Opening:
Chris Miles is the founder of Money Ripples and his passion is your financial freedom.
What’s the point of all this anyway? I’d say “Financial Freedom” is most of it. Flipping houses can be lucrative, but passive income is where you want to end up. Today Chris Miles is going to start us in the right direction.
Chris is the founder of Money Ripples and has an interesting take on financial freedom. I know you’re going to enjoy the interview in just a few minutes. I promised we would take questions from listeners today and we got a monster question – ok, maybe not a monster QUESTION but it might be a monster ANSWER.
Darla, from Manchester, GA asked, “I am thinking about flipping some houses, but I’m a studier. I want to know what I’m getting into. What are the biggest risks in flipping houses?”
My answer to that led to a little essay that is probably going to go up on YouTube and will likely be the only question I get to today. Don’t worry! Keep the questions coming and we will get to them all. I promise. Send them to questions@flippingamerica.net.
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Quote of the Day
There are two in life over which you have complete control: Attitude and Effort.
Expected Air Date: Wed 7/27/2022
Guest: Chris Miles chris@moneyripples.com
Transcript
[0:00] What’s the point of all this anyway?
Flipping houses can be lucrative but passive incomes where you wanna end up. Today, Chris Miles is gonna join us and start us in the right direction. Here on flipping.
[0:15] Music.
[0:43] Founder of Money Ripples and has an interesting take on financial freedom.
I really enjoyed our conversation and I know you’re gonna enjoy the interview too in just a few minutes but I promised on the last episode that we would take questions from listeners today and we got a monster question okay,
Maybe not a monster question but it could be a monster answer.
[1:06] Darla from Manchester Georgia asked i am thinking about flipping some houses but i am a studyer.
Well I
Gave some thought to that question and that led to a little essay that’s probably gonna go up on YouTube later on as a separate video and likely will be the only question that I get to today don’t worry
Keep the questions coming and we’ll get to them all I promise send your questions to questions at flipping America. Net if you wanna follow us on social media check out
Add flipping America on Twitter and Instagram and on Facebook you’ve got to go to flipping America media.
[1:55] We had a very nice call today by the way. Very nice call. And I don’t play those for you. I just keep them to myself but it really made my day and thank you so much. You know who you are Bill.
Okay 877 55 Roger that’s (877) 557-6437 extension one leave your message
Question,
And I hope that we can earn your ongoing listenership support and loyalty and that you’ll tell a friend about us because we just restarted the YouTube channel that’s YouTube.
Dot com forward slash Flipping America and we need listeners and likes you know. We don’t have very many
Subscribers yet but hopefully the YouTube channel will take off like this show has and you know someday we’ll
Be famous and will be a rich actual YouTuber.
[2:45] Never been really one of my goals but if we can bring value to your life that way that’s fine okay let’s get to the question because the question is.
What are the risks involved in flipping houses,
And so i’m going to go now into the top 10 market risks in the top 10 risk factors,
Flipping houses and and also how to mitigate them number one.
[3:17] Market trends.
With the national sources and your local realtor at least monthly for updates on the market one good place to do that is with the flipping America show
Yeah, by the way, nationwide right now, the average days on market is less than 3 weeks
Got you, you’re not gonna believe this, but the prices are up almost 20 year% over year from last year. The demand is like nothing I’ve seen in my 20 years of doing this.
I think it’s gonna change and if you pay attention and listen to shows and watch the YouTubes that I do,
You’ll see that I’m predicting this is gonna change sometime in the first half of next year.
Number two, demographic shifts is your market area growing, stable, or declining.
This will tell you how aggressive you need to be in your prices. There are multiple online sources for this information but one of the best is.
[4:30] So find out what’s happening with the population in your area.
Generally i don’t like to buy,
I’ve made an exception for that over the past few years because the markets are hot everywhere almost doesn’t matter where you are but
As the market’s cool off over the next year or so I’m going to get more selective with the area number three interest rates this is something to be monitored especially
Are on the rise right now. This gonna put some homes,
Out of reach for some buyers i don’t think it’s a major factor but it’s a risk you need to look at and you need to count on the fact that by the time you get that property rehab it may have,
And nudged its way out of affordability for some of your buyers.
[5:25] Then number four the time of year.
Sales typically hit a low in late January and February and rise to a peak in July.
