Expected Air Date: 5/20/19
Opening:
We are going to try and catch up with your questions today. So we will lead with that. Then we have more news than we have time to get to I’m sure. Redfin is in our news segment today and we are going to take a peek at three markets – Minneapolis, Indianapolis, and Boulder, CO in our questions segment and I got asked a couple of really interesting questions in the past week – one of them has to do with my formulas and the rules for investing I’ve developed from them. I get to all of that in a few minutes.
How to contact us
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Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question.
Email your questions to questions@rogerblankenship.com. Please always tell us where you are from. We like to know where the show is being heard. And let us know how you found out about us if you don’t mind.
Announcements:
- Lunch with me every Wednesday. Baraonda
- My latest article in Forbes is out. bit.ly/findredeals.
- The FAN is here!
- Would you like to invest in the Flipping America projects across the country? Coming soon you will be able to for as little as $100. That’s right, Flipping America is partnering with Ground Floor Funding to create a crowd-funded platform where you can invest in the deals we are doing here. The fund will pay out a 8% preferred rate of return and can go as high as 16%. You can make money with me, the Flipping America Guy.
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News:
- Redfin is losing money but making up for it in volume? https://www.fool.com/investing/2019/05/16/with-losses-mounting-in-a-hot-real-estate-market-i.aspx
- CNN is finally reporting on the NAR lawsuit https://www.cnn.com/2019/05/15/economy/real-estate-commissions/index.html
- https://www.opendoor.com/w/guides/housing-market-trends-2019
- Coastal markets will see a decrease, sales will continue upward but slower. Opportunity zones will become a thing… https://theoofy.com/46532/real-estate-trends-and-housing-market-forecast-2019-what-to-expect-from-housing-and-real-estate-during-2019-fri-may-17/
- Because you will do better than 20 or 21. Economy may turn. https://realestate.usnews.com/real-estate/articles/why-you-should-sell-your-home
- Rise in interest rates, millenial home buyers, growth of secondary cities, home affordability, opportunity zones, Alan Donenfeld, CityVest https://www.forbes.com/sites/forbesrealestatecouncil/2019/03/19/five-trends-that-will-impact-real-estate-investing-this-year/#4eee8d951915
- https://www.financialsamurai.com/time-to-start-worrying-about-the-housing-market-again/
- Aby Rosen, the real-estate mogul eyeing French eatery for his luxury skyscraper
- IRE Real Assets reported that many leading institutional investors are nearing their portfolio-allocation targets for real estate assets
- 17 Real estate agents reveal the worst parts of their jobs, from the lack of steady income to being on call 24/7
- Austin tops another list as a hot market for first-time home buyers.
- Chamber welcomes Berkshire Hathaway Real Estate
- Real estate brokers can help coordinate closing date with moving date
- Real estate investors bet on tech hubs to withstand economic downturns
- Real estate market in Hamptons is ‘in a rut’ due to new tax law
- Real estate sales in Rockingham County saw their highest gains this year during April, a 7.7% increase in single-family home volume and a 4.5% increase in residential condominiums.
- Senate Bill 669, AN ACT RELATING TO TAXATION — REAL ESTATE CONVEYANCE TAX, which would authorize the city of Newport to impose an additional two percent (2%) real estate transfer tax, has been scheduled for a hearing and/or consideration on Tuesday, May 21st.
- The National Association of Gay and Lesbian Real Estate Professionals (NAGLREP) joins the real estate industry in celebrating the May 17 historic passing of the Equality Act in the House of Representatives.
- For the first time in a long time, Denver’s bustling real estate market has slowed. The top line: The steep rise in prices is slowing and there are more houses on the market.
- Diane Oberhelman inducted into Commercial Real Estate Hall of Fame
- Builder and real-estate company combine forces to bring new homes to Butte
Your Questions: Send emails to questions@rogerblankenship.com
- Alaina, Milwaukee “Is there ever an occasion when you go outside of your formulas?”
- Erica, Atlanta “When you’re new and starting out and you want to partner with someone who has money, how do you know this person is the right person?”
- Sandy, Jacksonville, “I can’t find a lender who will loan on my first deal. My credit is ok, but I don’t have experience. One lender even told me the deal is fine, but they won’t lend to someone brand new. I’m about to lose my earnest money. What do I do?”
- Antonio, Boulder, “I’m looking at a house near the university I can pick up for $650,000. It’s a 3/2 1300 sf house. I could put 4 college kids in there for $1000 each. Or I could spend about $80k fixing it up and sell for just under $1mil. What would you recommend?”
- Lamar, Las Vegas, “I have some questions, but what I’m really wondering are what are the questions I SHOULD be asking?”
- Nazim, Bloomington, MN, “What should I be looking for in a rental?”
- Erin, Anderson, IN, “In my area where a decent house can be bought for under 150k, it’s hard to make more than 10-15k on a flip. I hear these stories about people making 80k on a flip and find it hard to believe. But I see their selling prices are higher. Should I be considering doing this somewhere else?
- Andrea, Atlanta “I’m brand new but really want to do this. What should be my first steps?”
- Jill, Monroeville, PA “I’m looking at an abandoned house that got partially burned about a year ago. The fire was just in the kitchen. How should this affect my offer? Do I need a structural engineer or something?”
Comment Line calls and Questions
Call 404-369-1018, press 1 and leave your message!
Motivational Thoughts for the day
- “It does not matter how slowly you go as long as you do not stop.”
