Flipping America 168, Real Estate Legal - Flipping AmericaFlipping America

Expected Air Date: 07/12/18

Opening

As general counsel to some of Texas’ fastest growing companies, he is passionate about helping entrepreneurs focus on the success of their business by providing strategic guidance and legal counsel. He serves as outside general counsel to various small to mid-size companies in all areas of business law, including real estate and construction matters.

Here’s a cool thing – you can kinda pick his brain too – because Ben is a blogger. He talks about issues important to us as investors. I spent some time on his website reading his blog and I can tell you it’s recommended reading. Some of it is very eye-opening. That’s at dwlawtx.com.

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Lunch with me every Wednesday.
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real estate legal resources

http://www.dwlawtx.com/blog/

Guest: Ben De Leon

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Motivational Thoughts for the day

When you want to succeed as bad as you want to breathe, then you’ll be successful.
Eric Thomas

Would you like to just sit down with a lawyer – off the clock – and pick his or her brain about real estate and business issues? Today you can. Well — today you can, vicariously anyway. Coming up in a few minutes I’m going to interview a real estate attorney from Austin Texas, Ben De Leon. He is the President of De Leon Washburn & Ward, P.C. (dwlawtx.com), one of Texas’ most storied independent law firms. As general counsel to some of Texas’ fastest growing companies, he is passionate about helping entrepreneurs focus on the success of their business by providing strategic guidance and legal counsel. He serves as outside general counsel to various small to mid-size companies in all areas of business law, including real estate and construction matters.

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Transcript

[0:00] Music.

[0:28] Time for flipping America the show that teaches you how to make money in real estate or wherever you are whatever your situation there is an opportunity for you.

Flipping America is brought to you today by Braswell Capital Solutions commercial lending made easy

on the web at Braswell Capital solutions.com and now here’s that flipping America guy Rodger Blankenship.

[0:56] Thank you Kathy Curtis hello everyone how’s it going out there it’s a great day to be investing in real estate because the real estate market is strong

everywhere of course it’s a great day to be investing in real estate even when the market isn’t strong he just have to know how to do it and that’s what we’re about here flipping America to help you in any kind of Market

and the information the facts the stories the the trends demographics whatever it is you need in order to make great decisions about your life and real estate investing now I want to say right off the bat,

that we don’t encourage everyone to drop what you’re doing start flipping houses like you see on TV,

it’s not for everyone but we do encourage everyone to everyone I mean everyone listening to my voice and everyone who is not listening right now to consider real estate

part of a balanced Investment Portfolio you need to be involved in real estate in some way so please give us listen and consider.

And if you’re thinking about actively involving yourself in real estate you owe it to yourself to listen to the show would you like to sit down with a lawyer.

Off the clock and just pick his or her brain about real estate and business issues well today you can.

[2:08] Vicariously anyway coming up in a few minutes I’m going to interview real estate attorney from Austin Texas,

Ben de Leon he is the president of De Lyon Washburn and Ward PC one of Texas’s most storied independent law firms.

As general counsel to some of Texas’s fastest growing companies he is passionate about helping entrepreneurs focus on the success of their business by providing strategic

guidance and Lee

legal counsel he serves as outside general counsel to various small to mid-sized companies in all areas of business law including real estate and construction matters now here’s a cool thing.

[2:47] You can kind of pick his brain to because Ben is a blogger I don’t know how he finds the time but he post stories on their website DW law tx.com that’s DW law

tx.com and we’ll say it again a time or two during the interview he talks about issues important to us as investors like I spend some time on his website reading his blog and I can tell you

it’s recommended reading very eye-opening,

and SD wltx.com don’t go there right now especially if you’re driving but I’ll make sure you check it out later on and of course if you’re listening to us on the flipping America app that website will be in the show notes

how to reach us here at flipping America you can always reach us at flipping America network.com what you got some new and exciting stuff up on the page about them internship and.

[3:40] People are rioting in and saying hey aren’t you talking about them internship and I want in there’s nothing on the website well yeah okay sorry my team is spending so much time running down the the deals that are coming in the office we’re just a little bit behind on the

posting but I’m working late and catching up

and you know in a few days I’ll be caught up but go to flipping America network.com and I’ll write on the front page you should see something about the new Minturn ship program doesn’t matter whether you’re in Atlanta or anywhere in the United States you can be a part of the mentoring interning program here at flipping America you can learn this business while you go and you can earn the money to pay for your

mentoring while you’re,

Deep by working deals in the business for one of America’s most dynamic real estate investment companies and that would be us.

