Flipping America 176, Listener Questions and NewsFlipping America

Expected Air Date: 8/11/18

Opening

We love listener questions. Keep them coming to questions@flippingamerica.net. We answer them all and some make it onto the show.

We are going to take some time today to open the mail and answer a lot of your questions. Thanks for writing in and keep the questions coming. As always we answer every question that comes in and some of them we set aside to answer on the show.

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Announcements:

Lunch with me every Wednesday.
Thursday August 9th, speaking at Flipping Atlanta “Investing in Real Estate with Your Self-Directed IRA”
Tuesday August 14th, speaking at Catalyst, “Contractor Impossible”
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News!

Listener Questions:

Questions@flippingamerica.net Tell us where you’re from!

Ellen, Villages of Ocala, FL, “We are trying to maximize the returns on our self-directed IRA. We started a little late in the game and don’t really have enough money in there to buy and flip a house. Any suggestions?”
Karenza, Long Beach, CA “I want to dive into buying rental properties here in southern california. My question is, am I too late?”
Britney, Penn Hills, PA “My husband and I are finishing up our first flip — so exciting! We are having a discussion about interior paint colors. Our property is in an area that has a lot of investor activity with trendy styles and colors. I want a bold color scheme, but my husband wants builder’s beige. Can you settle the debate?”
Wally from Aurora, CO “I want to invest in the marijuana industry. What are your thoughts?”
Allie, Milwaukee, WI “I’m looking at an older home – about 50 years old. In the basement, the wall is cracked and bulging out just a little. The bulge is about 5 feet off the floor, and it’s no more than 2” out of plumb with the wall, but the entire wall is slightly displaced. I looked for cracks in the walls upstairs and didn’t see any. The seller told me they completely remodeled the house 10 years ago and tore out the plaster walls and put in new drywall. This could be a nice profitable project but how concerned should I be?
Frankie, Manchester Maine, “You seem to buy just about anything. What are things you DON’T or WON’T do?”
Suzanne, Tampa FL “How do you do your show three times a week, post on social media like nobody’s business, teach house flipping, make videos AND run your business? I’m not trying to challenge you. I really want to know how you do it?

Motivational Thoughts for the day

“Dreams will get you nowhere, a good kick in the pants will take you a long way…” Baltasar Gracian

Transcript for Listener Questions

[0:00] Music.

[0:28] Time for flipping America the show that teaches you how to make money in real estate 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.

[0:48] And now here’s that flipping America guy Rodger Blankenship there how was your week.

[0:56] Did you make some deals did you make some offers

if you didn’t make any offers they probably didn’t make any deals right I am Roger Blankenship and I teach people how to make money in real estate and.

We don’t encourage everyone to go out and drop what you’re doing and start flipping houses like you see on TV that’s fun and everything but it’s not for everyone we do.

Encourage everyone.

To have real estate as a part of a balanced Investment Portfolio and to that end we try to bring you the best information news statistics

research studies demographics Styles Trends whatever we can to help you make a good decision

I love to talk with people who are in the business and making it happen and we do that quite often here on the show but sometimes we just need to

take a minute and catch up with what’s going on in the world of real estate and that’s what we’re going to do today

I got a big stack of questions from our listeners and we’re going to try to get to all of them and get caught up today because I know some of you have written the show and you don’t have an answer from and she asked and you’re wondering why he always promises he answers all the questions and that’s because we’ve been holding on to your question do we had some time to answer them and we just need to take a few minutes and answer your questions we’re going to dive right into that

I want to remind you that every Wednesday you can come out and have lunch with us me the flipping America guy I’m in town in Atlanta almost every Wednesday.

[2:21] Occasionally I’m traveling and not there but that’s pretty rare and that’s one of the reasons we selected Wednesday and I’m almost always home on in the middle of the weekend

I eat lunch almost every day yeah there are there’s a time or two that I actually get so busy I forget to eat.

Make it a point to eat on Wednesdays and we go to Huey luey’s Mexican restaurant on Roswell Road in Sandy Springs and we just invite anybody to come out

Huey luey’s is gracious and kind enough to give us the entire room upstairs for whoever shows up whether it’s 5:10 or 40 and we’ve had all of those numbers we’ve even had a few as to does it really matter I’m going to eat then I’m going to talk real estate with whoever’s there and it’s just

really is just designed for us to get together

people come with questions from time to time so we take the time to try to answer those questions and I’m not the only one with answers we have the the great and famous Gordon cats who comes almost every week Gordon has been investing in real estate

longer than I’ve been alive

he is a genius and so experienced and so knowledgeable and I we often turn to him I put him at the head of the table so he can answer the questions.