- – Confucius
Transcript
[0:00] Music.
[0:17] 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 sponsored in part by American IRA
founded by investors for investors on the web at American Ira. Com.
And by Braswell Capital Solutions commercial lending made easy on the web at Braswell Capital Solutions. Com,
and now you’re sad flipping America guy Rodger Blankenship thank you for the Curtis.
We’re going to try and catch up with your questions today so we’re going to lead with that.
[0:54] Then we’ve got more news than we have time to get to I’m sure Redfin is in the new segment today and we’re going to take a peek at 3 different markets Minneapolis Indiana.
Indianapolis and bolt it was easy for me to say in that well it’s a Monday morning Minneapolis Indianapolis and Boulder Colorado.
In our question segment and I got asked a couple of really interesting questions in the past week or so one of them has to do with my formulas in the rules were investing I’ve developed around them and I’ll get to that in a few minutes the other one is from
Lamar let’s see let me know let me go to the notes are Lamar.
[1:30] In the Las Vegas I have some questions but what I’m really wondering are what are the questions I should be asking that
my friend is a terrific question and we have decided to devote an entire show to that topic the questions you should be asking about real estate investing that’s going to be coming up later on this week
I don’t know if it’ll be I think it’s going to be the Saturday show and I’m going to spend some time over the next week could talk and some of my fellow investors and asking what they think,
newbies should be asking and so that’s very good? Thanks and now let’s just
Dive Right In if you have questions about real estate or real estate investing send them to questions at Roger Blankenship. Com questions are Roger Blankenship. Com we answer every question that comes into the show most of the time we just send you back an email
but some of the time we will take it and answered on the show which is what we’re going to do for a good bit of the show today and that’s deal with your questions if you don’t do email
when you want to call in your question you can always call or national come in and question line 404-369-1018,
extension one that’s 404-369-1018 extension one Elena from Milwaukee.
[2:50] Ask this question is there ever an occasion when you go outside of your formulas well the answer to that is yes.
There is now the formula is we’ve put there and the analysis in the rules that we’ve developed around them are there for a reason it’s for our safety it’s to help us keep a sense of.
We know where we are do we ever make exceptions to the rule yes will make exceptions to the mail rule from time to time,
we will make those exceptions sometimes when we’re buying higher-end properties where you know.
Are fixed costs are still the same whether we buy $100,000 house or a million dollar house and that we do have some other costs associated with that particular
property
such as in the the main one would be the interest rate and you but you also have property taxes in that sort of thing and then church everything goes up in a higher property except for your fixed expenses they remain the same so you can afford to do a little bit lower margin on a high-end property
you also can.
Take a look at breaking the rules when you’re using creative deal structure in fact some of those rules kind of go out the window when you use a creating deal structuring but that you know to answer your question the answer is yes.
But you have to know when you’re going to do it and you have to know what you’re doing and that’s why we say if you’re new at this stick with the formulas and stick with the rules around those formulas and just keep yourself safe.
[4:18] Erica from Atlanta Georgia says when you’re new and starting out and you want to partner with someone who has money how do you know this person is the right person.
[4:27] Well the first part of that is to make sure that they really have the money.
But the next thing is going to come back down to the basic hiring questions it. You’re not hiring this person but you want to be evaluating the person based on the same way you would hire people and that is,
primarily a consideration of their values you want to make sure that their values are aligned with yours but you also want to take steps regardless of your agreed-upon values you want to take steps to protect yourself and.
[4:58] Dino
you don’t want to get into business with somebody who has a bad reputation or has a reputation for mistreating other people because they’re going to mistreat you you don’t want to get into business with a person who is known to be a liar because they’re going to lie to you and then they’re going to lie about you so
avoid those kinds of things but basically if they have the money
and you know how to protect yourself that is too with your with the right paperwork so that the deal cat.
Get done without you getting paid this or not I know that this sounds incredible to you guys but hey after you’ve.
You know if you have a ready fire aim mentality like I do you’re going to do some things in your career before you’re fully knowledgeable about,
and I have operated on too much trust in and got myself burned a few times from other people who had money we’re putting the money up for the deal and then after the deal closed decided that we didn’t really make enough money and
you know they would short me or.
Cut me out completely it’s happened and you got to do some things to protect yourself because at the end of that they’re still the one with the money you’re not you don’t have a lot of recourse.
[6:11] Sandy from Jacksonville says I can’t find a lender who will loan on my first deal.
My credit is okay but I don’t have experience one lender even told me the deal is fine but they won’t listen to someone brand new I’m about to lose my earnest money what do I do.
Atwell Sandy at this point,
I think the first thing you need to do is go back to your seller and get an extension A lender has told you it’s a good deal then it’s a good deal the next saying.
[6:41] To do is to consider your options,
the first option that you have is to wholesale the property I know you don’t really want to do that but it’s better than losing your earnest money right so put somebody else in there make yourself a thousand or two or five or ten whatever you can get and move on down the road
and then be prepared for the next time which is the next option you should have already lined up
you need to find someone who has some experience to partner with you on a deal or two.
I offer this to people here actually I don’t really say much about it and I don’t really officially offer it but I have been approached and I have accepted the the role of being the experienced partner.
For some people who can’t get funding without credit and so I know that there are people out there that are willing to do that now.
I have done this this is another way that I’ve gotten burned of I’ve done this in exchange for a piece on the back end and I’ve had people who committed Lee forgot that they had hired me to coach them to the process and it got ugly.