[4:33] Get my own humble opinion alright you can find us on,

social media flip on Facebook look up flipping America media on YouTube we have a channel the statistical flipping America we’re on LinkedIn or on Twitter and Instagram at flipping America we have a profile on house

oh that’s Houzz. Com we are on Pinterest so much going on

and so many things happening in so many ways to contact us if you want.

[5:02] We answer questions and hopefully we’re going to get to some questions today after the interview and I want you to know you can send your questions to questions at flipping America Network,

comes we answered 100% of the questions that come in not all of them on the air but every question that’s ever come into the show has been answered and we try to give those a little bit of a personal touch so go ahead

take a stab at it right us a question since your question and we might even answer it on the air.

But we will answer it when were the other now a lot of people don’t really want to do the email thing or don’t have the vision for it or the patience and that’s okay we understand that you can call you probably still know how to use a phone right.

You can call 404

369-1018 extension 1 that’s the national comment line leave your message in question for us there we will check it and we will get back with you will answer your question now if you got hit extension to.

[6:00] You’ll be talking to marry and you could be talking with her about the mentoring program probably shouldn’t said that the phone might be ringing off the hook.

7 ounce mints the second Thursday of every month we have a big networking party here in Atlanta called flipping Atlanta,

it’s the local chapter for flipping America and its a wonderful time to come out and network with other investors there’s food and drink and also a topic and a speaker and in July are

talk in this July 12th in this actually if you’re listening to us live right now you’re listening on the morning of July 12th and so.

[6:39] From tonight’s speaker is Tony lukashevich Tony is the Atlanta coach for the flipping America mentoring program,

he has done a couple hundred deals he buys 325 houses every month he gets all of his deal flow and does all of the all of his analysis using free tools on the internet very clever and he’s got a system around this and he’s,

and he’s working with our Atlanta operators and teaching them how to use it and he’s going to show all of his secrets and that’s tonight.

Flipping Atlanta and you can get more information about that on Meetup

dot-com flipping Atlanta and Gwen join the group and you’ll find out what’s coming next yours truly is the speaker next month I’ll be talking about how to invest in real estate using your self-directed IRA and coming up in September weave.

Permit

expeditor what’s a permit expeditor when I’m trying to get him to agree to come to be on the show but when you’ve got a job and you’re in a major metropolitan area and you need to pull permits

you probably want someone like a permit expeditor it’s worth the extra that you pay to get to work on your job a month earlier or two months earlier than you would if you didn’t use an expeditor so all that and more,

so much more make sure you download the flipping America app so you can listen to show anytime you want.

Hook it up to the Bluetooth in your car and you can just listen to us all the time we’ll be back in just a minute.

[8:03] Music.

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[10:02] Music.

[10:24] I’m on the phone with Ben de Leon Ben welcome to the show thank you so much for having me I appreciate it.

Thank you for taking time from your busy afternoon there and I know I’ve been on the receiving end of attorneys billing time and so you’re giving this time today is very much appreciate it and I know my audience appreciates at 2 so.

How about we begin by giving us kind of the the State of Affairs was real estate as you see it in Texas you’re in Austin right.

[10:55] I’m in Austin Texas and my goodness.

It’s booming and in Austin and it’s it’s booming elsewhere in Texas there is plenty of development on the residential and Commercial side check oil in Austin I mean.

I was born and raised here my parents were raised here and the skyline downtown looks nothing like the skyline I grew up with.

If your if your born and raised in Austin Texas that means you got to be a Longhorns fan.

[11:29] Oh absolutely UT undergrad and UT law school is there anything else you could possibly wind up being

there’s some people wind up being something else but not me I bleed orange so you know I’ve been a lot of places in Texas and I haven’t been to Austin but you’re my third guest from the Austin Texas area I’m going to have to get out there and.

And see what’s going on now when you talk about the market being hot you’re talking about resales what’s going on with new construction as as you see it.

[12:00] Why would new construction what we’re saying in Austin a lot of multi-family development and in terms of Apartments Condominiums.

Smaller built houses there is definitely new construction going on in terms of your you know your single-family developments but a lot of what we are seeing in Austin is.

Building in the urban core and development like I said more the multi-family.

Why is the why what we’re seeing are you seeing much in the way of starter home type of development for some home buyers.

[12:42] Yes I did I think that what what happens in terms of a starter Home Market is.

What has happened in Austin in the metropolitan area is become greater and greater so the further out you get from the you know the urban core downtown Austin.

Are you going to see more starter houses further out yet particularly you know Hays County

you know up until computer bill down and Round Rock all the way up to Cedar Park you know there’s a lot of a starter home about with their Geography about how far out of the city center of those suburbs just mentioned.

[13:24] Sure you’re talking about um anywhere from you know anywhere from 15 to 30 to even 45 miles out okay

alright so it’s a little spread out then some of the Denture urban areas in East Coast where where on the air and its Texas right.

