Flipping America 184, Opportunity Spotting

podcast 184 Opportunity Spotting

Expected Air Date: 9/8/18

Opening

Opportunities are everywhere. We say it at the end of every show. How do you evaluate a new opportunity?

I get asked all the time about the market. When will this booming market end? Are we heading for a crash? When will it happen? How will it happen? What should I do to prepare? What’s it like to live through a market crash? Where is the opportunity now? What is the hottest market? Where should I be looking for deals? What’s it like to live in another country? Ok, that last one is a bit unrelated, but hey, during the crash, I considered finding out!

Seriously though, everyone wants to know where they should be and what they should be doing. We spend time on this show figuring out just those answers and sharing them with you and we plan to continue for the foreseeable future. But today I’m going to teach you how to look for those opportunities yourself – just in case you want to know. 

So I’m going to provide the data points and the characteristics of a market that is, in our view, ripe for the picking. It’s like serving fish versus teaching you how to fish. We are going to keep on serving information you need, but today we are going to peek behind the curtain for a few minutes so you can read the circumstances like we do.

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Announcements:

  • September 12, Chantelle Owens at Flipping Atlanta, Tax Liens
  • Lunch with me every Wednesday.
  • Flipping America App is in the app store. You can listen to the show, read the show notes, and the entire catalog of shows is now available to you. It’s a free download and there are no upsells or in-app purchases. Free to download, free to listen. Go ahead and give it a try and drop me a line and let me know what you think.
  • Want a quick analytical tool to tell you how strong a potential fix and flip deal is? Download the Property Grade app. You answer 10 simple questions about the property and the app instantly tells you what you can expect to make, your return on investment, your return on cash, and then the program gives the project a letter grade using the proprietary Flipping America Investment Property Grade algorithm.  

Topic: Opportunity Spotting

Motivational Thoughts for the day

  • Act as if what you do makes a difference. It does. William James

Transcript

[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.

And now here’s that flipping America guy Rodger Blankenship,

it’s a fine beautiful fall Day football season is back and we are ready to rumble with some real estate thank you for tuning in we appreciate it and we appreciate all of the kind words in the comments that are coming in

we’re just so grateful to be a part of your life and thank you for taking this time to.

[1:13] Listen to real estate this is the show about real estate investing we don’t encourage everyone to drop what you’re doing and start flipping houses like you see on TV but we do encourage everyone to pursue a thoughtful course of real estate Investments see what I did there I said it different than normal huh

pursue a thoughtful course of real estate investing and everyone should have some relationship was real estate investing to that end we give you the best information news statistics market trends market reports whatever we can to help you make a good and informed

decision about your personal relationship was real estate

Lois Glickman said it first but I said it many times since to quote him the best investment on Earth is Earth one of the great things about real estate it is never been worthless

okay there’s some worthless land out there but if the real estate has a value it’s not going to lose all of its value it’s going to maintain its value.

And real estate becomes more and more valuable over time depending on needs and situation and it’s a beautiful thing but the great thing is

the value of real estate never goes to complete an absolute zero can’t say the same about stocks now I’m not bashing stocks stocks are a great investment they brought a lot of wealthy people who have invested in them

nothing wrong with any of that.

[2:34] Real estate is just different it has a different set of risks and it has a different set of rewards but if you understand it and you have,

real estate as part of your Investments than you have what we call are you on your way to a balanced portfolio.

[2:51] Now today I’m going to bring to you I talk that I was just ask

to deliver at a local event here in the Atlanta area they called and asked me to bring them some information on the market the local Atlanta market and where the opportunity lies and as I was thinking about that and of course we can supply them with you know current developments in lots of research and what’s going on in particular neighborhoods in that sort of thing.

[3:17] What are the side of to-do was back up a little bit because if I gave them the information they say alright go to this neighborhood

you know XYZ and buy whatever you can in that neighborhood well that’s good information for a David that’s not that’s good information 6 months from now

compare it to the difference between you know giving a man a fish and he eats for a day teach a man to fish and you feed him for life so rather than just

giving you a fish or two I’m going to take the time during this show today to teach you how to fish and a talk that I have entitled opportunity spotting

we’re going to go looking for opportunity and we’re going to know how to to find it when we see it and to jump on it to be ready to be thoughtful

and to take advantage of the opportunity that life brings our way and one little quote I have about opportunities from Ben Franklin opportunity tends to dance with those who are already out on the dance floor so what you think you want to get involved in real estate investing

don’t delay may be delayed actually partying with your money but don’t delay getting involved.

[4:25] Go to some networking events in your town now in every town where we are currently on the air there’s at least one real estate networking event and in most of them you have multiple real estate networking events here in Atlanta there’s probably 50.

[4:39] Now in Atlanta I lead for.