So now I I know to protect myself and then he experienced investor out there is probably going to protect him or herself as well but find an experienced person and ask them to be.
Your experience partner you’re going to do all the work and you’re not going to bug them.
But did you may need to turn it in for a question or two but.
[8:10] That might help you get the funding now if the lender is going to ask your experience partner for a personal guarantee I can pretty much guarantee they’re not going to do it.
Okay so you have to find a A lender who’s doing a non-recourse loan and if you need some help with that
we we can point you in the right direction here we’ve got connections here with Braswell Capital Solutions with ground floor. Us and was Baker Collins all good reputable atlanta-based lenders who will Loan in Jacksonville Florida
and that they’re all going to want to see some experience so,
just keep that in mind that’s not unusual and it’s just the lenders protecting themselves.
[8:55] Antonio from Boulder Colorado.
I’m looking at a house near the university I can pick up for 650000 it’s a 3 to 1300 square foot house are you in those numbers Folk.
I know I jumped in the middle of a question I haven’t gotten to it yet but hear those numbers 83 to 1300 square foot house in Boulder Colorado and.
It’s 650,000 but wait there’s more I can put for college kids in there for $1,000 each or I could spend about 80,000 fixing it up and sell it for just under 1 million.
What would you recommend well if we were just looking at the present and at the numbers Antonio I would probably suggest that you look at flipping it but.
You’re in a college town
and if you have a house that’s worth that could be worth a million then and it’s picking up 3% appreciation which Boulder is kind of tracking along with that you know kind of settling in to 3% which is the historic
National Norm for appreciation then you may think of this as a,
a long-term buy-and-hold play your final answer is going to be determined by your situation will this property cash flow.
[10:11] It’s the numbers aren’t great as a rental I wouldn’t.
Suggest anybody do this GIF you’re just looking for cash flow in and rent but if you have the capacity to hold this for an appreciation play you’re going to realize some pretty strong appreciation.
On the other hand it’s kind of hard to turn away the possibility of making about $250,000 net on a flip and.
You know that would be my bias and here’s why I could flip that property
make the 250 Grand on it and seriously folks that’s what we’re looking at here you know if you buy for 6:50 and put a t in it and sell for a million you’re all in at 7,
what’s 7,
30 maybe 7:40 and with your interest rates maybe another 40 or 50,000 even so maybe you won’t donate to in 50 maybe make 200 on it.
[11:06] Oh wow well with that 200 you could go over to Indianapolis Indiana and pick up.
You know three or four cash flow and properties that you could make ten 12% on your on a cash-on-cash return and so
I would kind of lean toward doing something like that Antonio thanks for the question.
[11:29] Nazim from Bloomington Minnesota asks what should I be looking for in a rental.
This is a good question we get asked as a lot and so I don’t mind answering a lot because I know.
Realistically folks I know you’re not searching back through the archives to see if we’ve ever answered one of these questions before and we have been asked this question for him I imagine I’ve probably answered it on the show before but I don’t mind telling you again.
Because you’re listening now and I appreciate that alright so here’s what I suggest that you look for when you’re looking for a rental,
and we’re we’re talking here about residential not commercial not large apartments 5 units or more but when you’re looking for a rental first thing I would say is look at a small multifamily.
Consider a duplex Triplex or a quad because they cash flow a lot better than a single-family home the main disadvantage of a single-family home nor there are two big disadvantages of owning single family homes as a rental number one
you’re either 100% occupied or 100% bacon and you know that can be a little bit of a problem specially if you have a loan and and
do you know you get in situations that entrepreneurs do from time to time where your little light on cash it can become a problem.
[12:46] Number two is your rehab per unit is always going to be more than an apartment.
I’m getting all the more space that your did you have out there the more you’re going to spend to fix it up when someone moves out,
to make it ready again that’s just fact life and you have to deal with that so.
If you’re going to own a single-family home not a duplexer quad then I would suggest that you look for a small.
House in a good neighborhood with good schools.
A desirable place where people want to live a community in a neighborhood that has an upside a future.
Maybe it’s trending in a good direction and you want it to be as maintenance-free as possible.
For example a brick exterior or some other exterior that doesn’t need to be repainted every 10-15 years the stronger the roof the better,
most of the houses you’re looking at are going to have all the asphalt shingle roofs that’s fine but if you had one that had something different.
Like a metal roof or even a slate roof that you would have to replace maybe in your lifetime then that’s good too.
[14:03] Set the lower maintenance you can get the better off you’re going to be.
The smaller house you get the the easier it’s going to be to renovate between tenants and the better area you put it in the better chance you have for having long-term tenants,
come stick around and stay raise a family and safe for many years now when it comes to single family homes I am of
a couple of different opinions here and one of them is the only truly castling single family homes of the ones where you can get people who are going to stay there for two or three or four years and I know the numbers okay the other thing is.
And saying this knowing the numbers I still think that if you’re going to own
single family homes the best thing to do is to get into a position where you can pay cash for them and just leave no dead on them so you can realize all of the profit all of the income from it. There’s a lot more to it.
[14:59] Music.
[15:22] You never know what’s around the corner
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[16:03] Dot-com Legal Shield protection for every part of life I want to take a couple minutes and tell you about the ultimate
real estate investing course it’s my new course it’s available online and what it is is the compilation of everything that I’ve learned over the last 17 years of investing in real estate buying and selling houses
buying rental properties buying commercial buildings everything I know is condensed about it now is condensed into this course and,
the reason I can call it the ultimate real estate investing course is as I learn new things I will be continually adding to the course now this is the same content,
and I think in some ways better than people are going out there and pay him $30,000 for with the guru’s that come through town you can access this course are you ready for this,
$50 a month that’s right for $50 a month.
[17:00] You get access to the course all of the materials all of the spreadsheets the files the documents the contracts the papers everything
as long as you stay a subscriber you have access to all of those things once you downloaded the documents well they’re yours and you can just do with them what you want
and of course you know within reasoning imported to the law but all of this is available for $50 a month now there is an Initiation fee
an Initiation fee is $750 that’s going to get you,
access to the course and then it’s $50 a month for as long as you want to stay a member I really didn’t even want to do the $750 Initiation fee but the people that are on my team now believe that the information is so valuable they wanted me to charge you if you know 1500 up front and then
I agreed to split the difference with him and so it’s 750 but here’s what I’m going to do because I’m the boss and I can do this I am going to give you an opportunity,
to save $300 off that because you are listening to the show right now all you have to do is go to Roger Blankenship.com click on the resources Tab and then click on Ultimate real estate investing course,
register for the course and at checkout use the coupon code save 300.
And you say $300 that’s the ultimate real estate investing course at Roger Blankenship. Com.
[18:25] Many people are just now finding out that not only can make with stocks mutual funds and gold in their IRA,
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[18:54] Music.
[19:07] Hello everyone I am Roger Blankenship and I teach people how to make money in real estate we are.
Taking time today to answer questions from our listeners.
And I would encourage you to send your questions to questions at Roger Blankenship. Com we will answer your question either
respond back to you in email or will put the question on the show and I forgot to put it on the show will let you know and you know if it’s going to be awhile before we get the questions we may go ahead and send you the answer and then.
[19:38] Busy answer later on the show as well we’ve we’ve done a little bit of all of that but the bottom line is if you have a question about real estate you will get an answer if you send it in here if you
ask a question
that we don’t that at that I don’t consider myself an expert in it’s okay I’ll find an answer we’ve got a team here and we’re dedicated to finding the answers that you need and we will refer you to the people who do know we don’t know things about all of the different asset classes were curious and learning
and but you’ll also notice that I don’t tend to take those types of questions here on the are either because I’m not going to pretend to be something I’m not I’m not an expert
in Self Storage
I’m familiar with it and I understand the numbers but I haven’t done it myself and even if I had done it once I wouldn’t consider myself an expert I’ve owned Office Buildings and I’ve owned manufacturing space I’ve owned a little bit of everything but I guess what I’ve done the most to single-family and that’s why we tend to take most of our questions about single family but I do need to let you know you can ask about
any asset class any type of investment anything related to any sort of Real Estate,
and we will get an answer for you have his compelling enough question we may devote an entire show to it.
[20:58] Lamar from Las Vegas he has the question today
I have some questions but what I’m really wondering are what are the questions I should be asking so we’re going to devote an entire show to that coming up just to
a few days probably Saturday show
alright so let’s get back to the questions at hand are in from Anderson Indiana in my area where a decent house can be bought for under $150,000 just outside of Indianapolis hooked it’s hard to make more than 10-15 thousand on a flip.
I hear the stories about people making 80000 on the flip and find it hard to believe but I see they’re selling prices are higher,
should be should I be considering doing this somewhere else well it’s interesting Aaron we kind of put these questions on the show we we pick,
which ones go we’re right we just had a question where a guy looked at maybe he can make 200,000 on a flip and that’s out in Boulder Colorado but here’s the thing.
He’s got to buy the house for 650,000 he’s got to put another 80,000 into it that’s 730,000 I don’t know how many people have that kind of cash lying around.
[22:06] More than likely he’s going to be getting a loan
and those loan costs are going to get terrific if he runs into any kinds of kind of delays or surprises or things like that that one project could do you in and I have friends
that are very successful flippers that because they are borrowing the money will not buy something that expensive they would rather not be in the business in that
take that risk so that’s something that you need to consider should you be considering doing this somewhere else the question I would have for you is
is this an option Aaron only you know the circumstances of your life do you have the option to do this somewhere else if you don’t really have the the means and the wherewithal to get to a more High profit area then no
most people can’t just pick up and move to where they want to be now I know some people who flip houses in the
winter time in Florida and as soon as the weather breaks and while they’re in Florida flipping houses they are acquiring acquiring houses back home in Chicago and Wisconsin and they’re going back up there in the spring to put them
get them ready and put them on the market and so they’re bouncing back and forth if you can do something like that then sure.
[23:26] But you also have to ask yourself a couple of other questions
do you have the financial capacity to handle the risks that comes with the higher-priced properties or do you have the cash to put into the higher price property she didn’t indicate that and do you have the skill set that comes with
the larger rehabs okay and the next question is do you have the ability to meet and recruit.
New contractors in the town’s maybe you have a contractor in Anderson but I’m pretty sure he’s not going to pick up and go with you to Atlanta or Nashville just to help make sure that your.
[24:02] Projects get done unless you know you’re married to the contractor that would be different okay Andrea from Atlanta
I’m brand new but really want to do this what should be my first steps as you can imagine my friends this is the top question that we get
here into the show
one of the things that you should definitely do is go to Roger Blankenship. Com if you haven’t done this already and at the bottom of the main homepage
click on schedule a free strategy call this is where you get 30 minutes of my undivided attention to help put together a strategy for you so Andrea,
when you ask this question.