[3:31] People bring up and he allows me to pick his brain and and I really learned a lot sitting in his feet so always glad to have him there sometimes down to Rosa from Atlanta

drops by and visit with us and he’s he’s very active and not had him on the show a couple of times just talking about all of the things that he does so much to learn from each other as we get there

plus you get an opportunity to meet people who are doing the business or getting into the business and people who provide services for the business such as insurance lenders.

[4:03] All kinds of people show up at lunch so.

Make it a point to come out and join us 11:30 to 1 every Wednesday Huey luey’s Roswell Roswell Road in Sandy Springs now that’s if you’re in the Atlanta area and here’s the other deal I make with you if you’re coming in from out of town.

Now I would be amazed and really flattered if you came in from out of town just to come to the Wednesday lunch but if you’re in visiting from

anywhere in the United States if you’re from out of state and you tell me that when you show up at Huey luey’s for lunch I’ll buy your lunch

okay lunch is on me because it just kind of gives me a thrill that you heard about us on the show and you decided to stop by and and introduce yourself we had them from as far away as the Caribbean California and Canada

and we’re glad to see anyone at anytime and help him out if we can because that’s what we’re all about.

If you want some online help for your real estate business you can send questions to ask questions at flipping America network.com we don’t know everything we don’t know the answer to every question that comes into the show but we

I know a lot of people and so will find the answer and will connect you to the right resources on our website.

Www flipping America network.com when you come to the website do you have an opportunity to press a button to schedule a a free strategy call for your business you want to know more about being in the business.

[5:31] In this called we ask you some questions about what it is you’re trying to achieve and.

What training you’ve had and try to help you set some goals and try to pass and go forward this is a completely free service this 30-minute call comes right out of our time and our day and we’re happy to do this for you know this Lots fill up

very quickly and.

My team and I spend a good bit of time on these calls and really it’s just a way of giving back and listen

I did you hear what I said I take some of these calls and so you schedule to call you might even be talking to me it happens from time to time.

So you can go to I’m flipping America media have I’m sorry flipping America network.com and there’s a ton of resources there this show gets posted there and all of the show notes are there there videos there other things pop up from time to time and end

and show up you can also follow us on social media what you should do Facebook

I come / flipping America media Twitter and Instagram at Living America.

We’ve got a YouTube channel where some of our interviews get posted where on LinkedIn house Pinterest Google Plus You Name It We were there and if you don’t do any of the Social Media stuff you can always call us and I we’re always glad to get

the calls and you often find me driving home in rush hour returning calls that have come into flipping America 404-369-1018.

[7:00] Extension 1 to leave your message your question and if it’s a question that we can answer on the show will do it but you will get an answer and you will get a call back

now as you can imagine we have quite a few calls and and there’s there’s a lot going on here so it may take us 24 hours to get back to you but we will get back to you and answer your question or return your call

thanks again everybody for listening and for your support and let’s just Dive Right In I’ve got a bunch of new stories lined up but let’s dive into the questions now the other day

as I was

wrapping up the show I felt like I didn’t give Allen enough time to answer her question so Ellen I’m going to carry you over of course you didn’t have to stay on hold for the last couple of days.

Ellen from The Villages of Ocala Florida Road in and said we are trying to maximize the Returns on her self-directed Ira we started a little late in the game.

Don’t really have enough money in there to buy and flip a house any suggestions and the answer is yes and I’ll give you those suggestions as soon as we get back from this break will be right back.

[8:08] Music.

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[10:12] Music.

[10:30] Okay that time we got interrupted by the break but Ellen here we go.

You’re trying to maximize Returns on your self directed Ira started a little late in the game don’t really have enough money in there to buy and flip a house any suggestions there are several suggestions now you need to speak with your IRA administrator or custodian about some of these possibilities because some of them operate with different rules but one of the things that

you can do is you

you cannot do business with yourself or anyone in your direct family and again check with them but you can partner

with your self so your IRA can put up some money and you can put up the rest of the money whatever percentage in is the percentage out so if the IRA puts up.

Nights at 10% of the money and and you put up the rest of it then

the IRA can only pocket 10% of the profit here’s another thing though the IRA can borrow from like a hard money lender or private lender the IRA can borrow the money and if the IRA has enough money to

you don’t carry the loan and and the expense of it then all of the profit can go

back into the IRA there’s a couple of ideas then other things you can do can do or look for cheaper assets to buy such as but not limited to Roland.

[11:52] Cheap property properties getting on loaded real cheap lie all the time vacant Lots

this is the next technique I’m going to suggest to you is if you know a little bit about investing you can actually use your money as the earnest money for a wholesale contract and you would be

your IRA would be the buyer on the whole show contract but then you assign that contract to someone else for a 5 or $10,000 fee and that fee can go into your IRA that builds it up

next you can do what’s known as an option swap.

