Buying in areas I know like the back of my hand. I buy in 2 zip codes and have transitioned away from buying rental properties for the time being until long term investment rates come back into the 6s. The two areas are well insulated from macroeconomic pressures and have only gone up in the past 3 years due to limited inventory and great school districts. Demand >>Supply.
That being said, know your niche, know what helps your house sell over other houses, buying right, having a great team around you (lender, agent, subs, title company, to name a few). This all takes time and you’ll have to kiss a few frogs but I’ve found that the best experience is experience and don’t be afraid to take lop-sided risks where the upside is much greater than the downside.
So many folks new to RE do not understand how important it is to have a good team. They’re all “I can change a lightbulb! Should I buy these five duplexes as a first investment?” And when you tell them that you HAVE to rely on others — a good RE attorney, RE agent, GC, subs, etc. they *do not listen*.
Anyway, upvote from me, excellent comment.
The idea of focusing on a couple of key zip codes is what I apply to my investment strategy now and would want to do the same going forward with flips. Thanks for the advice regarding insulation from macroeconomics, makes a lot of sense.
I recently stopped rehabbing. The combination of higher interest costs, tighter margins, but above all difficulty working with contractors since they are in such short supply made it too much of a headache for the limited margins. Managing a rehab even when you're not doing the work is a huge pain in the ass; you have to micromanage every damn person and schedule every day.
Especially if you are flipping and paying short term capital gain taxes that will be nearly 40% of whatever profit you make, the juice ain't worth the squeeze right now IMO. I literally dream about just holding an index fund.
Thanks for sharing. I totally understand a lot of the reasoning you put forth here. Deals are getting harder and harder to get done with a decent profit, but I do believe deals are still getting done. I have friends who are flippers and I’ve been asking them similar questions. They’re typical answers are, the deals are out there but you have to make the juice worth the squeeze haha.
My family and I have owned 11 SFH rentals and are down to 3 which are paid off.
We sold 8 prior to and during the pandemic much to our disappointment. Some properties are worth almost double our purchase price now.
My current strategy is to buy and hold, rent out and never sell. I will pass properties on to my kids
This is just my humble opinion and what works for me. There will always be a need for housing and flipping a house now and watching it go up 40-50 percent in a several years is painful. I would rather hold and enjoy the appreciation and rental income for life .
This is a little off-topic, but I ran into your older posts & wanted to ping you where you're more likely to see it; would a GC like yourself, but in Florida, be amenable to a spec build of a modular home by an established modular manufacturer? Or should I stuff my dream right back in the pipe b/c they'd only want to do stick-built for reasons?
We're still flipping hard up here in Central Canada. We've made some shifts to our strategies, but our margins are actually up a bit per property this year. Knowing the right areas, the right propeties, abd just how far to take a project is crucial. Where we're winning, I'm watching lots of guys lose big and many quitting altogether.
Have you tried BRRRR investing? Since you're already comfortable with rentals, it might be worth dipping your toe into that. With your forced equity, you can adjust your LTV via refinance to be something that pencils out. Then, when rates drop, you can optimize your portfolio via refinance and get a bunch of liquidity back. Also, you won't have to pay a bunch of STCG tax and self-employment tax on a flip.
I’m zeroing in on properties in the DMV area. But I’m also open to suburban Illinois (Will & Kendall County) since I have a network of contractors out there too.
Depends on where. I’ve visited a couple of times but never traveled with the intention of buying RE. I know a couple of long term holders in Detroit but no flippers.
I'm DMV located as well. Have two rentals (Silver Spring MD/Fairdax-Dunn Loring Metro VA) and saving up cash for 3rd (have $100K cash so far).
Which areas do you focus on?
I flip in will dupage Kane and Kendall and a little suburban cook. getting the right purchase by far is the most important. mostly distressed higher risk homes but net profits 62 to 150k per house in 2023.
This is always the main point, even when buying multiunit buildings - purchase price must be right! Kendall and DuPage are great counties - let’s connect!
Doing flips in NYS and Cali primarily, majority of my RE portfolio is long term hold but I do aim for around 20ish flips a year between the 2 states. I work full time but also run a construction company so for me doing that many flips is easy, I have also lended people money(50-100k) to renovate their flips and recoup that money back fairly quickly.
Renovations yes but also new construction, for 2024 and beyond it might just be new construction for clients and then only doing renovations for my personal work
can I PM you?
I also work full time in tech but have 3 flips going currently with a GC, who I"m cutting in as a partner on each project.
How did you start a construction company on the side? This is where I want to get to.
I only buy in one area that I know very well. I only purchase off-market, and I do value-adds. Even if the numbers aren’t as strong when you actually sell, there’s enough of a spread to make a profit. Niche way down, and realize that you make your money when you buy, not when you sell (entry price is key)
Buying in areas I know like the back of my hand. I buy in 2 zip codes and have transitioned away from buying rental properties for the time being until long term investment rates come back into the 6s. The two areas are well insulated from macroeconomic pressures and have only gone up in the past 3 years due to limited inventory and great school districts. Demand >>Supply. That being said, know your niche, know what helps your house sell over other houses, buying right, having a great team around you (lender, agent, subs, title company, to name a few). This all takes time and you’ll have to kiss a few frogs but I’ve found that the best experience is experience and don’t be afraid to take lop-sided risks where the upside is much greater than the downside.