I want to answer it but my first answer would be to ask you a few more questions which would be what is it you want to accomplish what is your current employment status do you make good money.
[24:58] And are you looking to do this full-time or part-time is this meaning the flipping houses in and real estate investing.
It out let me just in ain’t no I haven’t had this conversation with Andrea so let me just throw this out there folks as,
so Andrea knows I’m not picking on her because we haven’t spoken yet and I’m not picking on anybody in particular but I hear all the time people say I have a good job but I hate it,
I want out oh really.
[25:30] Where does it say and some life manual that we are entitled to love our job.
[25:42] Now I realize that people have untenable situations unbearable bosses and all of that I understand that but beyond those things you have a moral responsibility to take care of your family.
[25:59] And stability is one of the best things that you can bring to that situation so buck up.
[26:08] I know that you think if you could be like the flipping America guy and wake up every day and do whatever you want.
It just go on about your business that way that your life would be so much better but I’m telling you there are two sides to every coin.
[26:27] If you have steady income in a reasonable situation.
[26:32] There is a compelling reason to stay there and that comes every other week on Friday,
there’s your compelling reason some of you have 10,000 of those compelling reasons coming in every other week on Friday you need to stay in those jobs.
Stay in them until you know it makes sense to get out when you build your business up
Don’t just run out drop what you’re doing and start flipping houses like you see on TV that is a foolish thing to do and
you are not wise to do so even I flip tells is part time for four years before I decided to go full-time and I wouldn’t have gone full-time into it then accept life circumstances kind of pushed me into it
I think you’re much better off doing this as a part-time thing so that’s the first thing I want to say Andrea don’t abandon your job and don’t abandon anything that’s putting food on the table
in order to pursue this the next thing you need to do.
[27:32] Is to figure out why you are jumping into this game if you need income then consider wholesaling and flipping if you,
can keep your job and just bear it.
You know for a few more years or as many years as you need to get some sort of vested retirement you know something out of it okay keep that job and buy rental properties.
Start acquiring rental properties now Andrea ear from Atlanta and I’m going to tell you right now I’m not buying rental properties in Atlanta.
[28:07] Why because the numbers don’t make sense
and now it’s not as bad as the situation in Boulder Colorado we just read about in this not as bad as situations on the west coast where
in Atlanta you can still find properties that appear to be one percenters and that’s a topic for a different day but.
It’s difficult to find and you’re going to end up being in an area where you probably don’t want to be.
[28:36] If you are going to follow the guidelines that I provided a few minutes ago for nazim in Bloomington Minnesota about looking for.
Qualities in a rental you can find some of those around in Atlanta but it’s going to be easier to find them if you’ll just go 2 hours North.
Or east.
That is up toward Chattanooga or to Augusta housing prices are lower and the rents are still pretty strong and your numbers are going to end up being better.
[29:09] Okay now.
I sent you a question is pretty General and Broad I’m going to go on if your first steps if you really are wanting to dive into
fixing and flipping then I’m going to say your first thing to do would be to get information.
[29:28] I suggest that you set up a free profile at BiggerPockets.
Biggerpockets.com and connectedinvestors.com and of course join flipping America and hear what all of us have to say
and get a lot of information in your brain and as you start feeling your brain with information the next thing you need to do is get a mentor
you can do this you do not have to spend $30,000 with some hotel room Guru okay when we come back from this break I’m going to tell you the best way to get a mentor okay we’ll be right back.
[30:03] Music.
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[31:50] Music.
[32:07] Welcome back I’m Roger Blankenship and I teach people how to make money in real estate and today we’re just answering a bunch of questions from the audience and we’ve got a bunch of news we’re going to get to in just a minute maybe in this segment,
but I’m in the process of telling Andrea from Atlanta how to find a mentor you know if you want to
get into this business the first part is to get information the next thing is to get a mentor for getting Mentor what I suggest you do is
get to some local networking events.
[32:40] And you know we have a ton of them here in Atlanta and I’ll just go ahead and put this plug-in as well every Wednesday we get together for lunch and every Thursday we get together for dinner,
and both of those events happened in Midtown Wednesday lunch is at the boronda Italian Restaurant on Beach Street and Thursday dinner is at City Tap.
And also in Midtown.
And for those of you that are local it’s where the Gordon Biersch used to be in Midtown but they completely remodeled it’s beautiful and such a wonderful setting there at City Tap and.
Both of those meetings are the kinds of networking meetings you need to get to you need to meet some other investors you need to find you know meet some different.
Mentors are people who would be mentors and find out exactly what you need if you’re the kind of person if you’re completely raw and don’t know anyting then you might need a full-blown mentoring package.
If you know some things about the business or you know some things about contract and remodeling something like that it could be that you just need to take a course and coarse
we have a course.
Of course we have a course and you can sign up for that and we can talk about that as well but the three big things you need to do to get started or get information get a mentor and then get busy,
and I get busy I mean start making offers wait I’m not ready that’s okay make offers before you’re ready.
[34:05] Just find a deal will how do I know if it’s deal the people around you will tell do this make an offer and give yourself some Escape.
Mechanism such as a due diligence. I due diligence. Of at least seven days that will give you a way to get out of a deal.
If it isn’t a deal all right.
