investing was an avenue worth investigating for him.

He has also learned valuable lesson on leveraging the right people in his business. Once he hired a property manager with out interviewing them and outlining his expectations. That hurt him more than it helped him he says. Lesson learned.

Do you have a success story that you would like to share with Part-Time REI?

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1.  Educate Yourself

You should have a plan for how you intend to learn about flipping houses. Just like any industry, real estate investing is constantly moving forward. You don’t have to be a Realtor to flip houses, but in some states there are specific requirements for real estate agents to take continuing education. As an investor, you should be doing the same thing. This can be anything from reading blogs, attending workshops, online seminars, or training courses online. Also stay on top of your market. By researching new opportunity you will stay apprises of what’s going on in the real estate marketing.

2. Set Goals

Why do you want to start investing in real estate? When do you want to retire? What is your dream trip? All good motivators to achieve  the place in life you want to be. Clear goals implement clarity.  Along with a goals, setting a clear schedule will compliment your structured goals. This includes financial goals.  Without specific financial goals, you’ll find it difficult or impossible to correctly analyze potential real estate deals. Investors flipping houses typically set a purchase price goal of 30% below market value after repairs.

3. Network with Successful REIs

Speak with fellow real estate investors. Join REI groups in your city. Here you can meet other investor minded individuals like wholesalers and contractors that can help you along your journey. It is essential that you connect with those who have more experience in order to get good advice. Make sure they align with your goals and strategy. Attend club meetings on a regular basis. Join online real estate forums like Bigger Pockets and read up on successful investors to see what they might be doing that you are not.

4. Learn from your Mistakes

Don’t make this mistake. Instead learn from others’ mistakes. Even the most experienced investors make mistakes. When a deal is less profitable than you intended it to be, take the time to make a thorough analysis of what went wrong.  Ask questions on real estate blogs to investors like what mistakes they made along the way and how they avoid those mistakes today. For a list of most common mistakes to avoid check out our blog on Why Flippers Fail.  

5. Implement Leverage

Think of  your real estate investment as an actual business. Don’t try to do all the work yourself. The point is not to have a second job but rather a second income. Become an investor. Learn to  LEVERAGE other people’s time to achieve your goals. Contractors, Realtors, wholesalers –you name it. Your goal is to invest in real estate not spend your spare time remodeling a house.

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Most Common Inspections

Termite–Most areas around the country will require a termite inspection. Termite control can become a costly expense  for your home owners if problems go untreated for years. This occurs because symptoms generally appear invisible to the untrained eye.  A termite inspection pays for itself with expense-saving prevention. http://homeguides.sfgate.com/home-inspection-termite-damage-2546.html

Septic–Not all homes will have a septic system; some will be connected to city sewers. Find out if there is a septic and have it inspected. Believe us, septic issues is not the type of crap you want to deal with when the buyers are ready to close the deal. Pun intended.

Whole Home –This is the big one. Major points include: The Structure, The Exterior, Roofing Inspection, Plumbing Inspection, Electrical System Inspection, Heating and Air Conditioning Systems, Home Interior, Ventilation, Appliances, Fireplaces. This can be a lot of information. What can you do with this data? Check back soon for the answers.

Structural — This one checks the foundation and supporting elements of a home like  floors, walls, columns and piers.  The important thing to keep in mind with this one is that if a buyer is not satisfied with the results he/she may terminate the purchase agreement  in writing and provide a copy of the structural inspection report.  Or the buyer submits a list of the problems discovered in the inspection and requests that the necessary corrections and repairs are taken care of  before the deal is closed, or adjust the price accordingly.

Radon--With The Surgeon General warning that radon is the second leading cause of lung cancer in the United States more and more home buyers are having this inspection done. Find out more at http://www.epa.gov/radon/realestate.html

Pool–If you have been keeping up on our Flipping Houses Series then you know about The Pool House. Pools when not properly maintained can be a true nightmare. Be sure if your potential flip has a pool to have it inspected.

All of these inspections for houses you are trying to flip are a great way to leverage the expertise of others. The point of inspections are to make your house safe and worry-free for your potential home owner. Having others do routine inspections for you will save you time in the long run. If inspections are done right in a timely manner, you will be able to forgo any potential problems at the closing table.

Be sure to check back later in our Inspection Series for a more in depth look at each of these inspections.

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