Flipping America

Have you ever thought about investing in other asset classes besides residential? Today our guest is Hunter Thompson (I know you’re going to ask, so “no, no relation to THAT Hunter Thompson) Hunter is a full-time real estate investor and founder of Cash Flow Connections, a private equity firm based out of Los Angeles, CA. Since starting CFC, Hunter has helped more than 250 investors allocate capital to over 100 properties. He has personally raised more than $20mm in private capital and controls more than $60mm in commercial real estate. Hunter has been featured in Forbes, Globe St., Inside Self-Storage, as well as a variety of other media news outlets, podcasts, and radio shows. Hunter is also the host of the Cash Flow Connections Real Estate Podcast, which helps investors learn the intricacies of commercial real estate from the comfort of their home, car, or office. He’s coming up in just a few minutes to talk in some depth about investing in other asset classes.

A couple of weeks ago we did a show about Chicago and the Chicago market. One of our guests, Jane Garvey is back with us today. I had so many more questions I wanted to ask her about life and investing in the Chicago area and my friends I've learned over the years that if you have a chance to tap into the mind of an expert, take it! As soon as our last interview was finished I asked Jane if she would come back and speak with me further about issues in real estate investing. She graciously agreed and that interview is coming up in a few minutes. She is a walking encyclopedia of real estate knowledge, creative deal structuring, history, perspective, and good old fashioned common sense.

A couple of weeks ago we did a show about Chicago and the Chicago market. One of our guests, Jane Garvey is back with us today. I had so many more questions I wanted to ask her about life and investing in the Chicago area and my friends I’ve learned over the years that if you have a chance to tap into the mind of an expert, take it! As soon as our last interview was finished I asked Jane if she would come back and speak with me further about issues in real estate investing. She graciously agreed and that interview is coming up in a few minutes. She is a walking encyclopedia of real estate knowledge, creative deal structuring, history, perspective, and good old fashioned common sense.

If you are going to own rental properties and acquire enough of them to achieve financial freedom, sooner or later you are probably going to want to stop managing them yourself and hire a property management company. I've hired a few management companies in my time and coming up I'm going to share with you some tips and techniques about managing properties yourself and then give you my guidelines for hiring property management.

If you are going to own rental properties and acquire enough of them to achieve financial freedom, sooner or later you are probably going to want to stop managing them yourself and hire a property management company. I’ve hired a few management companies in my time and coming up I’m going to share with you some tips and techniques about managing properties yourself and then give you my guidelines for hiring property management.

Expected Air Date: 12/10/18

In this business you make your plan, plan your work and then prepare yourself for curve balls. Real estate is by definition an inefficient investment vehicle and that is a good thing. It means opportunities are always springing up. It's a challenging thing in that you can't get locked in to forever implementing one trick, technique, or area. To be truly successful in this business you have to get to the point where you understand an opportunity when you see it, recognize wishful thinking when you hear it, and spot a scam a mile away. Once you can consistently do that, you can adapt your plan implementation to match the opportunities that life and the markets bring to you.

Today we are going to talk about one such occurrence. I recently met a gentleman named Eric who claimed that he could provide some information from the online auction houses that is not generally available to the public. That information is an informed opinion of the reserve price the lender is seeking on every property. Eric offered to provide lists to me, with his opinion of minimum price on each property and further offered to enter bids on my behalf. I had to jump through a few hoops for -- shall we say -- approval to be in this program, but I agreed to give this a look starting about 2 months ago.

Eric suggested we look at low priced houses in a number of states nationwide and focus on the real deals. We are talking about buying 2 and 3 bedroom single family homes for less than $10,000. Eric has sold 14,000 of these to his clients over the years and has owned 2000 of them himself. Following his advice and with the help of a partner I quickly bought our first two properties for a minimal amount. We are currently working this process.

I began to share the idea around with my contacts in Atlanta and there has proven to be tremendous interest -- so much so that our mentoring call last week was about this topic and Eric volunteered to be on the call. It was terrific - great information, and this is shaping up to be a fantastic opportunity. Dozens of people on our mailing list wrote in, regretting that due to scheduling they would not be able to be on the call but they were interested. So I recorded it. After thinking it over, we decided to play portions of this call for you on the show today. So coming up in just a couple of minutes you're going to hear the actual call and learn how you can buy investment houses across America for around $10,000 - sometimes even less! You'll hear what to do with them and how to manage a property hundreds of miles from you and you're going to learn that you can buy and sell a property that you never one time visit or see. If you're skeptical, so was I. Probably the first 30 minutes of my first conversation with Eric was spent addressing my doubts about whether what he was saying was true and whether he could deliver. I now know through first hand experience that he delivers on what he says, and he has bent over backwards to help guide us through the process. You're going to like this topic and I know you are going to be intrigued. Stay with us.

www.flippingamericanetwork.com

Facebook.com/flippingamericamedia

Twitter and Instagram @FlippingAmerica

YouTube: bit.ly/FlippingAmericaOnYouTube

Linkedin: bit.ly/FlippingAmericaOnLinkedIn

We now have a profile at houzz.com for what it's worth.

Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question.

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

"Life is an ongoing story problem. Solve it."

Expected Air Date: 12/10/18

In this business you make your plan, plan your work and then prepare yourself for curve balls. Real estate is by definition an inefficient investment vehicle and that is a good thing. It means opportunities are always springing up. It’s a challenging thing in that you can’t get locked in to forever implementing one trick, technique, or area. To be truly successful in this business you have to get to the point where you understand an opportunity when you see it, recognize wishful thinking when you hear it, and spot a scam a mile away. Once you can consistently do that, you can adapt your plan implementation to match the opportunities that life and the markets bring to you.

Today we are going to talk about one such occurrence. I recently met a gentleman named Eric who claimed that he could provide some information from the online auction houses that is not generally available to the public. That information is an informed opinion of the reserve price the lender is seeking on every property. Eric offered to provide lists to me, with his opinion of minimum price on each property and further offered to enter bids on my behalf. I had to jump through a few hoops for -- shall we say -- approval to be in this program, but I agreed to give this a look starting about 2 months ago.

Eric suggested we look at low priced houses in a number of states nationwide and focus on the real deals. We are talking about buying 2 and 3 bedroom single family homes for less than $10,000. Eric has sold 14,000 of these to his clients over the years and has owned 2000 of them himself. Following his advice and with the help of a partner I quickly bought our first two properties for a minimal amount. We are currently working this process.

I began to share the idea around with my contacts in Atlanta and there has proven to be tremendous interest -- so much so that our mentoring call last week was about this topic and Eric volunteered to be on the call. It was terrific - great information, and this is shaping up to be a fantastic opportunity. Dozens of people on our mailing list wrote in, regretting that due to scheduling they would not be able to be on the call but they were interested. So I recorded it. After thinking it over, we decided to play portions of this call for you on the show today. So coming up in just a couple of minutes you’re going to hear the actual call and learn how you can buy investment houses across America for around $10,000 - sometimes even less! You’ll hear what to do with them and how to manage a property hundreds of miles from you and you’re going to learn that you can buy and sell a property that you never one time visit or see. If you’re skeptical, so was I. Probably the first 30 minutes of my first conversation with Eric was spent addressing my doubts about whether what he was saying was true and whether he could deliver. I now know through first hand experience that he delivers on what he says, and he has bent over backwards to help guide us through the process. You’re going to like this topic and I know you are going to be intrigued. Stay with us.

www.flippingamericanetwork.com

Facebook.com/flippingamericamedia

Twitter and Instagram @FlippingAmerica

YouTube: bit.ly/FlippingAmericaOnYouTube

Linkedin: bit.ly/FlippingAmericaOnLinkedIn

We now have a profile at houzz.com for what it’s worth.

Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question.

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

“Life is an ongoing story problem. Solve it.”

Expected Air Date: 11/12/18

In the last show we talked about short term rentals. Today we are taking a more traditional approach with a discussion about landlording. I've owned and self-managed dozens of rentals properties over the years and I've also hired property management. I'm going to share with you the top 35 things I've learned so far. I'm pretty sure there's always more to learn which is why I use the words "so far". That's coming up in a bit.

www.flippingamericanetwork.com

Facebook.com/flippingamericamedia

Twitter and Instagram @FlippingAmerica

YouTube: bit.ly/FlippingAmericaOnYouTube

Linkedin: bit.ly/FlippingAmericaOnLinkedIn

We now have a profile at houzz.com for what it's worth.

Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question.