Main thing is just get going so you can go to classes and watch videos and and read the posts in the online forums you can do that until Jesus comes,
and you’re not going to learn what you need to learn until you get out and do a deal.
[34:45] Chill for Monroeville Pennsylvania this just outside of Pittsburgh I’m looking at an abandoned house I got partially burned about a year ago.
The fire was just in the kitchen how should this affect my offer do I need a structural engineer or something well.
[35:03] The answer is it’s probably not going to affect your offer too much if the fire was contained to the kitchen and back me in a most of the vast majority of house fires.
Start and stay in the kitchen.
Occasionally they will move somewhere else burn the house down and sometimes you know you still have these cigarette started the fire and burn the house down and you’ll have some fires that start in the garage.
But that most fires start in the kitchen and you know we’re looking we’re actually making an offer on a house right now that has had a.
Small fire in the kitchen and the in this case it damage the cabinets but it did not get through the ceiling and that’s what you want to look at
I’m jokes you need to get out to the house and see how far the fire went did it go through the ceiling did it it black in the
framing members of the house that that doesn’t necessarily mean that they are weak what is remarkably strong the tensile strength of wood and the.
Did the qualities of wood it it’s just amazing even if it’s charged it still keeps a lot of its strength.
[36:13] But it’s worth it if a if you’re looking up into the rafters and seeing black Rafters and and roof decking and that sort of thing then you need to
get a structural engineer out there and make sure that everything’s going to be okay and you probably need to do that before you make the offer.
Okay just request some time to inspect it but
it’s a fast-moving Market you want to tie it up try to get 14 days of due diligence but you know before you even make that offer get on the phone with the structural engineer and ask them when you can schedule them in because that would be bad
if they come back and say will give you 7 days to diligence and you can’t get the engineer out there for 3 weeks.
Okay so kind of get your ducks in a row on that but
you know in our case the fire damage the cabinets while the house was built in the seventies in the cabinets were you know not great to begin with so
we probably would have replaced them anyway now I know when you watch the flipping shows on TV they’re always taking a sledgehammer to the cabinets which by the way is not how we get rid of Katniss that’s just something they do 50 V.
[37:21] But most of the time we don’t get rid of cabinets and in fact cabinets that were built back in the 70s usually have.
You know high quality wood that we’ve both we’ll do is we’ll leave the cabinet boxes and change out the doors to make them more contemporary looking and or we met.
Do a professional paint job on the cabinets to make to kind of bring them up-to-date and breathe some life into him but there are a lot of things that we do to salvage cabinets.
An ending in this case though we probably would have replaced these anyway,
to update the kitchen and the we would we’re going to rearrange the kitchen anyway and this is one of those things where the stove is kind of on an L that comes out from the wall and separates the kitchen from the den.
And we probably wouldn’t leave that anyway it would probably all be going so in this case it hardly affects our offer at all.
I don’t think I can give you a hard and fast rule on on the show about how it’s always going to affect your offer it just depends on the extent of the damage but if you were going to remove those cabinets anyway.
[38:34] As we were going to do then it doesn’t really affect anything.
Okay that kind of catches up on the questions for today we are going to come back to you tomorrow and we’re going to devote an entire show to your question which is one of the questions
what you should be asking and that’s a brilliant question and we’re going to provide some answers for that coming up on Saturday
in the meantime if you have questions about real estate sending the questions at Roger Blankenship. Com questions at Roger Blankenship. Com send me your questions come on folks.
[39:05] And that will take some more time out of another show to do this
right now let’s do the news have you been seeing commercials for Redfin in your local television market now we don’t watch a lot of Television but
you know there was this pretty big golf tournament over the weekend and I did spend some time watching that red tennis
spend some money on some ads.
To try to showcase the fact that you can sell your house for 1.5% commission and they’re putting themselves out there as a brokerage now
Redfin is has been some different things you know they’ve they’ve tried to find an identity I guess in the competition with Zillow
I actually like Redfin I like it a lot and it’s one of my go-to sources for consumer-facing information about.
The properties I’m looking at it’s probably my favourite to hasn’t always been everywhere I wanted to be but
I am so this is not a criticism of Redfin it all I like Redfin it it’s got some things that it does when you’re trying to run comps and you’re going to remodel and add square footage to a house
it’s got some filters that are very helpful for finding out you know what’s been selling in the size.
[40:25] Of house in your area so I like that part here’s the news though Redfin is losing money I mean it in first quarter
of a 2019 they lost a reported 67 million dollars and they do not have Prophets.
Projected for the rest of this year.
And they’ve been losing money ever since they were created and you know that I guess the thing that’s amazing to me is that these tech companies because of the lure of the technology I suppose and the.
The possibilities in the promise and the potential they can go out and raise another hundred million dollars even though they’ve never made a dime in fact all they’ve ever done is lose money so they’re raising money to go lose more.
At this point investors are getting a little bit nervous but they’re still succeeding and raising money and yeah I can’t help but think.
[41:26] One time I was working with the contractor who was just struggling and.
We took a look at what was going on with his business and you know he was bidding jobs to make a profit on the job based on.
[41:42] You know his cost is labor cost and material cost and that’s were thing but he was not taking in consideration other overhead cost in running a business just basic things like the cost of.
Repairing and maintaining his van that he used to drive around in and the other overhead associated with the business and when you put all that together he was losing money.
Even though he had the cheese a dream of being a self-employed contractor and he had steady work.