Meetup groups around real estate investing in Real Estate Investors are combined membership is now over 5,000 people.

It’s amazing it blows my mind that we have that many people who are interested in real estate.

[4:58] It is a deep honor to be able to just get out my email program and

email a group of people in touch that many lies and I’m grateful for the opportunity and hope that I bring some value to people’s lives and returns and I know that many hundreds of thousands of people listen to the show and I’m still Blown Away by that and so

here we go in a few minutes we’re going to talk about finding the opportunity around you one of the things that I like about real estate and I’m one of the many things I like about it is the market is not efficient,

and what I mean by that is the information that is valuable is not.

[5:32] Necessarily known by a lot of people there are no laws around that and I don’t think you could be enforced even if there were

sometimes there’s an opportunity at a particular neighborhood sometimes there’s an opportunity with a particular strategy and someone will Discover it or happened upon it chance it and then go with it

of course we people in real estate in to be chest beaters and so we beat her chest and say to do the whole world hey look what I found I found a way of doing this and I’m going to build a sooner around this and a worldwide radio show and I’m skinny

anyway.

But we do tend to talk about it no more we talk about it other people jump onto and pretty soon it becomes a trend and then that becomes efficient in other words the real opportunity to.

Pace the market in Gaines is gone

there may be an opportunity there still to make some money but it’s going to be right in line with what everyone else is making and if you,

look at this and watch the people once the Lemmings arrive to an opportunity the games are about the same in whatever thing you’re investing in

even if it’s not real estate the true opportunity in the true fantastic returns are found for the people who are innovating a little bit and

I can spot the opportunities early now I don’t think you should jump first I think that you should be a solid 2nd and you know I have the old saying it’s the early bird that gets the worm but it’s the second mouse that gets the cheese.

[7:02] Visualize that

that’s a little gross but that’s it before you’ve heard me say it if you listen to me it’s one of my favorite sayings but it’s one of the ways I approach real estate jumping into a new area I want to see if anyone in this is working in this area doing good things making money if so.

I’ll get in there and I need to get in there quickly before everyone else discovers it because once everyone discovers it will the opportunity will be gone it’ll be time to move on to something else.

All right so we can when we come back from the

this break coming up I’m going to start talking to you about how to identify what an opportunity looks like so you can go opportunity spotting

in your Market let me give you some ways to get in touch with us here at flipping America we’re on the web at flipping America network.com flipping America network.com if you have questions about real estate sand into flipping America questions at flipping America network.com you can also find us on Facebook at flipping America Media or on.

YouTube flipping America

join the channel subscribe to it we’re on Twitter and Instagram at flipping America we also post regularly on Google Plus and Linkedin we have a Pinterest account we don’t really do the whole lot with it yet that day may be coming but

anyway this social media that most of you use we are there.

And now we put a lot of useful information on those links that we we just don’t have time to get you on the show so make sure you follow us there.

[8:27] Music.

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[10:27] Music.

[10:45] If you ever want to come have lunch with a flipping America guy.

Pretty much public knowledge where I’m having lunch every Wednesday and right now we’re doing that at huey luey’s on Roswell Road in Sandy Springs we call it creative dealmakers you can get more information by going to meet up.com / flipping Atlanta.

Now flipping Atlanta is our local chapter for flipping America but if you go to flipping Atlanta on meetup.com you’ll get information about that meeting and the next announcement is our regular monthly meeting.

Is coming up next Thursday night September 13th at the Hudson Grille in Sandy Springs just north of metro Atlanta if you’re in the Atlanta area

you need to get out next Thursday night and hear Chantel oh and she’s been on the show she’s the queen of tax liens and she’s going to teach us all about tax liens.

What the process is the procedures how to find the properties how to research and analyze properties what to bid for them and how to.

Properties for pennies on the dollar I’m excited about it is this is one of those things and I’ve had this happened several times on the show.

When I’m talking to somebody and I hear an idea that’s so good I just want to do it and actually what I really want to do is just.

[11:55] And Shantel some money and just said go bid for me because I’m not sure I have the time to master this.

That’s coming up Thursday the 13th and I hope you plan to be there if it’s from 7 to 9 at the Hudson Grille we do charge $5 just to cover the cost of bank or meet up and I’ll try to make things break even.

Not to prepare you for today’s talk you need to go to the App Store and download the property grade app if you haven’t already downloaded it go ahead and download it because you need that in order to be able to run a quick analysis on a potential.

Flip.

[12:29] So let’s Dive Right In what does an opportunity look like in this section we’re going to talk a little bit about how to identify and quantify the possibilities

better in front of you I’m going to do this three different levels first of all we’re going to consider the numbers then we’re going to consider the risk and they were going to consider the situation when we talkin about the numbers I’m going to give you a number here for different

investing activities but let me back up and say there are and you’ve heard me say this before as well,

there are three ways to make money in real estate I know I did a show on 85 ways to make money in real estate and all 85 of those ways are legitimate but

you can boil all 85 of them down to three types of approaches one of them.

Is you buy property with the intent to resell it fairly quickly,

for-profit so you’re buying it under value or you going to add value to it somehow and then sell it for a profit another is to buy a property with the intent to hold it to.

I either for cash flow or appreciation in the third approach is to invest your money into the activities of those who are doing one or the other of the first two.

Okay so it if I could just give those a name let’s call it flips rentals and passive.

[13:49] Okay you got flips and you can flip a house but you can also flip an apartment you can flip a hotel you can flip just about anything.

You can flip a quarter if you want to but that’s not going to make you any money anyway.

[14:02] You got flips you got rentals and you got passive rentals can be single family homes but they can be any asset class as well I tend to focus on single-family homes because that’s where my experience and my expertise lie but.

You can apply this to any asset class you wish and then you have the passive where you’re putting your money into the other set of doing it so when it when you’re talking about

identifying or spotting an opportunity just by the numbers here’s what to look for are you ready.

Sketch pencil Sandy on a flip property you should be looking at a 30% gross margin this margin and what I mean is gross number not considering the cost of funds or the selling cost.

Okay but you are including all of your acquisition you’re holding your repairs

that’s where all those costs are included so in other words if you are all in at 70,000 that property better be worth a hundred if you’re all in if your properties were 200 you better not be more and then 1:40.

[15:07] K y.

Because by the time you settle out the other expenses you’re going to end up with something around 18 to 20% net margin and there’s nothing wrong with that that’s a good number a lot of Industries would love to have it but that’s why you do it

don’t do it for a 10% margin because you’re going to lose money you’re definitely not going to make money all right.

Rentals look for a 9 to 15% return.

And we can talk a lot about how you get to a 9 to 15% return in the buying formulas but that’s a different video different lesson different day just look for a 9 to 15% return on to the investment.

So if it’s a $100,000 house you should expect reasonably to.

Clear $9,000 a year after expenses that’s net operating income

all right now on a passive investment where you’re just putting your money into the activities of others who are doing either flips or rentals you should expect at a return of 8% or.

Better.

[16:12] 8% or better this is how you begin to spot an opportunity now why do I give you these numbers why am I sitting by these numbers because.

If you were to settle for less you could do something else and get these numbers just stay with me here.

Get these numbers if you’re being invited to participate with your money in a flip or if you’re looking at a flip make sure you have a 30% gross margin.

Same goes for rentals 9 to 15% return or reports if it’s a 20% return that’s even better but if you get into a 20% return and probably

you are under leveraged on the property and that is a discussion for a different day because it involves a discussion about return-on-equity which we’re not going to do on the show today

a passive income Apes in a better stick with this flips 30 rentals 9:15 and passive 8 that’s how you know that you got a deal

by the numbers now when we come back I’m going to talk to you a little bit about how to know that you have a deal by considering the risk factors and.

[17:21] Your own circumstances.

Remember if you have a question about any of this just fired out two questions at flipping America network.com I usually have two questions build up for a few days and then we answering but we will answer your question I promise.

We enter a hundred percent of the questions that come into the show.

It may take a day or two for us to get it on the air we don’t put all of them on the air and we couldn’t do that but anyway we will answer the question just sent a question.

[17:47] Music.

[18:00] 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.

[18:26] 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 first.

[18:48] He has a clear concise program and many tools that are going to be very hot.

[18:54] And starting and managing a program and the mentorship and Leadership and coaching that he saw frame are in value.

[19:04] Music.

[19:58] Okay the show today is about opportunity spotting and we’re looking for opportunity

and I’m teaching you how to spot opportunity not just showing them to you and first thing to do is to consider the numbers we did that in the last segment now we want to consider the risks to understand the risks for an opportunity

you need to understand what is the market condition if you’re talking about a single-family flip what’s the market right now well in most places the market is hot that’s a good sign if you want to sell a challenging sign if you’re trying to buy

what is the trend that’s the next one market trend is it raining up or is it trending down it let’s just stay on single-family flips for example if the market is trending up

so you think that this house should you’re buying today as we’re 350006 months from now you may actually sell it for 365 or 370,000 because the market is so hot and it’s trending up

what I want in a strongly strongly encourage you to do is stay with today’s value the 350,000.

Because no one really can predict the future I although we think that we might make more money that’s just let us make more money let’s let’s make our decisions based on that more conservative 350,000 now if the market is trending down.

Which doesn’t really happen for prolonged periods in real estate but you know most of us have been in this business for a while remember the big down the dip that we had in 2007 but the.

[21:27] Most of the dips in are going to be much minor.

Much more Minor by comparison but if the market is trending down and prices are dropping a little bit as they are in high-end market and some places right now I want you to go ahead and use the future value

in that case the future value will be lower than what you could sell it for now but that also is the more conservative

number and that’s what I want you to do is to stay safe in your estimation about what you’re going to do protect yourself.

Alright that’s a little worried about market trends now Market volatility.

[22:04] One of the beautiful things about real estate is it’s generally not volatile changes happen gradually you can usually see them coming.

You can always see them coming if you’re paying attention just there weren’t very many people paying attention you know back 10 years ago but there are now and we are paying attention and so you can see what’s happening.

An exception to this would be SEC the second Home Market

or vacation homes there’s a little bit more volatility there it’s not as volatile as a stock market but it is subject

to faster swings depending on the general economic situation when the economy gets tight and goes bad that’s a great time too

buy these beach homes condos at the beach and second home cabins in the mountain the Nets were to think because people are unloading them.

But when the economy is good it’s a good time to have them so you can sell them.

[22:58] All right there other types of Market volatility but that’s all all the time going to spend on that when you’re considering the wrist.

Of a a project you must consider also the operational skills of the person conducting the work on the project that’s not necessarily the contractor it would include the contractor but if there is a partner who is going to run the project

10

that part your needs to have some experience or some knowledge or both and the ability to run the project so if you’re being invited to participate in something you want to know how good they are.

[23:33] And you can figure that out by looking at their history and if you can get beyond the history that they will share with you into the history they don’t share with you that’s even better.

All right then the project complexity then this just goes almost without saying but we need to say it we need to mention that this is a risk if the project,

it has a lot of moving Parts every moving part is.

One place the project can go wrong and then the last thing I want to say about risk is your money’s position

it depending on whether you are a financial partner in the LLC or a lender or a gap thunder in or in second position in a loan on the project

I’m just going from strong strong to weak.

In terms of your position and so when you identify the risks if you were in a week position with your money then you need to demand a better return.

And you actually deserve a better return now let’s consider the situation for just a minute and I’m really talking about your situation

when you’re looking at a deal it’s not just the numbers and it’s not just the risk look at the situation doesn’t match your personality and what do I mean by that well some projects require a lot of attention to detail and some of you are just not that detail-oriented okay and don’t worry

if you think I’m pointing the finger at you I got 3-point back at myself I’m not the most detail-oriented person in the world that’s why I always look for detail-oriented people to work with me.

[25:02] Those kind of people have a hard time putting up with me sometimes but if I can find somebody that can then it’s a great Synergy that we have between us.

[25:11] And some.

Times you have to discern whether this project suits your personality in terms of the task forces people orientation you know,

you don’t have to be a people oriented person to be successful in real estate investing it certainly helps especially if you can at least fake it for a while but.

You can be

totally task-oriented and do okay in this you’re going to do better I think if you can least pretend to be people oriented every once in a while and I know that if you’re an introvert if you don’t meet people well if that’s a challenge for you or wears you out you’re going to take that into consideration

but if it’s a total people-oriented

a strategy that you’re considering and you’re not a people oriented person then maybe consider a different strategy okay another.

Consideration in your personal situation is your risk profile and I got three points here how old are you.

No I’m not asking you write it and tell me how old you are you know God bless you I’m I’m not that curious.

But one of The Facts of Life is we all get a little older and as we get a little bit older we.

We get a little less energy and we have less time left obviously to make up for our losses therefore as we get older it’s only natural that we get a little bit more conservative in what we do we should take less unless risks with our money.

Any financial advisor is going to tell you this but also its contents.

[26:40] Then you think about your need I know some older people who are doing little bit more risky type of lending in investing simply because

they’ve had some things go bad and actually kind of put them in for house it took all of their life savings and so they’re basically broke and they have a very high need and they feel like they don’t really have a whole lot to lose

they’ve got enough to barely live on.

If they can hit a good liquor to with some of these Investments then they’re going to you know resume a a

moderate level of comfort so it since I have this higher need even though they’re advanced in age they’re taking a little bit more risk than others their age would

then lastly interest and I’m not talking about interest in terms of the money that’s paid to you not financial interest just are you interested now I.

Debunk the idea that you have to be passionate about this okay in fact.

We’re coming up to a break and I’m going to leave it leave us as we go into this break I’m going to leave this stuff with you reject the notion

that you need to find something that you’re passionate about and go do that and then you will automatically do well.

[27:49] Why won’t some people are passionate about things that are criminal Acts.

And that’s not where you want to be and said let’s find something that provides our needs and let’s get passionate about providing for our needs and family we are back.