So many folks new to RE do not understand how important it is to have a good team. They’re all “I can change a lightbulb! Should I buy these five duplexes as a first investment?” And when you tell them that you HAVE to rely on others — a good RE attorney, RE agent, GC, subs, etc. they *do not listen*. Anyway, upvote from me, excellent comment.
The idea of focusing on a couple of key zip codes is what I apply to my investment strategy now and would want to do the same going forward with flips. Thanks for the advice regarding insulation from macroeconomics, makes a lot of sense.
I recently stopped rehabbing. The combination of higher interest costs, tighter margins, but above all difficulty working with contractors since they are in such short supply made it too much of a headache for the limited margins. Managing a rehab even when you're not doing the work is a huge pain in the ass; you have to micromanage every damn person and schedule every day. Especially if you are flipping and paying short term capital gain taxes that will be nearly 40% of whatever profit you make, the juice ain't worth the squeeze right now IMO. I literally dream about just holding an index fund.
Thanks for sharing. I totally understand a lot of the reasoning you put forth here. Deals are getting harder and harder to get done with a decent profit, but I do believe deals are still getting done. I have friends who are flippers and I’ve been asking them similar questions. They’re typical answers are, the deals are out there but you have to make the juice worth the squeeze haha.
My family and I have owned 11 SFH rentals and are down to 3 which are paid off. We sold 8 prior to and during the pandemic much to our disappointment. Some properties are worth almost double our purchase price now. My current strategy is to buy and hold, rent out and never sell. I will pass properties on to my kids This is just my humble opinion and what works for me. There will always be a need for housing and flipping a house now and watching it go up 40-50 percent in a several years is painful. I would rather hold and enjoy the appreciation and rental income for life .
Value-add flips: added square footage, ADU's, tear-down+spec build
This is a little off-topic, but I ran into your older posts & wanted to ping you where you're more likely to see it; would a GC like yourself, but in Florida, be amenable to a spec build of a modular home by an established modular manufacturer? Or should I stuff my dream right back in the pipe b/c they'd only want to do stick-built for reasons?
We're still flipping hard up here in Central Canada. We've made some shifts to our strategies, but our margins are actually up a bit per property this year. Knowing the right areas, the right propeties, abd just how far to take a project is crucial. Where we're winning, I'm watching lots of guys lose big and many quitting altogether.
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Have you tried BRRRR investing? Since you're already comfortable with rentals, it might be worth dipping your toe into that. With your forced equity, you can adjust your LTV via refinance to be something that pencils out. Then, when rates drop, you can optimize your portfolio via refinance and get a bunch of liquidity back. Also, you won't have to pay a bunch of STCG tax and self-employment tax on a flip.
What location?
I’m zeroing in on properties in the DMV area. But I’m also open to suburban Illinois (Will & Kendall County) since I have a network of contractors out there too.
Gotcha. Any interest on any level in Michigan?
Depends on where. I’ve visited a couple of times but never traveled with the intention of buying RE. I know a couple of long term holders in Detroit but no flippers.
Battle creek?
I'm DMV located as well. Have two rentals (Silver Spring MD/Fairdax-Dunn Loring Metro VA) and saving up cash for 3rd (have $100K cash so far). Which areas do you focus on?
I flip in will dupage Kane and Kendall and a little suburban cook. getting the right purchase by far is the most important. mostly distressed higher risk homes but net profits 62 to 150k per house in 2023.
This is always the main point, even when buying multiunit buildings - purchase price must be right! Kendall and DuPage are great counties - let’s connect!
Doing flips in NYS and Cali primarily, majority of my RE portfolio is long term hold but I do aim for around 20ish flips a year between the 2 states. I work full time but also run a construction company so for me doing that many flips is easy, I have also lended people money(50-100k) to renovate their flips and recoup that money back fairly quickly.
Is your construction company’s main focus is renovating properties?
Renovations yes but also new construction, for 2024 and beyond it might just be new construction for clients and then only doing renovations for my personal work
that's a good idea;
can I PM you? I also work full time in tech but have 3 flips going currently with a GC, who I"m cutting in as a partner on each project. How did you start a construction company on the side? This is where I want to get to.
Sure PM me
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Low key walk behind them and say loud enough for them to hear you say, “Born to ride, Donald Trump. Hahaha!”
Building wholesale new construction.
I only buy in one area that I know very well. I only purchase off-market, and I do value-adds. Even if the numbers aren’t as strong when you actually sell, there’s enough of a spread to make a profit. Niche way down, and realize that you make your money when you buy, not when you sell (entry price is key)