My Investing Strategy is Dead... What Now?

You might have noticed that it has been awhile since I have announced a new house flipping project on this site. That is indicative of how the real estate investing market has changed in Atlanta (again). My strategy of buying foreclosed homes to fix and flip has stopped working. I am now racing to figure out how to find new properties. 

Potential Deal?...Don't Walk, Run!

This week I was reminded that when opportunity knocks the advantage goes to the proactive person and not the reactive one. You see, I got an email with a potential deal in my preferred area of real estate investing. Although good deals in my area are rare, they are possible because that is how I got House #8.

This was a wholesaler deal, meaning that an investor finds the property and puts it under contract and then tries to assign the sales contract to another buyer (me). They make their money by setting the sales price to his end buyer higher than the sales price he contracted with the owner of the property. The difference in prices is their profit.


I immediately gave him a ring but I couldn't get a hold of him until late in the day so we set an appointment to see the house the next day.

Rental House Update and What You Must Know Before Purchasing Rental Property

My rental house is now sold! (my favorite four letter word in real estate).

In the previous post about this house I wrote about how we had taken a chance and decided to sell the house instead of rent it. It turned out that the interest for purchasing was much higher than the interest for renting.

Not only was it very easy to get an offer on this house, we got several offers on the house within 48 hours. To top it all it was fairly smooth transaction to get to the closing table.

First off we had to sort through all the offers that we got. Initially we got two cash offers slightly under the listing price of $125,000 and one financed offer at asking price. But then the offers kept pouring in but all of them at listing price. That is when I decided to roll the dice…

Do You have Passion for What You Do?

Ran into this short clip about Steve Jobs' thoughts on passion for your work. It made me think quite a bit and wonder what areas in my life do I feel passionate about. It's not just passion for the work I do to put food on the table but of all the things that you and I do in our lives how many of them do we feel passionate about?

The Risks of Taking on Debt

Lessons Learned From the Real Estate "Bust"

I was recently researching the tax records of a property I want to to buy and noticed that the house had been refinanced numerous times only to end in foreclosure. I think it's a good example of how some people use debt to fund their lifestyle and the risks of taking on debt.

Because real estate in general was moving up in value a lot of people were looking at the equity in their houses and looking for ways to use it. A lot of this was fueled by the multiple offers that mortgage lenders would make homeowners to try and convince them to refinance.

Rental House Update...We Are Selling!

It seems that because of the low housing inventory here in Atlanta demand for houses has gone through the roof. I bet many other major cities are seeing the same too. To illustrate let me tell you what has been happening with my rental house.

A bit ago I told you about how we evicted the tenant and were getting the house ready for rent again. Well, we did exactly that, got rid of all the trash the tenant left, cleaned the carpets, painted and did a major clean of the house which apparently the tenant was allergic to doing.

Anyway, we put the house on the rental market and the phone has not stopped ringing. My sole method of advertising was the sign in front of the house and Craigslist.

Learning From Real Millionaires...

I had the opportunity recently to attend a conference where the majority of the attendants were field supervisors in a construction related industry. As a project manager I send these guys out to my different projects and they are basically in charge of getting the work done.

The reason I bring this up is because their job would not be the first one to come to your head if I asked you to mention a high-paying profession.

The interesting part is that these individuals mostly have a High School diploma only, they live in rural parts of the country like Alabama, Mississippi and Louisiana, they mostly drive trucks (American of course), many of them consider themselves "rednecks" and...they are millionaires!

That's right. You would never guess it by looking at them because typically the image of a millionaire that is presented to you and me is something like this:

Yet most of these guys look like this:

How I Messed Up A Potential Great Deal

In real estate like so many other business opportunities, every once in a while a "deal" comes up and you have to jump on it faster than you can say "deal or no deal". Well, it turns out that I just learned exactly how fast that needs to be…

Saturday morning I am looking in the multiple listing service to see what potential house flipping deals I might find. I have specific target areas, at specific price points and I look for specific conditions.

For example, one of the areas that I look in is close to me, has good schools, houses are not too old and resale values are in the upper $100's - $250k range. I look for houses that are at least 3 bed/2 bath with a basement or if they don't have a basement then it has to be a 4 bedroom.

In my search I noticed a house in this area listed at $99,000. The price was attractive and I dug some more…

7 Ways To Change Your Family Financial Tree

As a father I have the ability to change my family tree. That means that If I come from a family where money was a problem, either there wasn't enough of it, it wasn't managed correctly or it was wasted, then I am completely capable of changing that "inheritance".

We parents are responsible for imparting on our children numerous life lessons, teaching them about money and building wealth is one of them.

The way parenting works you can’t say one thing and then do another…

What do you think happens when a child observes the following behavior:

My First Eviction: Eviction Notices and Lessons Learned...

Demand letter, followed by eviction notice
followed by disconnect notice from power company.

A couple of months ago I wrote about how I was trying to work with one of my tenants that was struggling to make the rent. At the time it seemed that we had worked out a solution to allow him to stay in the house until the New Year and then we would part ways. However, that solution apparently did not work and the tenant decided to vanish into thin air along with the rent for December... 

We had agreed to reduce the November and December rent to let him stay in the house. But December rolled around and no check. I was able to contact him at first and he gave me the whole "check is in the mail..." line. I delivered and mailed the Demand Letter shortly thereafter (pictured).

Sure enough the 15th of the month rolls around, still no check, and now he is not picking up the phone, returning voicemails or text messages.

Choosing to Turn Down a House Flipping Deal

The floor here is sunk about 6 inches.