It’s taxes and yes that’s right now.

I don’t have a rigid scientific study behind me here but I get out and about and I talked to builders in our area in Georgia and Builders are getting back into the business but

the builders around here that I talk to are avoiding the starter home construction not because they hate it but

they can make more money with an upgrade home or a second time home buyers home or a little bit more expensive house their margins are better and their degree of difficulty is about the same and they’re just referring to be there

show around Atlanta we’re not seeing the starter home construction that I think we need to kind of get our,

Market back to a balanced between buying and selling.

[14:31] But you got your not you you’re seeing some starter homes going there in Texas.

[14:38] We are saying starter homes coming in taxes and like I said I mean there’s not very much area in in.

[14:47] In downtown and got of your what was traditionally known as Austin as I was growing up and what has become,

known as Austin and now like I said that the further out you get the more starter homes that you will find.

But I will but I will say toward your point.

[15:08] That trying to find a good contractor and in a contractor that you know that knows his or her stuff.

Yeah they’re going to go for that one link hanging fruit and you’re seeing a heck of a lot of remodels Renovations and upgrades because what what’s going on in Austin and a lot of the areas that have been developed.

Some of these houses were built in the 60s 70s and 80s you have a lot of.

Imports from California from the east coast and end in from other areas that are looking to refurbish those homes and to upgrade those home so you’re saying a lot about 2 in in in.

Let’s let’s talk about it about your website is the resource I really want to point of this news to its DW law tx.com.

Your Law Firm tx.com DW law tx.com I was poking around on there earlier and reading some of your blog articles it’s amazing set of resources from a law firm

just to provide to the general public what’s the thinking behind that what’s driving you to to do that because your block cuz it was very informative and then lightning to me.

[16:21] I appreciate that I’m in the main the main focus is to is to educate people.

Write similar to what you’re doing wish I have a great appreciation for and to let.

Consumers attentional clients and just people who want to know more about real estate know about the current status of Real Estate.

Know about the fact that you’re in Texas general contractors for instance not a license to understand the ins and outs of title insurance.

What might happen in the event 02.

Foreclosure and potentially investing in foreclosed properties so on and so forth it’s an education tool you know that the better educated that we can make.

You know our current active clients and anyone who has an interest in the areas of real estate and construction I think the better off we are you know Frank we as a society

yeah and I really think if they’re Real Estate Investors listening especially in Texas you want to go to this site because there’s a ton of information are useful for you

as an investor in the state of Texas who does the closing is it in tourney or is it a title company.

[17:32] So more often than not it’s going to be a title company what we have in the state of Texas a lot or are we have title companies and then a a law firm that.

Is right next to that title company that does the preparation of the documents for more often than not the CAA Child Company in.

Okay we got to go to a break when we get back you do mention a few topics I already plan to get into the need for title insurance the foreclosure process in Texas.

And also this whole thing about the contractors I want to hit all of those real quickly when we get back alright this is flipping America.

[18:14] Music.

[18:28] Do you want to learn how to flip houses I want to show you how to flip houses and there’s probably no one in the country better qualified than me to show you I flipped hundreds and hundreds of them.

And I also have some training and degree and experience and education so I could show you how to do exactly what I’ve done hundreds of times don’t believe me.

Head on over to put starter event.com but in the meantime Give a listen to Pat caywood.

[18:54] Cleveland Tennessee and I’ve been.

Doing some flipping since about March of this year and had started with a Nationals program that was very expensive I spent today with Roger Blankenship.

Learning about his program and boy do I wish I’d met Rodger.

[19:16] He has a clear concise program and many tools that are going to be very hot.

[19:22] And starting and managing a program and the mentorship and Leadership and coaching that he saw frame are in value.

[19:32] Thank you.

[19:33] Music.

[20:25] We’re back he’s been I’m Rodger I teach people how to make money in real estate and Ben and his company are there to make sure that you properly protect what you’re trying to protect in your real estate transaction.

I don’t know what that fair enough I just made that up alright so title insurance.

Okay I don’t want to presume anything so let’s present let’s pretend that you have someone who is really young and green.

[20:57] Tell me what title insurance does am I to need it.

Absolutely so title insurance is your first line of defense to ensure that you have clean.

And.

You have a clean title to the property that you were buying and that in the event that someone or something comes along and says hey.

You know I have that property way back when.

Makes a claim to to the title on your property you got that insurance in print as a man’s of protection.

How to say no this is mine this is my title insurance policy and it protect me against any sort of defects in the title text me in the event that there might be some boundary disputes.

Text me in the event that leans get filed afterwards and so on and so forth so it’s your first line of defense.