[28:11] Are you one of the 70% of Americans living paycheck to paycheck and tired of the stress if so I understand it I used to be in that 70.

I start investing 2003 when my network was negative eighty.

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 tease people just like.

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.

[28:48] Music.

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[29:39] Music.

[30:23] Okay we left off talking about passion and I’m saying you don’t have to be passionate about and I’m going to let y’all in a little secret I’m not that passionate about real estate.

I love real estate for a lot of reasons and I enjoy bringing you the show and I I really enjoy being a part of it but I’m hardly passionate about it I’m passionate about my wife.

I am really passionate about her I am passionate about taking care of her I’m passionate about leaving a legacy with my children I’m passionate about the work that we’re doing with the foundation for renewal.

But real estate is an interesting means to an end and honestly I’m not all that interested in all the forms of real estate there’s certain things I’m just not looking to do.

Because they don’t interest me some people do very well owning trailer parks.

I’m glad and I’ve had a couple of mom show and that’s great I’m just not interested it’s just not for me.

There’s nothing wrong with that there’s nothing wrong with being interested in there’s nothing wrong with not being interested but I’m going to do better at the things I have some interest in and that’s my point here when you’re considering your own situation then

the other thing I want you to consider when thinking about your situation are your available funds.

You should have your core money that you just got to put into something relatively safe because you definitely the the The One and Only Rule for this money is you can’t lose it it’s got to be protected.

[31:51] Then you’ve got

maybe another stash of cash that I hate to call it Expendable I haven’t come up with a better word because in my world there is no Expendable Cash There’s no cash that I can afford to lose but the truth is there are some.

[32:07] Times when we put some money into some things we’re not sure if we’re going to get it back but if we do get it back and if this thing pays off it could be huge and so if you have something like that don’t put any money into it if.

It’s going to really hurt you to not get it back.

[32:27] Alright so that you’re Expendable cash that we considered the numbers.

The risks and the situation and spotting an opportunity let’s translate this directly into flips.

When you’re talking about slips that’s the idea of buying for short-term hold add value resale.

[32:49] If you’re going to do a flip and I’ve already mentioned this you need a 30% gross margin I’m not going to hammer that one anymore because we’ve already talked about that but that’s one thing the next thing that you want.

Is you want a property that if we’re talkin single family homes here and you want to property,

that at in an area that has an average selling time of less than 45 days on market now I’ve got a quote.

And this is a Roger Blankenship ISM it’s never buy a flip property in a town where the only people moving there are folks moving back home to be near mama.

[33:27] That would include most of the small towns across the country that are pretty remote from a city.

Nothing against those towns and nothing against small town life it’s a beautiful way to live especially if you enjoy it and I’ve lived in a small town and loved it.

No problem there the problem is.

[33:46] If you are in that kind of a town where the population is pretty stable not growing then.

It’s going to be tough to meet this criteria of less than 45 days on Market all you’ll catch sometimes when it’s

like that but you really want to be in a market where it’s 45 days on Market or less all the time because that way in good markets and bad you know you’re still going to get your house sold.

[34:11] Okay the next quality that I want you to look for is it needs to be a Grade B or better

using the property grade app remember this is the free app in the app store downloaded

run the numbers you kind of got to know your numbers but if you do that and it gets a b or better then this is going to be a good flip and the last thing I want to say about a good flip is you need High rewards if you’re going to be in second position

and you know will say more about that if you want to call in and do a strategy called go to the website click the blue button for a strategy call and we’ll talk to this but if if someone is coming to you with a creative dealstruck you’re not going to

give you one that was just brought to me just this week one of our mentoring students came to me with an opportunity that had been brought to him and its people that he met at the Huey Lewis lunch on Wednesday couple weeks ago

and there was a lady there who is the becoming the credit partner she’s going on the hook to borrow the money for this project there’s a gentleman there who is inexperienced

a flipper in contractor and they needed 70,000 cash to seal the deal so they approached my friend about putting up the cash or he volunteered it I’m not sure exactly how that conversation went down,

long story short he’s putting up the cash but he needed to know

how to protect himself he’s putting up 70,000 cash the deal is making 70000 he wanted to know how much of that should he get well.

[35:39] My answer to that comes by asking how much money is the deal costing and he said $575,000.

At that point I said to him you do realize this isn’t a deal I would even do and we went through the math and numbers and.

Basically we’re talking about a 12% yield on the deal that 12% yield can go away.

[36:05] Something goes wrong on this project no not some minor thing but it’s possible to have a major thing wrong on it $70,000 rehab you could find a real problem that could take

you know 20,000 to fix that’s going to eat into that $70,000 profit is significant way so what where we landed on this one was

I had him to go she ate for a 40% share of the profit because he’s the only one putting any actual cash into the deal he’s the only one that really had anything to lose the others would lose their time

but his cash is worth far more than that and in fact his cash was the key component in the deal so we felt like he was entitled to more of the profit.

No his cash represented 12% of the total investment.

But he’s getting 40% of the profits from it.

Does that seem fair well it seems like he’s getting a share of the profits that exceeds his contribution to the whole thing but remember.

His portion is at risk.

The lender is in first position they’re going to get paid because they’re only loaning 65 or 70% of the finished value of the property and if this deal goes sideways and everybody has to walk away.

He’s going to be out $70,000 not the lender so.

[37:33] He deserves a higher rate of profit than the percentage of investment would indicate.

[37:42] Hope that makes sense okay we’re going to come back in just a moment

and wrap this up by talking to you about what makes a good hold and how to find a good hold opportunity and then I may take a few minutes depending on how much time we have to show you how I put

this all into action in our Market here in Atlanta Georgia hang in there folks will be right back.

[38:02] Music.

[38:08] 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.

[38:22] Peter Falkner 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 Live from 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 or in courage to go go at 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.

[39:07] Music.

[39:21] Today we’re talking about opportunity spotting hi I’m Rodger Blankenship and I teach people how to make money in real estate

we don’t encourage everyone to drop what you’re doing and start flipping houses it’s not for everyone but we do encourage everyone to consider real estate as a part of a balanced Investment Portfolio and so there are opportunities for you to invest in the activities of those around you you may have a friend you may have an acquaintance who is doing some good

things with their real estate investing and if you have some money to put into it I guarantee it they’re always looking for additional sources of money for their deals even here at flipping America were always developing,

new relationships with funding sources and as well as contractors all the time.

And wholesalers in you know realtors in every little bit of it we’re continuing to develop a Full Speed Ahead on all cylinders at all times now in this segment I want to talk to you about what constitutes a good hold.

Really what kind of focusing here on single-family homes but here’s what I think of when I think of a good whole first of all the reasons for buying

a whole property is for cash flow and that one of these days we’re going to do a whole show on cash flow and I’m going to maybe get some experts in here to back up what I already say.

[40:36] That makes an expert agree with me right anyway we’ll talk about what a true Cashflow property is but listen.

[40:44] Listen to this okay do not believe the gurus.

[40:49] There are people out there that are going to tell you something crazy like well you know you make a couple hundred dollars a month at that properties cash flow and you get 10 of those and you’re going to retire on your rental properties and everything’s going to be great look if it’s $200 a month.

[41:03] You probably losing money and don’t even know it but you will know it when the bill comes for the rehab.

Or the taxes or something that you didn’t plan for or set aside the money for but if the property truly cash flows that’s a good reason that’s the reason we buy most of the rental properties but you just have to understand what is the cash flow.

Okay to make sure that you got that down the next reason for buying a prop up.

Whole property is for appreciation now I don’t strictly by at freetail and account on appreciation why because that

running about 3% historically and it’s going to be 3% it’s a little higher than that right now but still it’s only you know the market in Atlanta is super hot

and this year we’re going to hit maybe 7% the last few years we’ve been in double digit increases in value and so appreciation was appreciation was a great play from 2009 to 2014

but it’s not a great play right now because it’s slowing down and there are other things you can do with your money to get a a bigger return.

However.

Appreciation is a strategy if you happen to know where a a new road is going or new development or.

[42:21] But I think you should look for it like in metro Atlanta or other metropolitan areas just go to Planning and Zoning or look at.

Resources like curbed.com and find out what’s being developed in the area where they breaking ground what.

What’s being talked about and find these locations and start thinking because there is a new part you know Atlanta has a large Park in the center part of Midtown call Piedmont Park and Atlanta.

As Broken Ground just yesterday on a park that is going to be double the size of Piedmont Park it’s in an area now we’re there

was an old Corey and the Corey is going to become a water reservoir and they’re building a park around it and all kinds of business and residential development is coming and property values over there or going to be going up.

So this would be a great place to go buy and hold a property in anticipation of an appreciation play okay

another strategy another reason for buying a whole properties attack strategy no we’re not going to try to get into that or explain it if you want to talk to your Tax Advisor that’s fine just know that some people buy properties and sit on them

for tax reasons that’s probably all you need to know right now about that but let’s talk about what makes a good.

[43:42] Hold property again talking about single family homes the first thing I look for is a stable blue-collar neighborhood I don’t.

Necessarily have to see one that’s Rising faster

gentrifying but I don’t want to see one that’s declining either I want to see a neighborhood that’s been pretty much the same the last 30 years and looks like it’s going to be pretty much the same the next 30 Years

because I want long-term stability and know what I really want is someone to move in there who is just content to be a tenant a renter and will stay there for the next 20 years and raise a family there and enjoy a home and that if they’ll do that they can probably

stay there and I won’t even raise the rent sound of much as long as they don’t create problems for me I’m not going to create problems for them

why raise the rents and move your renters out when you have to pee no maybe do paint and carpet when they move out and you.