[5:38] Know where your projects
If you finish a rehab and list the house in January your days on market may be a bit longer than July and you may have to be a little bit more aggressive on price,
I don’t think that’s a reason to sit on the property and wait for the better price because you you’ve got carrying cost during the time you’re holding especially if you have a loan on a property.
[6:04] Number five valuation this is the most critical.
This is known as the after repair value or ARV i never call it the arv and so you didn’t hear that for me but I’ve heard people call it that and it’s always strike
Strikes me as a little funny. Anyway, you need to know the ARV, a good realtor will be able to do a comparative market analysis based on your rehab plans,
And provide you with a selling price on tv house flipping shows and investor will buy a house fix it up then bring a realtor in and tell them ask them how much are we gonna sell this for.
[6:43] We never do this. Real investors never do this and that’s certainly made for TV. Those people that are doing those TV shows cannot be stupid enough to operate.
This way. We make our original offer to purchase the house based on what we are almost certain will be our selling price. If and I add this in there too now. If it’s.
Market we do not count on the price continuing to go.
[7:06] And you know build that appreciation into the model,
When we get to the end and I know that a lot of you that are thinking about investing now or are investing now have never been involved in a down market. But those of us that live from,
That we’re in this business between 2008 and 2012 we know very well what it means to sell in a down market
Now you can get a broker’s price opinion which is done by a realtor who is training in qualification to do them my experience has been at realtors do BPOs normally sit at a desk and do
BPO so they’re not in the field that much I prefer the opinion of an active realtor
Active in the particular market for my property that I’m considering. Of course, the third source of value is appraisal. You can hire an appraiser to conduct an ARV appraisal based on your rehab plans. I even know some appraisers who actually are house flippers.
That’s an advantage.
[8:08] But when you’re in doubt get multiple valuation opinions if you don’t buy the property at the right price you’re gonna have little chance of making money one of the coolest ways to do this fact just throw this in there is to check out flipping America go,
It’s live now it’s
We’re not officially announcing it. That’s gonna be in a couple weeks. But it is live now flipping America go is has automated systems that you plug in the address, talk about what you wanna pay for it and it uses automations to come up with
You know it it uses my calculations and some automations built in from the developers to calculate the ARV
Figure the rehab cost and put it all there and give you a thumbs up or thumbs down on
All that is gonna be right there for you. It’s actually really cool. But that’s all I’m gonna say right now. We’ll say more a lot more about that later on. Number six in our list is investor experience.
[9:10] You’re gonna be doing,
When you branch out into something new don’t hesitate to call a friend with experience in that area
It could be a new territory or a new type of rehab that you haven’t done before or a new method for acquisition or disposition. You may even wanna do a joint venture with your experienced friend on your first venture into new ground.
Be sure that you always partnering with somebody who’s got the experiences needed to make this deal happen.
[9:41] Number seven investor ability this is related to number six but it’s different in this respect,
Perhaps you are comfortable in a suburban setting updating 10 15 year old houses with paint floor kitchen and bath
That doesn’t automatically mean you’re gonna be good at converting a 50 year old to one in the city and to a two story four three
Much different and in some cases a lot more complicated and difficult it’s wise to stay within your ability and branch out only when you have a mentor to
You walk your first deal with you. Now, I’m gonna tell you all,
This may surprise you but i’m the my background in history and this is the suburban guy.
I like the light rehabs you know,
I call it fixing what’s needed and making it look nice.
[10:46] And I, you know, some other investors are little condescending toward me about it. I don’t care.
[10:52] Hey,
Renovation plans the renovation budget is a
Big factor in our original offer price. If you miss this, you’re gonna miss profit. Even if everything else goes right, make sure everything visible has been expected thoroughly and addressed.
Forget the idea of doing everything you would want to do if you were moving in but focus instead on everything that is broken must be fixed the out of
Date should be updated and consider creating at least one wow factor and one is usually enough. Number nine, unknown or hidden repairs
Nearly every house has them you may open up a wall to change a shower valve and find other problems you may discover after your purchase at the ceiling is as best as possible,
Tile and you’re gonna be spending extra to dispose of it. Problems related to water filtration could be anywhere. Water is the number one enemy of a structure
I suggest 10% contingency on top of every repair budget if you don’t spend it lots more profit but,
More times than not you will spend at least some of it.