For this you will need a trusted friend someone that you can rely on to do what they say they’re going to do and

let’s say that you outside of your IRA are flipping a properties and you’re going to make it let’s just say you going to make $40,000 and your friend at the same time as a property and he or she is going to make $40,000.

[12:51] You agree to buy an option on each other’s property now you’re going to buy your option with your IRA money and your friend can buy their option with naira money but you’re basically trading options so.

You’re going to basically buy a $20,000 piece of their profit but you going to do it by exercising an option and it gets recorded at the courthouse and they’re so therefore when that person goes to sell their property

they’re closing Law Firm is going to call you and ask you what the payoff is on the option and it’s $20,000 or whatever amount you agree to and that money goes into your IRA so $1,000 option you buy for a thousand could become $20,000 and that

books that 20,000 into your IRA now the only way this really works is if you know you’re going to give the same to your friend by giving them an option.

We’re selling them an option on one of your properties to but you can do this 2 or 3 times and and pretty quickly you’ll have enough money to flip a house

and your IRA pretty cool.

[13:57] Now I wanted to get to this next question because I’ve never seen this name before carenza carenza is from Long Beach California and I’m assuming carenza is a she she says I want to dive into buying rental properties here in Southern California.

My question is am I too late well that’s kind of a loaded question.

The answer is you’re never too late to get into the game as long as you buy the property right I’m afraid though and from what I’ve seen in most of southern California there has really not any time in recent memory been a good time

to buy rental properties and that is if you want to make a decent kind of return

rental property is all about the cash flow and I know that the lot of people want to buy a nice property that they can drive by and look at and they can take care of it and they

Envision themselves you know planting flowers in the garden to make it more attractive and looking after it and that’s where the thing and really take just you just kind of trust me on this that’s not what you want what you want is a small.

Preferably all brick or some exterior that doesn’t need to be painted often or ever and.

[15:11] He wanted to be small because that way the repairs will be

less expensive if people move out you wanted to be in a good solid neighborhood with decent schools you’re not going to be in the best neighborhood she not going to be in the best schools but you’re going to be in at you know what I think of a working-class neighborhood you don’t want it to be in a neighborhood

where a lot of people are not working and their people in a discussion of standing around during the daytime

you don’t want the kind of people that would want to live in that neighborhood to be renting your house you want someone who is just really trying to make their life work and for whatever reason they need or want to rent a house and

now here’s the thing it comes down carenza when it when it comes down to renting a property or buying a rental property it comes down to the numbers

you want to make sure that the numbers are going to work out that you’re going to get the kind of return and I’m not talking about just pure.

[16:07] Cash flow if you see that you have a $400 payment and $600 rent in Southern California a.

$1,800 payment and a $2,300 rent its that looks like you’re going to make a lot of money that way

and this is really outside the scope of what I can tell you on this call but you need to dig into this a little bit more and hear some of the topics you need to understand if you’re buying the house with cash you need to understand how to calculate the cash on cash return if you’re buying the house using credit.

[16:42] You need understand how to calculate the mortgage constant now you can look this up on the internet but

you want the mortgage constant and then after you get that then you need to understand how to catch

calculate the cap rate on this return because what you want to understand is whether or not there is a positive yield spread that’s something else to look up and the other thing to research is.

At service coverage ratio that’s going to tell you if the loan is a good idea but

between the mortgage constant the yield spread in the debt service coverage ratio you’ll know whether you’re buying a good rental property and here’s the other thing carenza I’ve looked at a lot of people out there who are teaching people how to buy rental properties and I am only found.

One or two others anywhere.

Who teach those things so please be careful my general opinion is you’re not going to get into something really good in Southern California that’s kind of weird.

[17:38] Music.

[17:53] So 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 flip starter event.com but in the meantime Give a listen to Pat caywood.

[18:19] 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.

[18:41] He has a clear concise program and many tools that are going to be very hot.

[18:47] And starting and managing the program and the mentorship and Leadership and coaching that he saw frame are in value.

[18:57] Thank you so much.

[18:59] Music.

[19:51] Brittany from Penn Hills Pennsylvania says my husband and I are finishing up our first flip so exciting and we’re excited for you.

We are having a discussion about interior paint colors our property is in an area that has a lot of investor activity with trendy styles and colors I want a bold color scheme but my husband wants Builders base can you help settle the debate.

[20:14] And my answer to that is no I cannot settle a husband and wife debate I cannot but I will weigh in on the sub doing paint colors and even

this is not going to settle it ultimately you guys are going to have to agree on what to do but here is what I suggest first of all Builders base you know the typical Builders beige is kind of yellowish cream mark

off-white that said kind of a warm color scheme and that’s standard and you don’t need to do it you can.

You can find a neutral color scheme that’s a little bit more up-to-date and what I want you to think about is you know just go online or go to a paint store and it can be any of the paint suppliers you know

the big box stores have pretty good quality paint

and they let you know Valspar and bear both get good ratings from Consumer Reports Sherwin-Williams makes good paint there’s other good paint out there too.