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

• https://www.housingwire.com/articles/47354-heres-how-much-zillow-is-paying-to-get-into-the-mortgage-business
• https://www.housingwire.com/articles/47339-number-of-equity-rich-properties-soars-to-new-high
• https://www.inman.com/2018/11/06/what-opendoors-latest-pivot-means-for-real-estate-agents/
• https://www.nreionline.com/nrei-wire/10-must-reads-cre-industry-today-november-8-2018
• http://www.latimes.com/business/la-fi-ftc-real-estate-20181108-story.html
• https://therealdeal.com/2018/11/08/feds-shut-down-alleged-100m-real-estate-fraud-in-belize/

• https://www.zillow.com/rental-manager/resources/rental-management-guide/
• https://realestate.findlaw.com/landlord-tenant-law/landlord-tips-for-managing-property.html
• https://fitsmallbusiness.com/tips-for-landlords/

1. Pennies become dollars. The Rent is Priority. Wait a minute and suddenly they owe you 3 months.
2. Inches become miles. You set the rules and you must enforce them. Everything goes better if you are known as tough but fair.
3. Puppies become dogs. Address known problems immediately while they are relatively small.
4. Screen thoroughly. Don't be afraid to say no. Choose wisely
5. Know the fair housing rules, and train your team with them.
6. Apply the same rules to all rentals.
7. Know your local real estate laws.
8. Rehab for durability, with the bottom line in mind.
9. Collect payments through YOUR method, not theirs.
10. Never accept cash and make it a part of your written policy.
11. Never accept a partial rent payment.
12. Consider setting up ACH or other automated system for rent collection.
13. Pass the handling charge (up to 3%) for credit cards on to your tenant. They should pay for that convenience not you.
14. Create and communicate clear policy for collecting past due rents.
15. Incentivize good tenants and good tenant behavior.
    1. Discount if in office by 5pm on the 1st.
    2. Lower or no rent increases if previous 12 months ON TIME.
16. Use Property Management software- One lost repair receipt can be one less tax deduction and one misplaced lease can cost you months in eviction court. Using technology can help landlords streamline necessary tasks like listing their property, screening tenants, signing leases, collecting payments and handling maintenance requests. The last thing a busy landlord needs is to be bogged down with excel spreadsheets and hard copy documents, wasting time and potentially money.
17. Require renters insurance. Have your ownership entity named as an additional insured on the policy.
    1. Go to their policy first if damage is done by them.
    2. You'll be notified if their policy is canceled.
18. Own in an LLC. Engage in asset protection in your entity setup.
19. Conduct thorough move-in and move-out inspections. Document everything.
20. Conduct regular inspections. Notify tenant 48 hours in advance.
21. Communicate often with tenants
22. Hold security deposit money in a separate account. Don't touch.
23. Create and maintain your own system of hold-backs so you can pay taxes and insurance.
24. Repair promptly.
25. Have a clearly stated and enforced pet policy.
26. Keep cash reserves (2 months for each loan) to allow you to screen thoroughly.
27. Listen sympathetically, then enforce the rules. Soft hearts lose money.
28. Consider cash for keys rather than eviction. Cash for keys is a faster alternative to an eviction if the tenant agrees to it. It's a private agreement between the landlord and the tenant. The landlord agrees to pay the tenant to vacate the property and return the keys. Landlords do this to avoid the often time consuming legal process of filing an eviction with the court which can take months.
29. Never rent to family or friends unless you are willing to let them live there for free. Don't mix family and friends with your investment property business. No matter how wonderful it may be in the beginning, those close to you will expect more for less when renting from you. If the friend can't afford to pay rent one month, it now eats into your cash flow and puts you in an awkward predicament. Let them know it's nothing personal, it's just your policy to never rent to family or friends.
30. Use Legal Shield or a local real estate attorney to create a lease that is enforceable in your state.
31. Consider landlord insurance. This insurance helps to protect your investment from the expense of lawsuits and/or property damage. Landlord insurance should cover the structure, as well as lost rental income and personal injury occurring on or around the property. The policy differs from the policy on a primary residence since the investment property is a business.
32. Take advantage of the tax deductions available to you as a landlord. Consult with your tax advisor. If your tax advisor doesn't have more than one tax benefit for you, consider hiring a different tax advisor.
33. Treat this like a business. Because it is.
34. Consider the factors that will determine when or if you should hire a Property Manager
    1. Your schedule
    2. Your attention to detail
    3. Your bottom line
    4. Your investment goals.
35. Set your goal to grow large enough to hire management.

Call 404-369-1018, press 1 and leave your message!

[email protected] Tell us where you're from!

• Audrey, Monticello, GA, "Do you think about selling your rentals? How would you decide on this? I'm moving away and I'm not sure I want to keep the two rentals I have here in town."
• Sanders, Pittsburgh, PA, "My tenants moved out and for some reason just one wall in every bedroom needs to be painted. It's the wall where the bed was. I'm not sure of the cause, but I'm wondering whether I need to paint the entire rooms, meaning most of the house of can I just paint the one wall in each room?"
• Andrew, Alexandria, VA, "When will your latest FlipStarter event be available as a video series?"