[12:08] That way I saved it for last it’s just the order I thought to item,
Problems with contractors. This is the number two. It’s a number one problem but it’s the number two most important factor in determining the success of your deal
The best way to solve this problem is to head it off at the past.
[12:24] By a strong vetting process. Now, we have the whole
Course a mini course in finding a contractor and I’m not gonna get into it here but among
Person, and also has the skills to do the job at him. Both are absolutely required. Next, make sure you have a clearly stated contract.
Make sure you cover insurance, payment schedule, performance expectations, job schedule.
The scope of work in every item related to the completion of the job make it your contract and not his never
Ever his always yours you’re the client and you are in control.
[13:10] When things go wrong and sooner or later they will move quickly,
Change lock spot lock box codes and move on times of the essence in this business you will allow him access to come back and get tools but only under your watchful eye
Problems in this area and this is a good time for a shameless,
Plug for my course flip starter where I cover all of this and so much more 50
Video lessons with a bunch of bonus lessons interviews with a successful house flippers,
Covering every aspect of the entire business for fixing and flipping. Now,
I have done this as a live event we’ve charged $300 we charge $500 and,
Now the course is being sold online for a $1000 but.
[14:05] We’re running a special right now if you go to Flipping America. Net forward slash.
Flip starter you can get the flip starter course for $149.
That’s a pretty amazing deal.
[14:22] Okay. Now, we’re gonna switch gears and we’re going to talk with Chris Miles who joins us from his home and his office.
Chris miles welcome to the flipping america show.
Thank you for taking time to join us today, man. Alright, let’s dive right in. You’re not specifically a real estate investor. You’re an,
Alternative investor or alternative investment. So, right off the bat, you gotta tell us what do you mean by alternative investments?
[14:56] Anything outside the stock market,
That’s basically what I mean. Anything outside the traditional crappy IRA 401 K. Save it in the stock market in mutual funds. All that stuff that I already learned 20 years ago doesn’t work anyways and has not created financial freedom for people that way.
That’s what we’re talking about. So, things that can be in the real estate space especially. Like, I love the real estate space. I used to be more of an active investor and I switched to be more of a passive investor. I forget my butt handed to be in the last recession,
So, I do more if like, you know, passive like turnkey long-term rentals and and dealing things with like doing yoga.
Apartment syndications or self storage or even land flipping and things like that. Yeah. And you know,
That kind of stuff, you know, even franchises. You can buy a franchise. That’s in the alternatives.
Base as well.
That’s what an alternate investment is.
[15:55] I will put that alternative category. Yeah. Yeah. Might.
My my dad got the whole collection too. He’s got like a whole,
Hey Facebook full of stuff down was he’s got from like you know the crane machines you get at the store and stuff you know,
Well, investment.
It’s so that sort of a standing joke around here.
Mm hmm. If you’re, if you don’t wanna do real estate, go with Beanie Babies. Oh wait, you should have done that 25 years ago.
Hey.
Cards and stuff that we’re gonna be worth millions someday and. Right. Then they over produce them and other worth crap.
Yes yes I sold off an entire,
Almost half of a pick up load pick up bed load of baseball cards that I found in a house that we bought.
It was boxes and boxes and boxes and boxes. I thought, man, I have 10 $15 thousand here. I sold the whole thing for $250 just to get rid of it.
Yeah.
Yeah. Anyway, alright. So, let’s let’s talk about the series stuff though.
People.
[17:21] Well, you know, it’s it’s typically the, you know, spend nothing.
Save everything pay off all your debt and hopefully someday you might have something especially if you put in the stock market
Right and this is what I learned as a financial vibe. I did that for 4 years and and after 4 years, I started realized I was just a salesman in a suit.
Because I was telling people things like, well, hey, you know, dollar cost average. Even when the market goes down, keep buying.
I mean it’s not the best marketing strategy ever. Is it tell people hey if the market is going down you’re losing money keep putting more money in cuz it’s on sale,
Well if that were the case I would tell people to stop making stop paying money into stock market when it goes up you know I was telling hey it’s getting expensive stop by and only buy one to crashes,
I don’t do that. It was all there was never a bad time to to,
To never buy, right? It was always a good time to buy,
Cuz risk is a chance of loss. So the higher chance you have of losing does not mean you create a higher chance of winning. Use that means you go broke,
So what we try to do is we try to control manager risk we try to create as low risk as possible to create and ensure we get the highest returns we can get.