What you were buying is yours and yours alone.

Right well I had someone comes and ask me the question and I’m really interested to hear what you say to this when I buy the property there’s lender’s title insurance why do I have to get title insurance too.

[22:10] No great question that’s a great question so they’re two different forms of title insurance there’s a lender’s title insurance that protects the lenders needs

I saw the mortgage company there is also owner’s title insurance,

that protects the owner himself herself or themselves so there’s two different kinds of title insurance and that is a source of confusion.

And I’m glad you asked that question understand that the lender.

The mortgage company is going to protect their interest you as the owner need to need to I need to have your interest protected separate apart from the lender because the lender is only going to protect.

The amount of the one you hopefully they off that loan.

And you remember you know you have. Title to the house well after the time you have that loan or even if not you know what you could have if you want to turn around and sell it your interests.

Some cells are protected under the owner’s title policy and even if a claim were to come pretty quickly after you buy the house where yours in the lenders interest a little bit more closely aligned the lender is going to use the title company to defend them and.

You’re on your own for your defense I’m all right that’s right that’s right.

[23:27] And so I wouldn’t even want to imagine having to hire a lawyer to do to defend a title claim When anybody coming with the title clean probably has something valid out there.

Did I know that the process of checking down the title in order to get to a closing as is checked and double-checked and so long. The title companies basically you’re just a license to print money

I still I buy Title Insurance on every property that I buy that I can now I buy some properties at the Foreclosure auction and you can’t buy Title Insurance there.

Right.

Be it because like Texas Georgia is a bye at the steps first Tuesday of the month got to have all your cash presents that that is the way it works in Texas right.

[24:15] That’s exactly right you just that’s what that’s right you can buy it if it stops the courthouse there to public auction and it’s you know.

Buy as is where is and after that you know it’s up to you so that’s right.

Right now we go to a title process here

and get an attorney to sign off of the title review so that we could buy Title Insurance once we got.

Once we receive the deed from the foreclosing lender but we usually don’t at that point because you know we’re pretty sure we’re clear and we’re not going to hold him long anyway we’re flipping these houses so.

Right right when you go to the steps it is the first Tuesday of every month in Texas.

I believe that yeah it’s the first Tuesday of every month and you know it’s an auction and Daisy the properties are listed and want a docket sheet.

And they are they are posted and normally what you have or substitute trustee sales so okay alright so the out it it’s a trustee sale in Texas right because your deed of trust state.

[25:26] Okay.

I’m such a little bit different than Georgia Georgia’s a mortgage State the effect is not really any different to us but if you ever been to one of these auctions watch what goes on.

Yeah I’ve been. I went to one a while back for a client yes okay did the buyers have to have all of their money in their pocket right then.

[25:48] Yes.

Okay that’s true in Georgia also not so much in other states but I know that Georgia and Texas are very similar in the way that they conduct the foreclosures but I’d like to ask you a little bit about.

They this licensing of contractors it’s baffling to me that in is in the great state of Texas which is a huge part of the American economy and population.

[26:14] Anybody if you don’t have to be license anybody can be you know putting up folding chairs and mopping floors one day and the next day have business card printed call himself a general contractor is it that easy.

[26:26] It is very easy Rodger and it’s. Scary you know I can go

I can go down down the street and claim myself as a builder if I want to and you don’t want me building your house I’ll stick to the legal.

Thank you you know everything else is licensed here it’s it’s you know HVAC technicians plumbers

electricians needed everything else except for.

Home builders and general contractors they do not have to be licensed.

And you know unfortunately other has been some some I’ve represented some clients who have been the victim of some some really sad stories but for the most part.

You know those are the exception to the rule but yes it is baffling but we do not have a we formally had the Texas residential construction Commission.

But I was sunsetted which means it it rode off into the sunset or Texas legislature said not it’s not worth it anymore and that was sunset it back in 2000 not so.

Yeah anyone can be can hold himself out or herself out as a built is there any kind of a trade Association or certification that you’re aware of that these Builders can use as some sort of credibility building piece.

[27:46] Sure. I’m sitting in the you know there’s a Association of homebuilders there are trade Industries out there that you know I would say lend credibility two of these Builders what I tell my clients and I wrote a Blog piece.

I’m on this on our website is you know ask for references.