When you look look for colors for your interior especially in a trendy area like this that are in in the gray tones and what we typically use is something that kind of is a

khaki a grayish khaki color and it’s light and sometimes we trim the inside with white and sometimes we trim with a darker brown we’re on a project now that were using a little bit darker brown

those kind of Reed neutral but up to date.

[21:41] And so it’s not just Builders base as far as the outside is concerned I would take a look at the

the neighborhood and see if there are bold colors outside I also

always always always talk with a realtor that’s going to sell the house and get their input and so I have a house in a similar area in Atlanta and my realtor said we need it bold color scheme on the outside and she said think of a.

Cream color a light cream color and paint the door a bold color like orange.

Turquoise or something like that and I’ve already done an orange door on a house so on this one we selected turquoise and

I’m kind of looking forward to seeing it is actually getting painted today wow while we’re making this show and I’ll get down there tomorrow morning and take a look at it and see what I think actually on the house but.

My suggestion is you Branch out a little bit into the boldest but don’t create a paint scheme that causes a love-hate reaction from the people that see it you want him to think it’s cool.

[22:45] And maybe we’ll paint that wall in Ocala of an impact color but this this is fine just the way it is that’s that’s really what you want people think you don’t want people to walk in and say Builders beige

but you also don’t want them to walk in and say.

Who shot that wall would look good in a few skuller I don’t want that color you know so go for something in between that’s what I’m saying

and Brittany I don’t think that will settle the debate but maybe it will help and thank you for writing in Wall-E from Aurora Colorado

I want to invest in the marijuana industry the water your thoughts man Wally that is a loaded question.

[23:26] On the show I don’t want to get political and I also don’t want to get wrapped up talking about the merits or the demerits of the whole marijuana thing the Miracle Medical Marijuana I do believe that more than likely there is some

medical use for marijuana and I don’t know there’s probably still some debate about that.

Here are my thoughts in his station since you asked I know that it’s a big thing out there in Colorado I was at a business conference a couple years ago and met some ladies that were

in the medical marijuana business and they were making money hand-over-fist their problem was they had no place to put the cash because the local banks won’t take it because the local banks are insured by the federal government and.

Under the federal law marijuana is still a banned substance.

And so it is illegal for them to take the money from what is federally in illegal activity and so they were really struggling now I.

I’m not really paid that much attention to.

[24:26] Developments in the past two years I have to be honest with you about this but I do believe that they are finding some solutions and Shirley with the legalization of recreational marijuana in

Colorado and California and Oregon they have found some solution to this problem I just don’t know what it is but I know that’s.

Something that you’re going to have to solve now if you’re looking at just a passive investment I’d say take a look at it in the sense of every that you do for every passive investment what are the risks what are the rewards what are the pitfalls.

[25:00] Could you lose your money are you investing in something that has tangible value I always like that which why I like real estate and.

What is your opportunity to add value in the process now if you’re clearly pass if you don’t have an opportunity to add value but.

If you can kind of pick and choose what you’re investing in.

Then maybe you have an opportunity to add value with your purchase okay or with your investment you didn’t get specific Wiley on what exactly were thinking about doing we had questions here about buying the dirt

and you know to for farming or buying the dirt to build stores and our thoughts about that are along the lines of the traditional things that we think about when we’re buying dirt for whatever purpose

the difference here is this industry is very profitable and really in style right now

I wonder.

[26:02] Even though you’re not going to find me on a crusade against the use of recreational marijuana I wonder though if we are not

inheriting some health problems down the road from this because

you know I don’t know that I really trust the research that comes from you know all research tends to have an agenda

not well not all of it but a lot of it and there may be some bias behind the research but it seems that the health related risks of regular marijuana use maybe or even greater than cigarette use so we’ll see

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 78%.

I start investing 2003 with my net worth with -80 thousand.

Since then I’ve built a business that generates over $500,000 a month in income and allows me the freedom to do what I want I’m Brad Chandler and I teach people just like.

[27:08] 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 camel.com.

[27:18] 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.

[27:25] Music.

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[28:16] Music.

[29:12] We’re getting caught up on questions today I’m Rodger Blankenship not teach people how to make money in real estate this is the show flipping America where we bring you

the best news information and resources we can to help you make Intelligent Decisions about your

relationship with real estate until we’ve got a bunch of questions and we’re trying to get to as many of them as we can today and.

Just trying to help folks so here we go.

Ally from Milwaukee Wisconsin says I’m looking at an older home about 50 years old in the basement the wall is cracked and bulging out just a little

the Bulge is about 5 feet off the floor and it’s no more than two in out of plumb with the wall.