"I don't make up jokes. I just watch the government and report the facts." -Will Rogers

Expected Air Date: 11/12/18

In the last show we talked about short term rentals. Today we are taking a more traditional approach with a discussion about landlording. I’ve owned and self-managed dozens of rentals properties over the years and I’ve also hired property management. I’m going to share with you the top 35 things I’ve learned so far. I’m pretty sure there’s always more to learn which is why I use the words “so far”. That’s coming up in a bit.

www.flippingamericanetwork.com

Facebook.com/flippingamericamedia

Twitter and Instagram @FlippingAmerica

YouTube: bit.ly/FlippingAmericaOnYouTube

Linkedin: bit.ly/FlippingAmericaOnLinkedIn

We now have a profile at houzz.com for what it’s worth.

Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question.

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

• https://www.housingwire.com/articles/47354-heres-how-much-zillow-is-paying-to-get-into-the-mortgage-business
• https://www.housingwire.com/articles/47339-number-of-equity-rich-properties-soars-to-new-high
• https://www.inman.com/2018/11/06/what-opendoors-latest-pivot-means-for-real-estate-agents/
• https://www.nreionline.com/nrei-wire/10-must-reads-cre-industry-today-november-8-2018
• http://www.latimes.com/business/la-fi-ftc-real-estate-20181108-story.html
• https://therealdeal.com/2018/11/08/feds-shut-down-alleged-100m-real-estate-fraud-in-belize/

• https://www.zillow.com/rental-manager/resources/rental-management-guide/
• https://realestate.findlaw.com/landlord-tenant-law/landlord-tips-for-managing-property.html
• https://fitsmallbusiness.com/tips-for-landlords/

1. Pennies become dollars. The Rent is Priority. Wait a minute and suddenly they owe you 3 months.
2. Inches become miles. You set the rules and you must enforce them. Everything goes better if you are known as tough but fair.
3. Puppies become dogs. Address known problems immediately while they are relatively small.
4. Screen thoroughly. Don’t be afraid to say no. Choose wisely
5. Know the fair housing rules, and train your team with them.
6. Apply the same rules to all rentals.
7. Know your local real estate laws.
8. Rehab for durability, with the bottom line in mind.
9. Collect payments through YOUR method, not theirs.
10. Never accept cash and make it a part of your written policy.
11. Never accept a partial rent payment.
12. Consider setting up ACH or other automated system for rent collection.
13. Pass the handling charge (up to 3%) for credit cards on to your tenant. They should pay for that convenience not you.
14. Create and communicate clear policy for collecting past due rents.
15. Incentivize good tenants and good tenant behavior.
    1. Discount if in office by 5pm on the 1st.
    2. Lower or no rent increases if previous 12 months ON TIME.
16. Use Property Management software- One lost repair receipt can be one less tax deduction and one misplaced lease can cost you months in eviction court. Using technology can help landlords streamline necessary tasks like listing their property, screening tenants, signing leases, collecting payments and handling maintenance requests. The last thing a busy landlord needs is to be bogged down with excel spreadsheets and hard copy documents, wasting time and potentially money.
17. Require renters insurance. Have your ownership entity named as an additional insured on the policy.
    1. Go to their policy first if damage is done by them.
    2. You’ll be notified if their policy is canceled.
18. Own in an LLC. Engage in asset protection in your entity setup.
19. Conduct thorough move-in and move-out inspections. Document everything.
20. Conduct regular inspections. Notify tenant 48 hours in advance.
21. Communicate often with tenants
22. Hold security deposit money in a separate account. Don’t touch.
23. Create and maintain your own system of hold-backs so you can pay taxes and insurance.
24. Repair promptly.
25. Have a clearly stated and enforced pet policy.
26. Keep cash reserves (2 months for each loan) to allow you to screen thoroughly.
27. Listen sympathetically, then enforce the rules. Soft hearts lose money.
28. Consider cash for keys rather than eviction. Cash for keys is a faster alternative to an eviction if the tenant agrees to it. It’s a private agreement between the landlord and the tenant. The landlord agrees to pay the tenant to vacate the property and return the keys. Landlords do this to avoid the often time consuming legal process of filing an eviction with the court which can take months.
29. Never rent to family or friends unless you are willing to let them live there for free. Don’t mix family and friends with your investment property business. No matter how wonderful it may be in the beginning, those close to you will expect more for less when renting from you. If the friend can’t afford to pay rent one month, it now eats into your cash flow and puts you in an awkward predicament. Let them know it’s nothing personal, it’s just your policy to never rent to family or friends.
30. Use Legal Shield or a local real estate attorney to create a lease that is enforceable in your state.
31. Consider landlord insurance. This insurance helps to protect your investment from the expense of lawsuits and/or property damage. Landlord insurance should cover the structure, as well as lost rental income and personal injury occurring on or around the property. The policy differs from the policy on a primary residence since the investment property is a business.
32. Take advantage of the tax deductions available to you as a landlord. Consult with your tax advisor. If your tax advisor doesn’t have more than one tax benefit for you, consider hiring a different tax advisor.
33. Treat this like a business. Because it is.
34. Consider the factors that will determine when or if you should hire a Property Manager
    1. Your schedule
    2. Your attention to detail
    3. Your bottom line
    4. Your investment goals.
35. Set your goal to grow large enough to hire management.