[28:06] Yo ask for sulfur for evidence liability insurance do some digging have they ever been sued have they filed Wings you know do your homework

but yes sir trade Industries and another particular associations that do and credibility to to some of the more established builders

Joy is a couple other things we throw out as far as doing your diligence just for fun we go to the Secretary of State and see if this particular individual has had other corporations I learned this the hard way,

because I had a I had a a remodeler that just turned out to be a huge bust and there’s two kinds of bad in this business there people who are,

bad people,

and they’re people who are just bad at what they do and this guy was a little bit of both but he was a bad person come to find out he had had eight or 10

companies and some of them in file bankruptcy most of my being sued and he was doing business with us under another one that had been sued yet and so when we enter checked on that company they looked fine

so that’s one thing I know the trick that we picked up along the way is we go down to the local lime.

[29:20] By building department and see what other permits that they have pulled.

That they didn’t use on the reference form to us and we might just go knock on a door from somebody that they did work for.

It was not a reference just to see what they say.

[29:37] That’s a great idea but stand that’s a really good idea I like that,

yeah yeah but it does concern me do you know that there’s if there’s no licensing I’ll course you know the other side of that coin is government gets in involved in so many areas of our lives are your home inspectors license out there.

Yes you you have to be a licensed home inspector you have to be a little State appraiser everything else yes they do have to admit that’s funny because in Georgia you have to have a licensed general contractor if you going to pull a permit

okay but there is no licensing procedure for home inspectors.

[30:18] Interesting and so that people need to know an attorney in the state where you are now we can talk in general Prince.

I hate women long on the segment we got to go to break in your life for one more second then I will be right back.

[30:39] Music.

[30:51] Are you one of the 70% of Americans living paycheck to paycheck and tired of the stress if so I understand as I used to be in that 70.

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[31:11] How to find Freedom through real estate investing using a tactic that doesn’t require credit or tons of cash for a free training on how you too can do this please visit Brad camera.com.

Hey flipping America listeners have you ever walked into her property and said I have no idea what it will cost to repair this home those days.

[31:29] Music.

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[32:19] Music.

[33:08] We’re talking about.

The law in Texas and real estate all together my guess is Ben DeLeon and Ben thank you so much for taking time to be with us today I want to.

Ask you a question does a little bit more personal nature hear something I do on the show all the time with my guess and other reason is.

Those of us that are Real Estate Investors this is not one of those things that kids grow up dreaming they’re going to do.

This is almost always something that people choose in their adult life people ask me why I got into it and I said well it’s a combination of.

Desperation and no communicable job skills as a real estate investor when you are a little kid.

[33:54] What did you want to be when you grew up I wanted to be an astronaut and when I was really little and then when.

When I was probably I would say 7 or 8 I wanted to be I want to play professional baseball for the Houston Astros okay.

[34:13] I’m a huge Astros fan too and that that that didn’t come to fruition Maya and eye coordination is awful so that’s kind of limits your professional athletic career right now for what you guys did last year.

[34:29] That’s right that’s right all right so somehow or another your path took you to law school.

How did that happen.

[34:41] Well it happened because my father also practices law he said he’ll be 72 this year and he continues to practice comes in every day to work where and you know as a bow tie or tie and suspenders and so.

I watched him practice and he he was really good about giving back to the community as well our firm is really focused on a community service.

And so I had a really good model in my dad and then my my mom also did a lot of volunteer work and continues to do that.

And so I just you know I assume that hey I should be a lawyer and I should get back to the community and so here I am.

Okay that’s great I like it so

it wasn’t a mid-life in most people who are attorneys did not come into it in a mid-life late decision you know after horsing around for a good bit of their life like that people like me know I went straight through from undergrad to to law school and

I’ve been practicing over 13 years now so.

Alright so if you’re going to close with the title attorney in in Texas some kind of circling back around here I mean if you don’t go to the title company why does an individual need

an attorney a real estate attorney and the how do you fit into this process with the consumer.

[36:07] Sure so if you’re going to close with the title company depending upon the nature of the transaction a lot of times you got your you know you got your realtor you got your title company wind-up in the title company.

Find Drew its hand selected attorneys will take care of the preparation of the deed will take care of the recording costs and so on and so forth.

However.

[36:33] Where I come into play is if there are concerns that you might have relative to the title Commitment if their deficiencies or exceptions in the might show up on that if there are questions about the the real estate contract.

That’s where I can you know that’s where I can lend my services and sometimes.

Where I’ve helped is that my clients don’t want to pay the realtor commission.

And so they have me you know they have me draw up the contract and I handle that outside of the traditional realtor realtor process I have a good realtor friends.

And so

you know it however you want to handle it but that’s kind of ducks normally where I go where I come into play at their contractual issues if there’s some issues on the title insurance

I’m otherwise for the most part here in Texas the title company and is able to handle.

Okay and it seems to me if you sign a listing agreement that’s a binding agreement also known as a contract.

You gotta so it didn’t seem like you can get out of paying Commission on that.