Hold it back from the security deposit and even if you did that it wouldn’t be enough to cover it but you can’t do it anyway so.

Find a stable blue-collar type neighborhood and put some people in there going to stay there a long time.

[44:50] Aside from all of the numbers the only rental properties that truly cash low our properties that are either a.

Completely paid for or B have long-term tenants two or more years

that’s the only time you really going to make any money with rental properties So to that end the neighborhoods need to be,

I need to have decent schools probably not the best schools okay just be realistic the best schools are going to be in the higher rent districts and the best schools are going to have higher priced homes and the best schools are not going to have cash flowing rental properties

for the most part.

Get missed calls you combine but except decent that’s five or six or better rating at greatschools.org.

You want low crime.

[45:36] There are a number of websites where you can check the crime rates and different types of things to study the safety of a particular neighborhood I can say neighborhoodscout

none of these people sponsor the show or provide any kind of referral fee to me but yeah I’ll check out neighborhoodscout is a good resource but if you Google.

Apps like neighborhoodscout you can find some stuff out there that’s free.

[45:58] Trust me I did it just a little while ago to make sure that that still holds true so you want decent schools low crime and low maintenance.

I like brick houses you know I like brick houses because it must that brick has been painted by a prior owner you don’t ever have to paint it you don’t have to paint the house.

[46:17] You have to maintain and paint the trim that’s okay that’s not they know house now as a brick house has been painted do you have no advantage over.

House with siding you going to have to repaint it again in a few years now they have a thing called Rhino Shield that’s supposed to last 25 years I don’t know if it really does but

I would take a look at that but if it’s not brick I want vinyl I want something that is going to last a long time without me having to pay a lot of attention to it on the outside

I want low maintenance I also want small houses.

Because when people move out and I’ll go to rehab an entire house it’s just cheaper to rehab a smaller house small conservative.

Houses in the stable blue-collar neighborhood is perfect or.

A small multifamily like a duplex or Triplex required the advantage of the multifamily small multifamily is there affordable you can get regular loans on them and if one person moves out you’re not 100% bacon.

[47:20] IQR in single-family home disadvantaged people don’t tend to move into these multi families with the intent to stay for a long time.

So you going to have some coming and going and some people moving in and out then another

thing that I look at is a mobile home on acreage Believe It or Not we’ve done pretty well with that you want to make sure you have a good positive you’ll tune these rental properties that meet all these criteria

if you do that you’re alright okay that means it means we got to go to a break folks so we’ll be back in just a moment.

[47:58] You never know what’s around the corner but you can be confident that you’ll be ready for whatever comes your way Legal Shield and ID shield look out for you so you can get back to living will

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[49:25] Music.

[49:41] Developing sites around the city of Atlanta.

You would get pages of results and amazing projects going on and you don’t really need me.

To break this down for you you just need to plan on doing some research and some reading and look for the opportunity in your area if you find

if you have curbed.com in your area then definitely that’s a good resource and I go to them all the time

like that you know you see a lot of stuff that we tweet and connect you on social media are curved articles I like them they do good job but.

If you find an area where they’re building a big new park and they’re going to put in all kinds of new residential and Commercial like we talked about here in Atlanta with the Corey Parker show called the west side park then.

You know that there is a long-term strategy there that’s worth considering to get over there and buy some of these houses now and now the area right now is pretty scary.

[50:45] And you may have to do that just use prudence and caution and do the best you can.

You know yesterday I gave a talk on this topic to a group here in Atlanta and.

My Gentleman came up to me afterwards and said he was looking at a six units very small apartment thing in an area in Atlanta that’s a little sketchy.

[51:09] Two blocks in One Direction is brand new apartments 2 blocks in the other direction it’s the absolute hood and he doesn’t know whether he should buy it or not and

so I asked him which direction is it going because in Atlanta you’re never more than two blocks away from the hood but which direction is the Improvement going is the Improvement at with those new apartments is it coming your way or is it going the other way.

[51:32] If it’s going the other way then thinking think a little bit longer but the other thing to do is drive around the neighborhood and look at this single family homes and see if any or very many of them are being bought and remodeled into something new

I have a house in one part of Atlanta Pitts it’s an a section called Edgewood and it’s if anybody’s listening from Edgewood you know

from Atlanta you know the Edgewood neighborhood is hot it’s trendy if you drive around over in the Edgewood neighborhoods and just look at what’s going on it’s

mind blowing

it seems like every 4th or 5th house is being completely remodeled by professional investors and some have been scraped to the ground and they’re building new homes

Uber contemporary big Square

do story boxes mixed in with little Colonials mixed in with shotgun houses and and older you know brick houses built in the 1950s that have been remodeled into Charming little Cottages along with all a lot of older properties that are just being ignored or neglected and need work

that’s a lot of Atlanta a lot of Atlanta is in some stage of that and.