He couldn’t figure out why he did he wasn’t any better off if his wife and had a good job they’ve been in trouble but the fact is he was losing money on every project that he did.
[42:25] My partner is just too and that he would probably be better off just sitting at home and doing nothing and that made him angry.
And I said look and I’m not going to say his name but it should look my friend.
You’re losing money on every project and you can’t work harder and you can’t make it up you can’t make up those losses in by increasing your volume.
You’re not going to make up for it if you continue to lose money on every project the bottom line is you got to find a way to either reduce your expenses or raise your prices.
[43:02] Nll after he he got so angry he didn’t work for us anymore after that well okay whatever.
I would like to say to Redfin you’re losing money but are you going to try to make up for in volume or what’s the future.
I hope Richmond has a future but how long can you go and continue to lose money.
[43:27] Especially when your competitors are not now I know that the the eye buyers are losing money and it doesn’t really bother me because they have a business model is based on some form of consumer deception but.
Anyway Richard I’m rooting for you hope it all turns out okay.
[43:50] The next story is I just have to pause to think about exactly what I want to say because
we’ve been reporting on the lawsuit for the National Association of Realtors really for about a month now we started reporting on it when it came out and they’re actually two lawsuits against the at that have been filed against CNA are now
but finally this past week CNN took note.
And it’s interesting I was a little bit amused where you can do that the headline there acting like it’s breaking news but it’s been out there for a couple of weeks for those of us are paying attention real estate so as I pondered this.. Well you know
I guess CNN knows what their listeners really care more about then actual real estate news and.
[44:40] So maybe they’ve got a sense of their own timing on this I don’t know anyway hey we got a lot more news on the inside this little break.
[44:48] Music.
[44:57] If you’re a real estate investor you owe it to yourself to get a profile on the fan.
The flipping America Network it’s a flipping America network.com the profile is free if you’re a buyer a landlord a rehabber.
You enter what you’re looking for.
Particularly the ZIP codes of interest you can put up to 10 but we’ve already we’re working now to expand at 2:25.
You don’t have to sit on the app you don’t have to sit on the on the website.
All you have to do is tell us what you’re looking for your profile includes your cell phone number which will verify that the time you register and when a property is posted in the zip code you’re interested in your going to get a text message that says,
look what just hit the fan.
Everyone should register all 43,000 ZIP codes in the United States are included and you could be finding your next property just by listening for your text we call it snap,
click sold because if you are a seller.
[46:03] You can download the app will anyone can download the app and in the App Store it’s called flipping America Network all one word no spaces you download the app flipping America Network and.
If the course has a buyer you can search for properties using the app that as a seller you could be at the property negotiating a deal with someone that you want to wholesale you could take a few pictures of the property and that’s the snap.
Then you can click to upload this property to the fan put a little information about the property there and.
Immediately that property will get texted to 5:10 dozen hundred I don’t know
however many investors have expressed an interest in that zip code you no longer need to manage a mailing list you don’t have to go out and put together your flyers in your brochures or create
ads for Craigslist or other sites just posted in the fan dozens of people will see it it may be sold by the time you get back to the office that’s why we’re calling it snap.
Click sold www.dot flipping America Network. Com register now.
[47:23] As we do research for the show I’m kind of always interested in some of these sources and you know news outlets on the internet are cropping up all the time this is a source called the uffizi.
00 FYI I’m not sure even what it stands for and I.
Read through you know just trying to see whether these things are legit but then you know this is an article I’m about to give you that quotes Forbes Magazine but let me let me give you the article and then then will,
have a fun okay anyhow
the headline is real estate Trends and housing market forecast 2019 what to expect from housing in real estate during 2019 and this was actually posted Monday May 20th.
And here’s the ear of the three big takeaways and number one is Coastal properties.
Crystal properties prices in the next few years May decrease well that’s a pretty easy prediction since there it’s already happening and I’ve got stories and stories today about go surprises the Hamptons are being hammered right now
so that’s not false.
But it’s also not particularly insightful next the economy is increasing which means sales will increase to.
[48:46] Really this is what passes for education in American society today the economy is increasing which means sales will increase to really.
Sorry
the next one is opportunity zones will offer a positive Improvement to the housing market Leisure the three big takeaways opportunity zone now we’re going to do a show on opportunity zones because they do represent an opportunity but remember it was
named an opportunity Zone by the government so therefore
you should approach it with a healthy level of distrust and that’s what we’re going to do we’re going to take the opportunity zones apart in a little over a week we’ve been researching and we’re going to bring it to you.
Listen to be nice for some other people as well alright so this is the uffizi and at the bottom of this now it’s still not nothing here on this page.
It says the uffizi is a News website dedicated to crypto fintech and business we provide breaking Financial technology news opinions announcements and in-depth analysis on fintech and blockchain companies from around the world
okay well you know the site itself is attractive nothing looks standard and all that.
[50:02] Here is an opportunity to become a financial analyst at the goofy you know I may apply for that sign up now to start sharing your experience.
[50:11] Okay there’s a little disclaimer and here is the author of this article okay this is the part that cracks me up and I don’t want to say the person’s name.
But.
Because you know it’s I like to tease but I also want to keep harmless okay but this person this is this is what they put as the description of himself and analysts experienced in creative writing.
[50:37] I didn’t really know that we wanted analyst to get to creative.
An analyst just supposed to break down the data and tell us what’s there somebody else can get creative with it.
Now that doesn’t necessarily mean that an analyst have to be boring.