But the entire wall is slightly displaced I look for cracks in the walls upstairs and didn’t see any the seller told me they completely remodeled the house 10 years ago and tore out the plaster walls and put in new drywall

this could be a nice profit profitable project but how concerned should I be Ali the answer is fairly concerned.

[30:16] Now I say fairly it’s a it’s a concerning issue but the house is 50 years old honestly I don’t know what what the

you didn’t say what the wall is made out of let’s just assume it’s poured concrete I don’t know where there’s any rebar in the concrete probably not

so it could continue to go but you know what house is 50 years old is probably moved as far as it’s going to but definitely.

Definitely you should come

before you even put it on the contract but definitely if you have it under contract to buy during your due diligence. You need to pay an engineer a structural engineer to get out there and take a look at this and tell you watch what

not only what the situation is but how to address and fix it in the end you’re going to want something that that engineer can sign off on and put their stamp on it so you have treated this problem

and the way that it should be so you’re not first of all buying a problem and then certainly you’re not passing off a problem to someone else.

All right it’s your it’s your responsibility as a rehab her to make sure that you rehab the actual problems

when the engineer tells you what needs to be done the next step is to get a contractor that can do that kind of work in there are contractors that specialize in Foundation problems you need to get a contractor

to get out there and tell you what exactly what it’s going to cost.

[31:43] The reason I want you to do this before you even put it under contract is I want you to know up front what these costs are because that’s going to affect what you offer.

[31:53] You don’t want a 30 or $40,000 surprise now I’m not saying it would cost that much and I’m not particularly afraid of foundation issues that we can see.

Because if we can see the issue we can price it out it does concern me to discover a foundation issue on a property we’ve already bought now fortunately that hasn’t happened.

[32:16] Because most Foundation issues are visible.

And I know it while we do get this question sometimes from people asking about you know is this problem usually enter them off the air but

let me give you a couple of other guidelines this is just for everyone if you are looking at a.

[32:33] Block foundation wall and you see a crack in the wall and it’s running along with the joints that maybe it’s kind of stairs steps down with the joints that’s an issue of some concern and it’s something that you’ll need to address at least point it up

and and by that we mean fill it in with more mortar or maybe it can be caulked but if

if it’s wide enough to stick your finger into than you may have a problem especially if it’s getting a little wider at the top that means that some of the house baby that corner of the house or side of the house maybe kind of falling away a little bit

when I see that I go inside and see how bad the cracking is on the interior walls now that you’re going to see cracks on the walls if

if you got sheetrock or if you got walls that have been there since the house was built you’re going to see some cracking if it’s cracking that bad outside and Foundation.

A crack like that where there is some noticeable displacement that’s where we want to get Structural Engineers and Foundation experts out there to take a look at it because we want to make sure that we do the right and complete prepare

now they’re and there have been times when I’ve hired these Foundation experts and Structural Engineers and they’ve also been times when

I ate a we basically Jack the house up and bored too fat disorders and did the thing that’s foundation repair people do it’s a little bit of an advanced strategy but fortunately my

family and I have a little bit of construction background.

[34:01] So depending on your background and experience to you may be able to address this with your own crew but you definitely need to make sure that.

Structurally it is sound and you do the right thing for the people that will be buying your house what about cracks in concrete slab.

[34:19] You know I’ve told the story on the show before in fact only brought it up at lunch just this past week but that’s that’s an old show and I still at the last very long time ago and I won’t tell it again here you can

go back and listen to that is a story about home inspectors more than cracks in concrete but my Daddy has always said there’s two types of concrete

that which is cracked and that which is going to crack concrete is going to crack over time

when you see cracks in a concrete slab it’s not automatically a reason for concern again here you’re looking for the size of the crack that is can you stick a nickel into it if you could stick a nickel into it then something is probably Falling Away

one side or the other and then you need to investigate more thoroughly.

And the other thing you want to look for is displacement if you run your your hand across the top of the crack it is one side obviously lower or higher than the other then that’s an issue to be concerned about.

Because it’s moving and if you have something like that and the house is Young say less than 10 years old then it’s not moved as far as it’s going to.

If the house is 30 to 50 years old maybe it’s moved as far as it’s going to and you need to address the situation cosmetically but any doubt.

[35:35] Get an engineer that’s what you do that’s what we do.

[35:40] Frankie from Manchester Maine says You seem to buy just about anything what are things you don’t or won’t do.

[35:51] Okay I I know what you mean by the question bring you but I can’t help it.

Be a little amused at the way he said it the things that we don’t or want to well you know

that there are quite a few but you’re talking about the houses that we will buy our the properties that we will buy our won’t buy I’m just going to answer the question based that way properties that we won’t.