[52:42] You know there was a foundation that was involved in the Redevelopment of the Edgewood.

Business shopping sector and they worked with local developers to create a a very large Power Center that has all of the Big Brand stores that you could think of you know all the ones you know what you want to talk about and.

Then across the road they put in several multi-family apartment complexes all of its new and fresh and beautiful and.

That started bringing people into the area that are little bit more affluent and so that started bringing people into the area who wanted to buy some of these older homes and fix them up

and it just started a wave.

That wave is going is Rippling through several places in Atlanta and wherever you are a Pittsburgh Milwaukee I’m talking to you Long Beach California Las Vegas.

[53:34] Reno Nevada come on Boulder Jacksonville Florida wherever you are listening to this show

there is something going on in your metropolitan area that is a new development why I can tell you that I’m confident of this everywhere because of the general state of the American economy and so

when the times are good like this people are not going to sit on their hands they’re motivated by profit they’re motivated by the opportunity and developers are developing and when developers develop

there is a ripple effect in the surrounding communities that you need to be aware of and taking care of.

[54:15] Are taking advantage of that’s how you.

Conduct your own opportunity spotting now one question that comes to me all of the time and came to me again even yesterday.

Was the market is so hot whenever I find a deal and by the time I get out to look at it someone else already has it under contract what do I do.

My answer is move faster you’ve got to find a way to move faster.

[54:44] You got to make offers from your desktop and you know we make blind offers all day long now some most banks and.

Hood will there they frown on blind offers and they don’t give you any due diligence. But

if you’re buying off the MLS make a blind offer and give yourself 3 days or even 24 hours you need to make the offer as attractive as possible with

the tightest closing that you can cash is King cuz you can close as soon as it’s out of work is done.

Make the best offer you can and make the offer now if you if a property pops up don’t wait a day to run the numbers on it

if you’re serious about finding deals this the other thing not only is there the speed issue it’s just doesn’t seem to be enough deals let me tell you something about this my friends I have auntie

11 ways of finding opportunities and deals to buy in real estate.

11 right now we’re only working with three of them.

[55:46] And between those three sources that we work pretty hard we’re bringing in close to,

really close to 2,000 properties a month to review we have a solid thousand every month and then every other month or so we get another thousand or so in a data dump us more than we can

that’s more than we can analyze that’s why I only have 3 of the data sources really turned on and trying to work for us because

anything else would just get it would sit there and go away before we even had time to look at it so why it so I reject the idea that there aren’t enough deals to go around.

There are tens of thousands of vacant homes in Atlanta Georgia their tens of thousands of vacant Lots in Atlanta Georgia there’s opportunity everywhere you turn.

I can go to I can go home from the office 20 different ways and in those 20 different ways I would probably find 50.

Abandoned or vacant houses on my way driving through nice neighborhoods on the Northern side of Atlanta you can find this anywhere my friends anywhere you go.

There is opportunity just because the market seems tight the days on Market seems short,

I know it seems like the opportunities are limited but if you choose to see the opportunities as limited that’s all you’re ever going to see.

[57:08] What I want you to choose to see and believe is that if you work at this the opportunities are going to come to you and you will have more to deal with than you can possibly imagine

I have students that have been in my program for Less Than 3 weeks who are buying their first property.

I have one student that started the program in June about four properties this summer.

[57:33] These people can start from nowhere and get to where they have.

As quickly as they have you can do it too I feel like that guy in the movie The Waterboy you can you can.

You just have to apply yourself stop feeling sorry for yourself stop telling yourself the reasons why it can’t happen.

And just get out there and network network network Market Market Market knock on doors knock on doors knock on doors.

Push your push their never give up never give in Never Surrender all right folks.

[58:11] That wasn’t really a rant but that’s my word of encouragement to you today I want you to recommit yourself to opportunity spotting.

And I would like for you to write in to just send it to questions at flipping America network.com and tell me about the deals that you’re finding because you recommitted yourself to.

[58:30] Music.

[58:58] William James said act as if what you do makes a difference it does this thought was brought to you by the foundation for renewal.

Working together with communities across this great nation to bring lasting impact and life change find them on the web at renewal fund. Net and is always your gift in any amount is both welcome and texted.

[59:20] 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,

be sure to like us on Facebook find and follow us on Twitter and Instagram keep your eyes open opportunities are everywhere.

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