Call 404-369-1018, press 1 and leave your message!

[email protected]  Tell us where you’re from!

• Audrey, Monticello, GA, “Do you think about selling your rentals? How would you decide on this? I’m moving away and I’m not sure I want to keep the two rentals I have here in town.”
• Sanders, Pittsburgh, PA, “My tenants moved out and for some reason just one wall in every bedroom needs to be painted. It’s the wall where the bed was. I’m not sure of the cause, but I’m wondering whether I need to paint the entire rooms, meaning most of the house of can I just paint the one wall in each room?”
• Andrew, Alexandria, VA, “When will your latest FlipStarter event be available as a video series?”

“I don’t make up jokes. I just watch the government and report the facts.” -Will Rogers

Expected Air Date: 11/03/18

Hello everyone! If you are listening to this on our broadcast date of November 3rd, I am right now teaching the FlipStarter Course in Atlanta, GA to 40 future real estate millionaires. We are already planning our next events and are considering opening up to a larger group - perhaps up to 100, but we are trying to be careful that we are still able to give every person in attendance individual attention and personalized strategies.

Today we have some really interesting guests coming up Issi Romem and Jiyan Wei from BuildZoom will be joining us in a few minutes to talk about the BuildZoom platform. If you are on the hunt for a quality, previously vetted contractor, you want to stay tuned and listen to this interview with one of the top providers of contractor referrals online. Plus it's been a few minutes since I've answered your questions on the air and we have some piling up.

www.flippingamericanetwork.com

Facebook.com/flippingamericamedia

Twitter and Instagram @FlippingAmerica

YouTube: bit.ly/FlippingAmericaOnYouTube

Linkedin: bit.ly/FlippingAmericaOnLinkedIn

We now have a profile at houzz.com for what it's worth.

Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question.

• FlipStarter Nov 2-3, Atlanta, GA
• Lunch with me every Wednesday.
• Flipping America App is in the app store. You can listen to the show, read the show notes, and the entire catalog of shows is now available to you. It's a free download and there are no upsells or in-app purchases. Free to download, free to listen. Go ahead and give it a try and drop me a line and let me know what you think.
• Want a quick analytical tool to tell you how strong a potential fix and flip deal is? Download the Property Grade app. You answer 10 simple questions about the property and the app instantly tells you what you can expect to make, your return on investment, your return on cash, and then the program gives the project a letter grade using the proprietary Flipping America Investment Property Grade algorithm.

• https://www.cnbc.com/video/2018/10/31/southern-california-home-sales-plummet.html
• https://www.cnbc.com/2018/10/30/southern-california-suffers-its-worst-housing-slump-in-over-a-decade.html
• https://www.cnbc.com/2018/10/26/robert-shiller-i-dont-expect-a-sharp-turn-in-the-housing-market.html
• https://www.forbes.com/sites/keithflamer/2018/10/31/first-look-at-four-hot-skyscrapers/#5c4a96991907

Call 404-369-1018, press 1 and leave your message!

[email protected] Tell us where you're from!

• Jessica, Boulder, CO, "I'm having a hard time getting my contractor to listen to me. I think it's because I'm young and female. I can't do anything about that. But what can I do to make him do things the way I want?"
• Janet, Atlanta, GA, "I have a rental property that has just gone vacant. I'm strapped for cash and it needs a couple thousand in work before I can rent it out again. Without the rent I can't make the payment and without fixing it I can't rent it. Do you have any suggestions?"
• Eduardo, Phoenix, AZ, "I gave a contractor $9,000 to start a job. He came out and did some work but now wants $20,000 to continue. We got into an argument about it and he pulled his crew and refuses to come back until I pay him. He claims he has plenty of other clients and doesn't need to put up with me. The total project is $35,000. He's completed about $5,000 in work. What would you do?"

"Even if you are on the right track, you'll get run over if you just sit there." – Will Rogers