Or don’t buy I used to say we will buy anything at the right price I don’t say that anymore because

I actually found a single wide trailer owned by a bank

and a small town in Central Georgia and we could buy this trailer for $2,500 I said well we can make any kind of thing for 2500 we can make it cash though we’ll just go down there and

renovate this trailer and make it work so we drove in is it.

Little bit more than an hour’s drive to get to this trailer and we showed up and oh my goodness I’m glad we didn’t buy it sight unseen.

Because this this trailer was sitting on a tiny lot.

I’m telling you the lot couldn’t have been more than 50 by 50 they don’t even make lots like this and it was in the heart of the of the Town inside the city limits surrounded by.

[37:13] Regular stick-built construction houses and so here’s this little trailer sitting there that’s not the problem the problem is the trailer was the most run-down tin-can thing I’ve ever seen the roof of the trailer

was several sheets of metal some of it flat some of the corrugated all of it was held down by.

[37:36] Used tires I kid you not.

The tires offered enough weight so that the root sagged in the middle and water would not shed off of that roof which meant.

At the trailer I am certain leaked because it was multiple pieces of random scrap steel that they had up there for the so-called roof the trailer was Rusty the roof was Rusty the trailer was old.

Probably sometime in the 60s and I looked at it for a few minutes and I realize there is no way.

We can save this trailer there’s no way we can rehab this trailer and make it habitable so we Haul the trailer off

but then what are we have we have a lot that you can’t build anything back on because building regulations would require just the minimum setbacks would probably overlap

he wouldn’t be able to build anything on this lot.

And so you would be paying $2,500 for something you couldn’t do anything with so I finally got to a point where I realized okay I won’t buy anything at.

What is the price is right because well let you know and you know just a few months ago I looked at a property that was so bad and so run down I actually.

[38:49] The lady was asking $40,000 for this brick house but no one has lived there for 25 years and the roof was mostly gone

the house was full of rats and mold there was nothing you could do with that house

tear it down and when you tear it down what you needed to build back with something about 1400 square feet but the most you could get for it in the neighborhood was $130,000 and it wasn’t that great and neighborhood anyway so

rather than making her an offer on the property off or demo the house if she would pay me $7,500 to take it off your hands

of course she didn’t like that very much and I wasn’t really trying to be a smart-ass like it’s just.

That was only thing you think you could do with it alright so I didn’t answer the question yet I won’t do that right after this.

[39:37] Music.

[39:45] 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.

[39:59] Peter Faulkner here I tended a one-day flip starter training session led by Rodger blank.

And I was amazed to see what has happened in Rogers life in the last $15 plus years flipping over 800 houses and then this one day training he told how he did it and what.

Balls the blessings the benefits and how to do it and I was so impressed with how well organized and how smooth the training winners today.

You’re tempted are encouraged 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 today and appreciate what he’s doing thank you.

[40:44] Music.

[40:57] Okay the question from Frankie that is on the table is.

You seem to buy just about anything whether things you don’t or won’t do right now I’ve told you a couple of stories about some lessons learned and things that I.

[41:12] And learn not to do so here’s where we are right now at the moment.

We are not buying anything that we need to sell for a luxury price and not opposed to it but the market is so hot in the sub luxury price range.

That’s where we want to stay and and that luxury price number is different in different cities but in Atlanta Georgia.

[41:37] It starts in about 750,000 and I know 750,000 to see Frankie you’re in Manchester Maine I’m not sure what your price points are there but if you went down to Boston 7 and 50000 would be.

[41:51] Just a regular house your luxury price points.

Go up a lot higher than that but 750,000 in Atlanta will buy you a lot of house and you know when you can start getting up to eight 900,000 you’re getting into Mansion Level properties in the Atlanta Market.

We don’t really want to buy there because we like to turn the properties around move them in get them done and move them out so we stick in the lower price ranges now I’m not saying that we would never

do it I’m just saying that this is this is what we’re doing now the other thing that we.

Don’t like to buy or things where we think that when we finish we’re going to end up making $20,000 or less why.

Because we can just take something from our inventory and wholesale it make 10,000 so why do we want to put all that sweat work and effort into something to make 20.

And I know I’ve been teased by my friends saying that I wouldn’t get out of the car and cross the street $20,000 that’s not necessarily true I still bend over and pick up a penny on the sidewalk when I see it.

And it’s so it’s it’s not that it’s just that if you’re going to put all the effort you know you know you need to look at that you returned on investment but you also need to look at return on effort the r o e and that’s a whole different show.

[43:17] Some of the things that we don’t do we don’t go out and intentionally Buy Mobile Homes don’t have anything against it but.

Mobile homes are hard to resell and we’re in the reselling business not the buying whole business now as to buy and hold strategy mobile homes are particularly strong and they cash flow great.

That’s not a problem but they’re kind of hard to sell because people have a hard time getting a loan for them with the Lending

limits the way they are in the antenna we would sell them for probably less than $50,000 in

people in Dino Charge to get a loan for less than $50,000 these days and it’s hard to get a loan on a mobile home so we tend not to do those things.