[37:44] No not now to sign the listing agreement you’re not going to get out of paying a commission I mean to leave the client’s what I’ve represented I’ve been this is before the listing agreement signed like I said they don’t want it they want to do it under the owner.

And that’s where I’m I’m able to drop it off if you’re exactly right. A listing agreement.

You got paid on commission know you guys do some litigation there too if you need to write.

That’s correct we do litigation we do General business litigation and insurance face litigation basically any kind of commercial litigation we handle and also handle a real estate base locations

now I know in your bio.

They deep stuff that I’ve received in and red already in introducing you his things about your passion about helping small businesses and and working with entrepreneurs do you do some strategic

I don’t know consultation or Consulting.

[38:46] Yes I’m worried I know absolutely I mean I had that’s one of my passions is advising and counseling,

you know small business owners or people who want to get into or start up a business or want to sell their business entrepreneurial types they want to know what the best no potential business structure is for them.

And I really like a coordinating you know.

[39:12] More than more than you know just sent up the business you know do you have a good accountant what kind of insurance coverage do you need.

Have you thought about you know the next five to 10 to 15 years and I like to map out those sorts of things with the.

Widow’s Clash of Clans I really enjoy doing okay and you just you’ll do that for like a asset fee.

[39:34] Yeah I mean my consultations are free and then if if the you know if those that the client wants to move forward obviously get a signed engagement letter under the.

Are ethics rules to Texas rules of professional responsibility and then I yeah I usually have a set price or a different packages or different projects if they want to move forward with great in your business doing contracts or whatever am I.

Okay so is your email what is your what’s the best way that people can reach out to you if we special if we have listeners in Texas right now who want to connect with you.

[40:12] Sure our office number is its daily on Washburn and Ward is in the name of our Law Firm but I’m the president.

Number is 512-478-5308.

And my email address is Bea de Leon b e b e l e o n at DW law tx.com.

All right I think everybody got that Bea de Leon at a reminder to turn your phone off when you’re conducting a radio show

Bea de Leon at GW law tx.com excellent resources on the blog things that everybody everywhere ought to be looking at and if you’re ready to sit down and talk about stretching your small business

Ben is the man to call and I wrote down the number hurdley now I can’t read my writing give that number one more time.

Sure office number is 512-478-5308 okay.

I had a ride I just couldn’t read I thought yeah okay then thank you so much for joining us today here on Flipping America and that will talk again soon sounds great thanks for having me Rodger I appreciate it.

[41:28] Music.

[41:36] Not too long ago we did a one-day flip starter in Chattanooga Tennessee and low and behold one of my old College friends came out to the event his name is Peter Faulkner and here’s what he had to say about the event.

[41:49] Peter Falkner here I tended a one-day flip starter training session led by Rodger black.

And I was amazed to see what has happened in Rogers Live from the last.

Plus years flipping over 800 houses and then this one day training he told how he did it and what the pitfalls the blessings the benefit.

And how to do it and I was so impressed with how well organized and how smooth the training went today.

You’re tempted or in courage to go so it was not a bad price and if you get a chance to do it even just to consider investing.

But I just want to thank Rodger for a great day to die and priest.

[42:32] Music.

[42:49] Every Wednesday here in Atlanta we do a networking lunch if you’re ever in Atlanta on a Wednesday.

I would love it if you come out and join us it’s always a thrill to me for someone to show up

and just yesterday we had someone show up who’s been listening to the show that actually live in working downtown Atlanta and they found the show and they were a little surprised that they could come connect with us locally and we had a wonderful conversation and so that’s always great

but if you’re traveling and you happen to be in Atlanta on a Wednesday we would love to see you and tell you what if you’re from some other state than Georgia and you come up to me at lunch and tell me that you

Curtis on the show and that’s why you’re there then I’ll buy your lunch how about that and get whatever you want it’s Tex-Mex place we love the food

is a huey luey’s in Sandy Springs and we always have a good time talking real estate and we let the people that are there.

Kind of set the agenda I mainly go just to have lunch and you know goof off with some friends for a little while and just chill and

eat some good Mexican food but we’re there also to help people grow their business and understand a little bit more about real estate and so we let people submit questions and I’ll take a few minutes usually to answer them

so today I’m going to lead our listener question.