Analysts do not need to be creative that’s the part that cracks me up some of this the end the entire article is so.
[51:05] Just flat-out basic but it made it into the show notes not that it ever will fun there you go.
I got a story from US News & World Report which has a little bit more credibility that says I hear the reasons why you should sell your home in 2019.
And let me just go ahead and.
Alert you it’s because if you sell it in 2019 you’ll do better than if you sell it in 20 or 21 what the article is suggesting is that we are facing a real estate downturn.
[51:41] And prices won’t you won’t get in 20 and 21 what you would get for in 2019 I’m not so sure that I believe that.
I I do believe that we are seeing the market change but what we’re seeing is what I predicted a year ago
that is we’re seeing a slowing in the rate of increase but most of the reputable and credible sources that I refer to frequently,
have the,
housing value still continuing to rise in most markets this year now we noted an exception in Hartford Connecticut and several places in Louisiana we did that
a couple of shows ago but in most markets were going to see,
slow and steady increases at the end it’s approaching the normal standard depreciation but still is going to be slightly above it in most markets that is above 3%
animate rejecting nationally around 3.7 or 3.8% this is based on large data from research firms that.
That all they do is research this okay this is not mean just making stuff up.
You know if the if there were different news I would be reporting it to you okay so the economy is is the economy going to turn who knows.
[53:05] I can’t say.
[53:09] I kind of suspect that the experts are going to be surprised because with this President everything has been a surprise.
Okay.
The level of of what’s going on in the economy right now is something that I don’t think anybody could have predicted and no one did in fact a lot of people were predicting exactly the opposite
when it comes to decisions that are being made on policies and tariffs that sort of thing the sky is falling the predictions come right out
and so it’s hard for me to look at any article no matter how reputable The Source on the internet that says that the economy is going to tank and 20 and 21 and really necessarily automatically believe that.
[53:55] Even if the economy turns housing usually does not tank.
[54:02] Because of the changes in the tax code Coastal properties are probably going to see some decline the areas that are over that are super overpriced.
Really the East Coast from DC to Boston and the West Coast all of it those areas are going to come back to us a little bit.
And I I believe that if you live in those areas and you’re thinking about selling a house in the next 3 to 5 years then this may be the best year for you to sell.
So to that extent I agree with the article but for the rest of the country I would say relax and even if you live in those areas.
If you are raising a family and you’re in it for the long haul and you’re planning on staying put for another 5 to 10 years then stay put.
[54:49] Okay this is not legal or financial advice this is just a recommendation but.
If you’re in your home you can afford to live there and you’re doing okay you will continue to build equity and even if your home loses a little bit in value the.
The Hundred Year history is your property is eventually going to catch up and increase in value and you’re going to be okay the key is his stick around stay there for a while.
[55:21] I think of another interesting story from Alan donenfeld from City vest one of my fellow Forbes
Real Estate Council Members and he’s talking about the five trends that are going to impact real estate investing this year and here are the trends as he sees them
number one Rising interest rates number to Millennial home buyers number three growth of secondary cities number four
home affordability and number five opportunity zones there’s the opportunity zones again and yeah I remember we’re going to do a show on opportunity Zone.
When he talks about interest rates Rising he’s talking about getting to a hive around 5% I don’t see that as any kind of a crisis level and I’m not sure it’s.
Going to have that deep of an impact Millennial home buyers entering the market there is 74 million Millennials a larger demographic than the huge number of baby boomer so follow the millennial money many Millennials are at Prime
home buying age and they continue to push Trends in the real estate industry this is interesting to me but it’s also.
[56:29] Well frankly.
[56:31] There are always whatever you call the generation there’s always a generation of young people who are becoming adults Who start having families of their own Who start buying houses whether it’s baby boomers.
Gen-xers are gen wise or hipsters or gen Z or
Millennials whatever you want to call them as people get into their twenties
and they get married and they start having children they want to own a home and so they’re going to be home buyers I am not so sure.
The millennial home buyer buyer thing although it’s catching Us by surprise because this group of young adult seems to be the softest and most irresponsible young adults we’ve ever put forward as a nation but.
It shouldn’t be that surprising that young adults are buying houses that’s.
The news growth of secondary cities this is an interesting thing we’ve reported on the show here that we suggest that most of you look outside of the major cities.
Into the suburbs around them or even go 50 or 80 or a hundred miles and some of the direction to get to one of these so-called secondary cities where are you.
Can pick up properties and those.
Populations are growing and many of the major corporations are relocating to some of the second-tier cities and it’s definitely something that you should be looking into.
[58:00] As for housing affordability Adam data is just taking that.
Renting is more affordable than 59% of all US housing markets and then the opportunity zones we are going to develop.
A devote an entire show to that coming up in just a few days folks it’s been great talking with you today thanks for taking the time to join us here flipping America remember if you have questions send them to me questions at Roger Blankenship. Com.
And keep your eyes open because opportunities are everywhere.
[58:31] Music.
[58:52] Confucius said it does not matter how slowly you go as long as you do not stop.
[58:59] This thought is brought to you today by the foundation for Renewal working together with communities across the country to being lasting impact and life change find them on the web at renewal fund. Net.
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[59:15] Music.
[59:31] You’ve been listening to flipping America real estate investing for everyone if you have any questions about real estate send them two questions at flipping America network.com,
listen three times a week on stations across the country or on the flipping America app free in the App Store,
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