We don’t buy the weird stuff we don’t buy underground houses we don’t buy octagon houses we don’t buy houses that have really weird additions that create a curb appeal that you just can’t fix

we don’t we just stay away from the super weird things.

[44:17] That still leaves us a lot of possibilities and opportunity just buying regular houses that the things we don’t shy away from or things that are.

Big jobs if it takes a lot of work to get to the finish line and we get to buy those houses for less and we’re happy to do that.

[44:36] You know there’s a national company that specializes in buying Ugly Houses they’re not the only people that Buy Ugly Houses it’s our stock and trade and most of the people that are in this business it’s what we do.

In fact we’d even bought a few houses from the ugly house people.

[44:53] Suzanne from Tampa Florida says how do you do your show three times a week post on social media like nobody’s business.

Teaching teach house flipping make videos and run your business I’m not trying to challenge you I really want to know how you do it.

Well Suzanne we I actually had to think it over little bit about whether or not I was going to answer your question on the air do people do a skit and lot of times I feel like you are challenging me try to make me accountable for my time.

[45:21] But I decided to answer it because you said you really want to know how we do it and this gives me an opportunity to give a shout out to my great.

Team and that’s how we do it we have a great team if you ever called in here and and spoken with Cheryl or marry you would find out what a.

How truly blessed I am to have these fantastic people doing things behind the scenes and making it have

making my life X now we use some software tools that help us post on social media and automate some of that.

I don’t even have to do that anymore for the team is handling all of that when you see me posting on social media the I know how to do it.

But I don’t and you’re right Suzanne I wouldn’t have time to do everything that has to be done.

I have a terrific team I’ve got a couple of great Partners in the business Jim and Andrew and we have a steady supply of interns that are helping us analyze the deals and.

Without this team I would not be able to do it and I want to give them all the credit because they really free me up to make the show what it is so.

[46:34] That’s why I decide to answer the question

all right when we come back we’re going to talk a little bit about some news that you can use in the real estate business and try to get you up-to-date and then give you a parting kick in the pants to get out there and make it happen.

[46:50] Music.

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[48:37] Music.

[48:52] We had a question come up the other day about the cycle of sales in real estate and.

An innocent a perfect timing I’ve got a story from Post and Courier of Charleston South Carolina talking about

the impact of school opening and real estate sales and the opening of school in fact Late July and all of August into.

Lead to lower sales in real estate and part of that a lot of that has to do with

school schedule because people are getting in last minute vacations before school starts back and then school starts back and people don’t really want to be moving right to start of the school year so sales 10 to dip

down in Late July and August but they start bouncing back in September so don’t panic anyone than this is the word in the story and also for all of us it’s normal

happens every year but it comes back.

And surprisingly December is a very strong month to sell houses so don’t be afraid of that because people that make moves make moves

you know during the Christmas break also a lot of Corporations do reassignments in December so people can start out the new year.

In their new location so December is actually usually a pretty good month now it starts telling off again January February but it’s a cycle that you can kind of predict and plan around.

[50:16] I got a story from the Daily Republic and she’s out in California.

And the question is are we in a real estate bubble and I think that this author actually is it on the head now I don’t agree with him completely

but he let me read to you a concluding paragraph from the story the largest home shortage since 1946

unemployment at a 50-year low and strict credit standards makes a real estate Bubble Burst unlikely for at least the next 10 years in my view.

[50:47] Remember I’m quoting The Author Jim Porter I think 10 years is a little long but I don’t see this bubble being burst like a head and if we have a gigantic dropped because of the factors that he just mentioned.

And I would add to that and something we’re paying attention to hear it flipping America is the delinquency rate and the Foreclosure rate are also at historic lows this is due to the

you know the tightened credit standards and the types of loans that are being made today so I’m encouraged that we are in a.

A good strong market for a while and you may remember if your long time listener to the show was that I.

I did that by the end of 2018 I predicted this may of 2017 I predicted that by the end of 2018 we would see the market starting to slow down

well I think I might have missed that.

The market is still hot it’s still strong and at the time I made the prediction I was imagining that the new housing starts were going to resume any day now that is the main reason they have not

with lumber prices the way they are.

[51:57] Entry level new construction is difficult to be profitable so the new construction that is out there is not entry level.

So the demand is still very high and the housing is still pretty in in pretty short supply and it’s going to take a little longer for the market to.

Normalize probably into the middle of 20194 we start seeing a slow down and even then.

I have never said that we’re going to have a burst or a collapse what I said and I.

This we’re going to see a Slowdown in the rate of appreciation when this happens and I think it’s going to be kind of gradual the slowdown in the rate of appreciation is going to.