[44:06] The question segment with the three questions that we got yesterday from the lunch one of them is his from rent from Atlanta Georgia I am a licensed general contractor and Builder how do I find an investor / money partner

okay well the answer this question is first of all right at the beginning of our show

Braswell Capital Solutions one of our sponsors here at flipping America Braswell Capital Solutions has money available to you for whatever your need is and although

it does take a little bit of money to get into a hard money loan

Braswell has a program also that can get you unsecured funding that you can even use so that you don’t come out of pocket at all for your project now,

this is kind of yucky I kind of got to know what you’re you’re doing here and you got to know your numbers but one of the things I really appreciate about Michael Braswell and his team is they’re not going to let you make a big old mistake

they’re going to run the numbers on your deal before they even really start to underwrite it they’re going to run the numbers and they’re going to tell you if the deal just isn’t going to work

they’re going to tell you if you’re not going to make money there are a lot of people running around calling themselves wholesalers and they’ll sell you anything

without a whole lot of regard they know the formula of they know what the formula to be but when it comes to the after repair value in a repair value lot of times they’re just making stuff up to make it fit the formula.

It doesn’t necessarily mean it’s true Mike and his team do a good job of vetting the property.

[45:35] I’m making sure that you’re not about to basically shoot yourself in the foot.

[45:42] Tony submitted this question from Atlanta Georgia looking to get funding soon for my first flip all right

spell that’s a little bit of a different proposition red has a lot of experience he’s a general contractor he’s built a lot of things and then he’s getting into fixing and flipping houses but he is an experienced person and has a lot of track record Tony does not that makes it a little bit

different and just a little bit more of a challenge.

The reason for this is simply because Tony doesn’t have the experience and lender is going to look at him and say no I don’t know if I’m going to take that risk.

Well happy to let you know Tony that might Braswell and his team will take a risk on the first time

investor and they’re going to also give you a little bit more guidance to make sure you’re doing the project right even in what I really like to see you in when I said yesterday to Tony was I’d like to see you get

someone to walk with you and to help you offer to give them a little bit of the prophet and do something to partner up and and maybe.

[46:43] You’re going to if you need somebody to help you with the down payment or that sort of thing maybe there is some partnership that you can do.

But make sure when you offer a partnership to someone you’re bringing an equal share to the table if you want equal share of the profits because they’re you know percentage in percentage out when it comes to.

Partner in a real estate deal and I told a story yesterday about someone who came to me and wanted to partner with me on a deal

and what they wanted me to do was find a deal and put up all the money for the deal and then they would drive by and check on it and make sure that it was working and I could show them some things about how to do it and then we split the profit 50/50,

and everybody

understood that enough to laugh because that’s not a 50/50 partnership that’s me taking all the risk and they actually taking more Risk by trusting some of the responsibility to someone whose brand and actually creates more work for me

cancel.

Needle said we didn’t do that deal alright one more question from yesterday’s lunch and unfortunately we didn’t get a name and I I really.

I like to say the person’s name here so I’m just going to make up a nameless a Monica I don’t know why would the seller have a no disclosure on their property.

[48:03] Okay I might word that differently but why would there be no disclosure.

And they’re really it really comes down to two reasons reason number one the seller is a recent owner or an investor and they don’t know anything about the property this is always true if you’re buying a property from a wholesaler they just don’t know

but even for me as a Fix and Flip investor I usually haven’t held the property more than three to five months and so when it comes to talking about it would they ask questions on the disclosure has it ever has there ever been this or that.

[48:37] And I can’t say because I don’t know the long history of this house now it’s some houses that are prone to Marin

in or near flood zone we will sometimes pull a report from the insurance company that kind of tells us if there ever been any claims on the properties but we don’t do that all the time we only do that if we’re suspicious about some other things,

does the clue report by the way, but most of the time when we sell a property,

we are asked to do a disclosure and I’ll do it I will comply because I want to be cooperative this just who we are and how we operate but,

I have to answer I don’t know on a lot of the questions

and so this not particularly helpful so so one reason they may not want to do a disclosure is because they don’t know anything if it’s a wholesaler,

they haven’t probably even taken ownership of the property they have Equitable Title to their contract but they don’t own the property and so they wouldn’t be in a position to answer the questions anyway

no the other reason is a little bit more nefarious the other reason somebody wouldn’t want to do a disclosure is

they have something to hide and then if this is a long-time owner-occupant and they won’t do a disclosure then,

at that point my caution flag goes up and I’m hiring a license.

[49:57] Or if it possible a professional home inspector to come and look the property over thoroughly to see what it is the homeowner might be hiding

occasionally it’s just you know the

the disclosure form has multiple pages and it takes a little while do it occasionally has somebody who’s just a little cantankerous and they don’t want to because they don’t want to but

if they don’t I’m definitely hiring in the Spectre and yes I’m an experienced investor and I know how to look at a property myself

inspectors get in the crawl space get in the attic and look everything over and at my age and my size

I’m not getting along with that if ladders and crawl space is very much so I’m happy to pay them the $350 or whatever it is to do the home inspection for me and that is as good as a disclosure

alright this person had another question to will get to that on the other side of the break.