[18:36] But that’s not what they tell us, is it? You know, they tell us to take all the risk in the stock market while they is the financial institutions like your goldman sax and your your your Mary Lynches and Fidelities and people like that are telling you to take all those risks. Well, guess what?
They’re taking down the risk they’re taking money as cash flow they’re giving they’ve taken out those guaranteed charges of one two whatever percent they’re taking out
Whether you make money or not we get paid.
Yeah, I get tired of it. Yeah, I get really tired of it especially when people say, oh, you make 10 or 12% stock market? No, I’ve done the 30 year calculations. It’s about eight. Three for the last 30 years or actual yield
Not 10 or 12%. Let’s go throw a few numbers. If you compound it forever, right?
That’s better than some people I’ve seen what they do in real estate,
Because right in the last couple of years people have paid these for these 30 or 50 $1000 courses in real estate and they feel like I’ve gotta buy some I’ve gotta buy some. I have to justify all that money I spent. And they’ll go out and pay too much for something
And they’ll make a little bit of money and they’ll say well at least we didn’t lose or then or they’ll lose money and they’ll say well at least we learn something,
And I’m sitting right.
[20:03] Yeah exactly. That’s really the help. We take money back.
Or it’s true. Call Chris,
Which is alright. I already forgot it. Money ripples, money ripples. Com, right?
Okay let’s talk a little bit about your journey.
How did you get okay answer me this.
What did you think you wanted to be.
[20:37] I want to be there in astronomer or physicist. Has it always wanted to be? I was wanting to be like a scientist, right? Cuz I just love, you know, I love, you know, look at the stars and stargaze all the time. I thought,
That’s the thing I wanna do.
[20:52] Not much farther than beyond age 12,
And music, and pop culture, and so, at one point, I wanna be a music producer. Like I want to work for Motown or create my own label like baby face, relead, did, you know, like more than that, R&B type section.
But then, it was weird. My senior year, I had this feeling. I should go into sociology.
Of all things. If people are like, well, what sociology? I said, I have no clue. I just, it sounds cool. I think it’s like psychology but studying groups of people instead of just one person,
I know it’s kinda right in that. You know, you study groups of people. I like to know about social psychology and things of that nature and so,
That’s why I went to school for in hopes to become a you know a business consultant and then I end up dropping out so I can have a real life business to get that business experience dropped out of college with one class to go before my bachelors,
And became an entrepreneur and realized, hey, I can make way more money doing this than being an employee for somebody else. So, yeah. I dropped out of college and stay as an entrepreneur.
Almost everyone is doing something different than what they thought they would do when they were a kid.
Eight and a half.
It’s true.
[22:17] So, we have a lot of people listening right now who are thinking about what may be making a change in their life.
What piece of advice would you give them to think about creating an entrepreneurial opportunity for themselves maybe they’re and after listening to this show they’re thinking about real estate.
But.
[22:47] Yeah I’d say that the big key for happiness for me I think for anybody else right it’s really designing a life that you love,
Yo, doing the things that you love.
Intersection where you take your gifts and your talents and knowledge and experiences whatever it is intersecting that with your passions and having that intersected way that serves people,
Because ultimately that that the true key to wealth no matter what you’re doing whether you’re doing real estate investing or anything is always focusing on how can I serve people solve problems add value in such a way the money is just a natural byproduct,
That was the big epiphany for me that you know right about the time I left being a financial advisor that it kinda demystified what money was,
It wasn’t about a strategy. It wasn’t about just trying to, you know, screw people over which is what most people think it is when you people get rich.
It’s not about that at all. It’s actually about how you serve and solve problems for people, create a solution, and then offer it to them. And if it happens a line with your gifts and your talents, your god-given talents as well as your passions that you have in life.
That’s the perfect way to go about it.
[23:54] Alright so.
That’s really good. You know, find a problem and solve it. No. We aren’t talking to a lot of people who are thinking about investing in real estate. Maybe they already are getting into it. What mistakes do you see people making in the real estate space?
[24:22] Well, you know, I think the biggest, the biggest problem they created, they create a bigger rat race, a bigger hamster wheel that they’re on, right?