Basically mean that we will approach a normal 3 to 4% rate of appreciation of the in the price of homes

the coastal areas in the US have already kind of hit this they’ve kind of reached their limit and in some places there overvalued now I did predict.

At the home buyers will start to creep back a little bit but that’s only happening in isolated areas in New York City and Miami and Chicago and not in

not even in all price ranges.

[53:10] So I may have missed a little bit and you know nobody calls me mister pessimist I’m actually one of the most optimistic people out there but I did call for a little bit of a as slowing down and it’s not happening it’s actually the market staying stronger than I.

That’s kind of good news it is good news if you’re looking to sell the property.

The challenges of course finding a property but that’s alright folks if you’re in the investment business if you looking for Real Estate

to invest in there’s always going to be a challenge and wherever the challenges is where you work the hardest when it is difficult for us to sell properties

actor in the crash years we worked harder to get our property sold and to get them finished.

Quickly and on the market and in the up years we work harder to find the deals in the first place you always got to be working harder at something.

[54:00] I keep the survey going nationally I’ve got a story from crain’s Detroit business

this is cranes detroit.com and it’s a story on the state of real estate in Ann Arbor Michigan and in a word or a few words.

Ann Arbor is on fire not on fire like California has been on fire.

On fire in the sense of a very hot Market there’s so much going on at the.

Residential Market is cranking in the commercial Market is going crazy there’s a lot of opportunity Auto industry is coming back jobs are coming back and.

This is a great time to be buying in Ann Arbor and all around Detroit.

[54:45] And Indianapolis and Central Indiana and this story is from wthr.com we have a story about the market cooling off just a little bit it’s still hot but not as hot as it was

so what do you call that you call it a hot Market or not quite as hot I don’t know I could think of some things to call it but.

You know just evidence that the market is still strong and maybe my prediction is coming true in certain areas I’m just.

Researching a ton of Articles to try to

make sure that when we see something that looks like a trend or reporting it to you here so we’ve got some up some down.

Nothing down very far just some cooling off a little.

Now I just reported to you that Southeast Florida in the Miami area we’re actually seeing a little.

You know the market is cooling off there and like in New York Manhattan and so forth but Southwest Florida all my goodness it’s the.

Opposite commercial real estate in Naples Florida and Fort Myers residential real estate in those areas still booming existing home sales are up.

[55:57] Home prices are rising.

Inventory is down and it looks like this is a trend that’s going to stay with us for a while in Southwest Florida what am I saying your folks.

For the most part it’s a good time to be buying real estate anywhere in the US if you can buy it right if you can get a deal jump in there and I’m going to say something that I’ve said many times if you know how to build starter homes and make money at it

find some dirt by it develop it and get going because you’re going to make some money where should you do this I don’t know.

Put a blindfold on and start throwing darts at a US map the first started hits a major city

pick that one because there is a need there’s demand in any major city for starter level homes for the mid-level homes you can go anywhere inside the coastal areas in the United States

that has a growing population all of it is a safe bet.

And there’s opportunity just about everywhere you look and this is how I want to rap to show up today my friends.

If you’re feeling a little discouraged because you can’t find a deal to buy that fits I want to encourage you to do just the opposite.

[57:12] Few months ago.

[57:14] When we realize we were going to have interns working in the office and we needed to give them something to do we just turned on a couple of more of our sources for deal flow

and we have created a thousand to 2000 deals for interns to look at every month

and with the intern load that we have now we still have more deals coming in then we can stake time to analyze and we miss a few we miss him opportunities because we just don’t have time to look at the mall.

[57:43] So how does this help you it should encourage you if we can do it.

You can too and it’s not because I’m the flipping America guy it just because I’m out there grinding working hard networking meeting people talkin to wholesalers looking for opportunities talking to home Sellers and just working it

working it and working it this is the part they never show you on TV

this is why people want to do what they do on TV but they can’t just figure it out then so they feel like they got to pay the TV stars $50,000 to show him out

list of my friends the key here is work it’s a business like any other business it’s a very lucrative business but you’ve got to work it and if you work it.

[58:27] You can enjoy the benefits of all of that all right.

[58:33] Music.

[58:49] I have so loved the quote that we’ve been using for this week dreams will get you nowhere a good kick in the pants will take you a long way that’s from baltazar Gracia.

[58:59] With many thanks to the foundation for renewal for sponsoring the quote of the week.

Foundation for Newell for Renewal works together with communities Nationwide to impact and improve lives find them on the web at renewal fund. Net.

And your contribution is both tax deductible in and in any amount is greatly a.

[59:18] Music.

[59:32] This has been flipping America real estate investing for everyone.

If you have questions about real estate Investments send them to questions at flipping America radio.com listen every Monday at 11 Thursdays and Saturdays at 10 on stations across the country or on iheartradio.com.

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