[50:52] Music.

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[52:45] Music.

[53:03] Okay the unnamed person I think we called it Monica before I had another question repair cost formula

is there such a thing when I got that question I showed it to a couple of people on my team that were at the lunch and we all thought that was humorous I was almost like it was a setup repair cost for me on so I just stood up and said the answer to that is yes next question.

Just joking around there is a repair cost formula.

I like to think I invented it in fact I’ve never heard any other anyone else talking about a formula like the one that we have but if you’re a long time listener to the show you’ve heard me say it and you know I take a little bit of ribbon from my various marketing coaches that tell me I give away too much information for free that’s okay

we’re here to help you and so here you go you’re ready got your notes out now if you’re driving don’t take notes please keep your hands on the wheel and your eyes on the road but.

[53:58] You can listen to this little bit later on and write it down and put this into a spreadsheet if you want to that makes it very helpful.

The thinking here is it takes about $100 a square foot

to build a house that’s mostly true anywhere now that’s considering average finishes and you can probably get it done for a little less if you already own the land but

the math is easier okay so we start with $100 a square foot and when we go to rehab a house we figure we’re going to replace about,

25% of the house so you know we’re going to do just your basic kitchen remodel bathroom updating floors paint

gym carpet or whatever it is and the fixing what’s broken that’s about 25.

Percent of the house so therefore we start with $25 a square foot.

If you know the house has thousand square feet then you can start with $25,000 for every pair cost but.

We found after really we spent several months trying to come up with his formula we found that that wasn’t really accurate in all cases that older homes tended to need more and so we added this in Plus.

$5,000 for every 10 years of age.

[55:09] And so if it’s a 50 year old house that’s a thousand square feet and you’re not adding square footage then it’s $25 a square foot

that’s in the house the way of the house is in Fairly good condition $25 square foot that’s 25000 plus another $25,000 cuz it’s 50 years old

so you’re looking at a $50,000 rehab budget right out of the box is it always accurate no,

not really but it’s surprisingly accurate especially if you spend a little bit of time thinking about a couple of other things number one if you’re adding square footage just at $100 a square foot for whatever square footage you’re going to add.

That’s a safe number number two.

[55:52] If the property is in great shape you may want to have a smaller number than $25 square foot if people are living in it and if they’ve updated it and and maintain the house well and it’s in really good shape and you don’t have to do a whole lot you may go down to 10 or $15 a square foot

this is where you have to use your judgement

if on the other hand the house is in bad shape you may go up to 40 or $50 a square foot if you’re going to take it down to the frame,

and put new walls interior exterior insulation new electrical new Plumbing new everything then you need to take that number to $80 a square foot and at that point though you may not need to worry about

you know the extra money for the Mechanicals in the reason we did five thousand for every 10 years as you know things in the house is kind of go bad every ten years after the first 10 years it’s h v a c after the next 10 years you may have a roof and then fears I are going to have another HVAC but you know if your.

Rehabbing a house you’re only going to do a CAC one time so that’s why the number

kind of works and if you put a little bit of thought into additions and and the condition of the house then you’re going to be able to drill that number down and you’ll be amazed that sitting at your computer at in your office if you’re going to be able to do rehab estimates that.

[57:07] End up coming in pretty close to the mark now we’re just about out of time for the day I don’t think I have enough

time to do another question Justice and so I I want to follow up a little bit because I didn’t run out of time the other day when I was talking about them internship program you can go to flipping America network.com forward from internship or just go to the main page and click on the internship link on the front page and you can get some more information

and I have there.

A video testimonial from Connor one of our interns and then a written testimony from Cheryl the other intern who really just didn’t want to be on camera that’s okay.

That we don’t force anybody to do anything around here.

[57:47] I I think you’ll get the idea from these two that they have benefited very much for being around here and it’s only been 6 weeks folks and they’re they’re on it and into it learning growing,

having a great time and I want some more I want some more of you to join the program but keep in mind

I’m limiting it to about 10 per month at least 10 who are going to be putting time in the office if you’re not in Atlanta you can still be a part of them internship program you can do the work from your computer you can join our meetings virtually

you can be a part of the team you’ll be at a disadvantage because you won’t be able to go knock on doors and talk to people but will have you up and going and talking to people on your own.

I’m pretty soon okay that’s all we got time for today folks will see you again in a day or two.

[58:34] Music.

[58:51] Eric Thomas said when you want to succeed as bad as you want to breathe then you’ll be successful.

[58:59] This thought is brought to you by the foundation for Renewal working together with communities to change lives find them on the web at renewal fun. Net and is always your gift in any amount is both appreciated and tax deductible see you soon.

[59:14] Music.