I mean, a lot of people talk about, well, I read Rich Dad Port Ad. I’m all here to get out of the rat race, right?
Well, guess what? What you created is a business and by the way, a business still, everything I just said applies. You’re about serving people, solving problems, and creating value, right?
That’s the key to big in that business successful.
[24:47] Or would I find happening in this team with guys that make multi millions in real estate cuz I’m in several real estate masterminds and this is the one thing I find in common,
Is that they might make millions but they’re still stuck in a rat race. It’s just bigger.
Because they don’t actually have passive income coming in. They’re great at generating revenue through their their real estate business,
But if that business were to shut down today because the government for you know had the sake says hey guess what you’re nonessential,
Which we’ve never seen them do in the last 2 years, right? You become non-essential, you’re shut down. I guarantee most real estate investors that are out there investors are actually still gonna be in the rat race. In fact, they’re gonna be broke, scrambling, trying to figure out how to make money.
[25:30] You gotta have multiple streams of passive income coming in outside of your business,
But unfortunately because you’re trying to build that business to get it going and it becomes a habit of always reinvesting in your business and reinvesting is good to a point,
What happens people chronically reinvest their business which just means they’re not reinvesting their spending money into their business. Yeah. Never taking that profit home. And that profit if you can take that to create other streams of income outside,
Then you have real freedom.
Dude, we got so many things we need to talk about. If you’re breaking up so many thoughts and and directions we could go. But we only have a few minutes left. So, I wanna tell people about money group. Well, I do love that name by the way. I have just kinda drew a blank on it.
Where’d you come up with that name and tell us about what our listeners are going to see when they go to your site.
[26:20] Yeah so during the last recession like I went from being financially independent to an upside down millionaire,
Which means that any homeless person on the street had a one 1 million dollars more than I did.
How to dig out of that didn’t file for bankruptcy but it would have been easier if I did but I had to dig out of that just through grit just become a Y steward of my money getting things under control,
And I was able to dig back out of that to become financial independent again 2016 at the end of 2016.
And so during that period of time I stopped teaching people how to gather rat race because I was back in it.
So instead I started to teach people how to get resourceful how to find cash how to increase your cash flow not necessarily through passive investing but just by.
Freeing up in you know,
And what a happening is we started helping the average person free up about 34 1000 a year.
[27:22] And I remember I was out for a jog about 10 years ago and I was trying to come up with a new company name cuz it’s about to split off from the company I was with.
And I was like, what’s the name I want? I was thinking cash flow, someone’s cash flow.
And then I was thinking about that vision of the people’s lives are already been blessed. There’s a few 100 people’s lives have been blessed to that point.
And I was thinking about that ripple that degree with them and their family and and what they would do for the community, the country, and across the world.
And that’s where the really that name money ripples popped in my head and I was like.
That’s great.
That’s where you might be going but I I wanted to hear from you. Alright, you’ve got a course of people to take that they could start for $five. What is it gonna cover? What are they gonna learn.
[28:09] Yeah like so everybody keeps asking well how did people do that like how about 850 clients freed up 300 1 million dollars in cash flow
What is your passive income or for freed up cash whatever basically we have a course that teaches that
Teaches them all that stuff. You know, it teaches them like how to find a free up that money, how to like protect
Your wealth. Had to increase it and grow it. Where the different alternative strategies you could do even outside your own business. All that kind of stuff is the stuff that we teach in that course. It starts at a five bucks so you can get a taste of it. Obviously you want more than you can upgrade.
But really just get you that start of hey how do I start increasing cash flow right away even if it’s just for five bucks.
[28:46] Alright. Hey, everybody. This is Chris Miles. I’m speaking with and you’re gonna hear from him again because I’ve already made the editorial decision staff.
Alright? Chris, thank you for your time today, man. We really appreciate it. And we are gonna have you back as soon as we can. Okay, such an honor. Appreciate it. We’ll see you.
[29:06] Alright that’s all the time we have for today you hear the music plan.
I wanna go out with the quote for the day.
[29:20] Your attitude.
You’ve been listening to flipping America real estate investing for everyone. Listen three times a week on stations across the country or on the flipping America app
Free in the app store. Be sure to like us on Facebook, find and follow us on Twitter and Instagram and keep your eyes open.
[29:48] Music.