I had high hopes that this post was going to be about announcing House #11 but unfortunately this will not be it. However, that is sort of a good thing...

After the sale of House #10 I have been looking for my next investment and sending out offers like crazy!

I had already commented on how much the inventory of foreclosed/bank owned properties had gone down in Atlanta. So a lot of the properties I am finding in my area of interest that would make good candidates are being bought by people willing to pay a lot more than I am.

So...back on Wednesday we finally put a house under contract. This house had gone under contract about four times before. Bank was asking $130,000, I was offering $95,000. 

How to Overcome Your Fear of Risk

Several years ago I realized that achieving the wealth and life potential that is beyond what I had at that moment was going to require that I push the boundaries of what I knew, had or was doing. This meant that I would have to face risk and fear to embark on a path that I had never traveled. I learned that overcoming the fear of risk was going to be crucial if I wanted to move forward.

If you have ever been or currently are in a similar place you need to realize that there will be no change unless you cause things to change.

A new path might look very risky if you are looking at it from the perspective of a stable, predictable and common life.

But when you decide to break from the mold, when you decide to become whatever it is that you want to become that does not match what you currently are, then you will have to overcome the resistance to pursue that life that you want to achieve. This is when overcoming fear comes into play…

Finding the Next Investment and 2012 Goals

Since the last house flipping project is now closed and in the books it's time to move on to next item on the goals list. I have been evaluating my goals for 2012 to see what is still left to be done and what's in store for 2013.

You might have noticed I have not been very active on the blog or on the site but that is because I am focusing on other goals and some work on the site instead of in the site. Not to mention dealing with several issues with my rental properties.

First off, with the sale of House #10 I have now achieved my two main goals for 2012. These goals were to flip two properties with an average $30k profit and to achieve a certain amount of income for the year. I am happy to say that we have done so two months before the year is over. Which only makes me wonder if I set my goal too low…

House #10 Final Financial Analysis...it's a good one!

Like I had mentioned in my last post House #10 is now sold. Here is the financial analysis so you can see how the numbers on this house flipping deal came together. This is a breakdown of all my costs and the profit from the sale as well as some performance numbers so you can see my returns on this investment.

I divide my analysis into 5 sections, the first four are all my cost categories and the last one is performance. The column on the right labeled "% of ARV" means what percentage of the after repair value (ARV) is attributed to each category. 

For example, the most important of the ARV numbers is the first one. It tells me that I bought this house for 53% of what I ended selling it for. This is important because for future purchases I know I should be buying properties around 50% of what I expect to sell them for.

Here are the actual numbers:

Celebrating a Milestone: House #10 is SOLD!

House #10 is sold as of last Friday and I wanted to celebrate with you where I am today. No, this is not about House #10 and how much money we made with this house flip, I will cover that in another post. This post on House #10 is more about having done, ten times over, something I did not think I could do. 

It's really about making significant progress in conquering fear, uncertainty and doubt - ten times over.

How I Avoided a Landlording Nightmare

I own two rental properties and for the most part I have good tenants. Of course every now and then something breaks or a rent check is late. Well, over the last two months a lot has broken and one tenant has been way late. Dealing with all at the same time has been challenging but I had a few things on my side. 

 Of the 5 years I have been a landlord it seems that this summer Murphy moved into the rentals and all of a sudden all the problems decided to show up in about an 8 week period.

First off both air conditioners in both houses broke. In one house the repair was just changing a capacitor in the furnace and cleaning the outside unit…$200. On the other house however, it was not so simple…

The fan in the condenser that sits outside the house broke off and since the unit was original to the house we could not find a replacement. So the option was to try and "invent" something or replace the entire unit.

House #10 Update and Rehab Budget Recap

The rehab on House #10 is complete and the house went on the market at the end of September. I am very happy to announce that we got an offer on it 72 hours after we put it on the market. Although it was not a full price offer like we got back on House #9 after a short round of counter offers we got to a price we could both live with and now the house is under contract!!

Probably the one thing that I liked about the offer more than anything was the fact that the buyer was using a conventional loan and they were already pre-qualified which is not the same as pre-approved.

So what? You might ask…

House #10 Repair Budget

Our latest house flipping project, House #10 is now completed and is on the market for sale. Here is the list of repairs that I am making to the house and the estimated repair for each. 

Cost estimating and putting together a budget is a critical skill to learn for flipping houses. I have known investors to go upside down on a deal because of underestimating repairs needed.

You will see that I divide the list into exterior and interior and then sort the interior repairs by room. This helps me put together the list of parts I got to buy and also helps me track the work to make sure it gets done. 

Flipping House #10: The "After" Pictures

Our house flipping project #10 is fully rehabbed and on the market!!

I will tell you that I think I set a new record with this one in terms of how easy and smooth it all went. I believe we got this one done right at three weeks. I have to credit the general contractor I used for doing outstanding work ( and me for hiring him ;-) ). Not only was the work done very well but my "management" (aka control) was seldom needed.

This made for an awesome finished product and a bit more sleep for me at night. I am so proud how this house turned out. You can look at the before pictures to see the dramatic difference.

Allow me to walk you through the improvements...

Before

Cleared out a lot of brush. Fresh paint on shutters, windows
and trim. Trimmed bushes up front and fresh pinestraw all around.

House Flip #9: Final Financial Analysis

House #9, our latest house flip project is now sold! 

Although there is no such thing as an easy house flipping project (those only happen on TV) this one made me loose quite a bit of sleep. Between the disagreements with the contractors that worked on the job and the running around to get the work done on nights and weekends while still keeping my daytime job, this flip was a challenge.

However as you will see, I think it paid off: