this is the beginner's guide to investing in real
estate in 2025 and in this video I'm going to break down everything you need to know to invest
in real estate from someone who's flipped over 650 properties in the last decade whether you've
invested in real estate before you have a 9 to-5 job and you've never done deals this video is
for you I'm going to break down everything from start to finish to get into your first deal or
how to scale your real estate business and I'm going to show you exactly how I did it without
ever visiting a property and without ever using my own money everyone in the real estate space
talks about the same exact thing over and over again but with this video I'm hoping to break the
internet and give everything that I know away for free the next hour and a half has broken into four
different sections section one is why should you invest in real estate section two where should you
be investing section three is how to find the best real estate deals and section four is how to
scale your real estate business so with that being said let's get into it so first and foremost
I want to talk about what is investing investing essentially is when you take your money invest
it into something and hope that that investment grows over time and makes you money and makes you
return over time and the goal with investing the goal with real estate investing or stock market
or putting into a 401k is that your money can grow without your time right most of us work N9 to five
jobs where we trade our time for money the goal with investing is to put our money into something
and watch it grow without my time and without my involvement now what they call Financial Freedom
is that when you're making enough money from your Investments without spending any of your time
that's when you become fin financially free to a lot of people now obviously with investing profits
are not guaranteed right you're investing you're taking some sort of risk it could be a low risk
but profits are not guaranteed and the timeline of those Investments also is not guaranteed which
is why it becomes a gamble to invest your money into anything now the one way that you can really
really reduce your risk is by education and first investing in yourself which we're going to talk
about later but taking your money that you have and really investing it in yourself into your
education so that you can be in control of your Investments more in control of your Investments
and have a clear lower risk profile with a higher profit margin which we'll get into when we talk
about real State strategies all right now I want to talk about why investing is important and
there's one major reason why I think investing is important and investing your money is important
is because you can make money while you sleep again all of us go to work all of us trade our
time for hours even if we make a salary we still work 40 hours per week right so we still have a
time per hour that we're exchanging exchanging with the company we work for the boss we work for
all that kind of stuff the one way you can break out of that is by investing your money taking
your money putting it into something and making a certain amount of money every single day every
single month that gets you out of the mindset of trading your time for money which I think is a
huge breakthrough for a lot of people the other great thing about investing is that it builds
wealth over time right it has compounding interest you know you invest 10,000 bucks you make $1,000
a month cool then the next month you're investing 11,000 bucks then the next month 13,000 bucks 16
you know slowly and slowly your Investments can compound and grow over time if you let them
sit there and you invest in the right thing with the right education the other reason I love
investing is it protects you from inflation now that we know why investing is important I'm going
to go over the different types of Investments so you obviously have real estate which we're going
to talk about in this four-part video series then you have stocks and bonds and 401ks and gold and
precious medals and starting your own business and crypto and art and foreign exchange there's so
so many things with us on social media that we get hit with on a daily basis of invest in this
invest here invest in this Airbnb invest in this Farm in Brazil right there's so many different
types of investment which is the right investment for you the last one I have on my list here is
investing in yourself and investing in you and I think that's a great place to start if you don't
have very much money a great place to invest is in yourself in your education so you can learn
something you can learn a skill that either you can go and charge a company more money for that
skill that you have right for example if you make 10 bucks an hour working at a job and you
can go and invest in a course or an education and make 30 bucks an hour that's a pretty damn good
investment right it doesn't get you into investing your money for cash flow or growing your cash but
it is a great way to make $30 per month which is a huge increase from the $10 a month you're making
previously now why should you choose real estate out of all those different Investments so my
story started I was around 8 years old and I started my first lemonade stand that was my first
business that I ever ever launched was a lemonade stand shortly after that my parents had a low
carb grocery store which I worked in from 8 to 10 years old and only lasted a couple years then
my parents started a sauce business uh and they started a sauce business it was sold around the
country I would go to Whole Foods and give out samples to people um on the weekends and after
school during the weekdays then Alibaba came around Amazon FBA came around and I started
importing stuff from China and selling it on Amazon FBA and I started my first real business
that was around 14 years old and throughout all this time I was selling stuff to kids at school I
would sell them candy and soda I would sell them hats I would import stuff from China bring it in
my backpack to school and sell it to everybody at school so I've been a very very entrepreneurial
person an entrepreneurial kid my entire life starting from seven-year-olds 7 years old to where
I am today at 28 years old so a very long time and there's a lot of different things that I have
tried to invest my money and invest my time but a big turning point for me was in 2015 2014 when I
went to a real estate conference and learned about real estate investing I learned about wholesaling
and fixing and flipping and apartment buildings I learned about so many different ways to invest in
real estate and for the first two years it took me two years to get into my first deal the first
deal I ever did was Memphis Tennessee I bought a house for $40,000 I eventually refinanced that
house and kept it in my long-term portfolio and then we started doing a turnkey Fix and Flip
business where me and my dad would buy houses renovate them rent them out and then sell them to
other investors which was the start of Martel turn key and that business is still around today after
doing around 650 of those projects I started a company called flip system to help other people
invest in real estate along the way using the software and teams and knowledge that we have
learned over the last decade so with all that being said all the different businesses that me
and my dad and my family have tried real estate investing is where we've built most of our wealth
and now I want to go over why I chose real estate out of all the different types of Investments
and things that I've tried why did I choose real estate so first and foremost real estate gives
you cash flow and passive income it's one of the few investment strategies out there that you can
buy something for $100,000 you can get financial leverage on it you can get a loan on it put down
$20,000 and make a couple hundred every single month there's hardly any investment strategies out
there that you get cash flow and you can use some sort of financial leverage another great benefit
to investing in real estate is appreciation so that $100,000 asset that we buy slowly will
appreciate over time over time over time and it's a hedge against inflation as well because
when inflation goes up so does your property value so you're hedging against inflation plus you
also get appreciation when you buy these kinds of real estate Investments another great thing about
real estate is the tax benefits that come along with real estate so there's tons of difference
Tax Strategies when it comes to real estate there's 1031 exchanges which means when you buy a
property you can sell that asset take those gains the net profit that you had made and roll that
into another investment and not pay any tax so that's a huge benefit the other thing is you get
a ton of write-offs with real estate uh there's tons of strategies you can take the asset strip
it down to its parts and take that on your income statement and actually write off a ton of stuff
with real estate the other great thing is that unlike a personal residence or primary residence
when you get a loan on an investment property all the maintenance and depreciation of that asset is
a write off as well so for example if you go and buy a turnkey rental property and you're making
$200 to $300 per month you'll probably end up paying very little taxes probably close to zero
because of the depreciation and interest payments and mortgage and maintenance requests and all that
kind of stuff that comes along with real estate control is also something that I love about real
estate in compared to the stock market for example I can take 20,000 bucks and buy a turnkey rental
property where I own it 100% I can do whatever I want with it I can burn the house down I can
increase the rent I can reduce the rent I can leave it vacant I can do whatever the hell I want
to right if I go buy $20,000 worth of Starbucks stock or Amazon stock or a Google stock I have no
control I just have to make sure that I think that business is going to be around in the long run
that those Executives know what the hell they're doing but again I have very little control if I
want to increase the return on my investment on a Starbucks stock not much I can do unless I go
and buy you know billions of dollars of Starbucks coffee in the next month but I don't think I'm
going to go do that real estate is also great because there's value add opportunities right so
I can again with the Starbucks stock example I buy $20,000 worth of Starbucks stock all right
cool now I'm going to spend all my nights and weekends to increase my stock value not much
you can do but I can take that $20,000 go buy a single family house in Memphis Tennessee I can
fly there I wouldn't recommend doing this but I can go fly there I can repair the house I can
repair the roof I can spend 5K on a roof I can put in a new toilet and slowly my property value
that $20,000 investment is now worth 3040 $50,000 because I am increasing the property value
and the value of that property that's another great thing with real estate is that you can get
your hands dirty because you have that control to increase that property's value and increase
your investment just with some manual labor real estate is also way less volatile again due to
a lot of these different components that I've talked about with the control with you being able
to go and increase the value of it you have way more control and it's way more stable than other
things for example like the stock market it's way less volatile so for example if there's another
2008 Market correction and Starbucks stock goes from $100 per share down to $30 per share not
much I can do extremely volatile or Bitcoin for example which is another great thing that's super
volatile it goes up and comes right down goes up comes right down it's almost like a vicious cycle
every couple of years real estate is not like that real estate does not go up and down up and down
up and down real estate is very very stable and it slowly goes up and to the right uh which is great
and that's the way we want it to go also if you look at rents I think for the last like 3 or 400
years rents have only gone up ever they've never gone down in the history so it's pretty crazy
to buy investment properties and watch the rents climb up every single year no matter what happens
so even in 2008 contrary to public belief many people thought that rents went down in 2008 more
people lost their homes and became renters in 2008 which caused the rents to stabilize and even go up
a little bit obviously it depends on the different cities and states that you invest in but actually
in 2008 and during times of recession more people move and become renters than homeowners so what
does that do the home values will come down rents will stay the same what does that mean it's
a great time to buy a rental property so even during times of recession where the stock markets
will crash if you buy investment properties you're very very stable another great thing about real
estate investing is if you're thinking about the long-term and building a legacy for your family
and your kids and your wife uh or your husband real estate has a lot of legal and financial
functions in order to pass down the real estate investment without having your descendants or
your wife or your kids whoever they may be pay lot of taxes or pay for getting a lot of that real
estate so there's tons of different structures and trusts and llc's and funds that you can set up
for your descendants so that you can pass off that real estate without them having to pay any
kind of taxes or pay any kind of fees for getting that there's a lot of other Investments out there
where you don't have that kind of Financial and legal instrument to pass down that real estate or
that asset down to your descendants all right now that I have given you a ton of Pros to investing
in real estate versus other investment I want to talk about the cons to real estate investing now
there's a few cons to investing in real estate number one it's not liquid right like I can again
go buy 20,000 bucks of Starbucks stock I can be like ah I don't like Starbucks anymore and sell
it the next day very liquid the cash it's my bank in three business days boom very liquid real
estate is a lot less liquid especially if you start doing larger deals multif Family groundup
construction you know your money could be locked in there for five or 10 years if you buy single
family houses like what I'm going to talk about and what I recommend your money is probably liquid
in 30 to 45 days so you can always sell a single family home there's multiple different ways you
could sell that asset to a family to an investor blah blah blah and it probably is going to take
you 30 to 45 days to get that money out so we buy a single family house in Memphis we invest 20,000
bucks it's worth 100K we want that money out cool we can list that property for sale hopefully get
a buyer in a week or two and they close 30 days later so it's pretty liquid but not as liquid as a
stock market or as Bitcoin or something where you can just it's on an exchange essentially and you
can just sell that and get the money in a couple days another con to real estate investing is
that it's not cheap real EST estate is not cheap across the country you can find some cities and
neighborhoods uh around the country where you can buy a house for 50 Grand but you probably have
to get a loan on that you probably have to put in $10 to $15,000 still for the cheapest piece
of property or cheapest piece of real estate in America today stock market I can go buy Starbucks
stock for $100 $100 investment $10,000 investment $100 is way less than a $10,000 investment so
there is a little bit higher barrier to entry to invest in real estate and there's a reason
why that's a good thing but it also could be a negative for example if you only have $5,000 it's
going to be hard for you to invest in real estate I would recommend maybe investing in yourself and
your education doing something else but if you don't have enough money to invest in real estate
it's going to be really difficult to do that unless you get creative unless you really like go
and raise private money or raise money from other people to get into real estate but it's a little
bit High barrier to entry so it's a con it's also a good thing because it's less competition most
of America I think 95% of America has less than 14,000 bucks in their savings account it was
it was either that or $7,000 in their savings account so there's a lot less competition a lot
less people can actually afford to invest and get into real estate which is great for you because
it means more deals all right now I want to talk about the actual physical real estate asset right
it's a risk to have a physical asset why is it a risk because there could be natural disasters
you have tenants living in the property you could have maintenance on that property and you
can have nobody living in the property where you have a vacancy right unlike the stock market or
other different types of Investments where you don't have these kind of issues because it's not a
physical tangible asset being a physical tangable asset is great because it always is going to have
some sort of value I can always sell the shingles off the roof one by one for a dollar I can always
sell the wood I can always sell the toilet I can always sell the fridge right there's always some
sort of intrinsic value with a physical asset but that also comes with cons right so maintenance
the tenant could go and break something or the roof on the house could cave in right so there's
different things that come along with owning a physical asset and one of those is maintenance
second thing is vacancy so vacancies are a big risk when it comes to real estate because if
your mortgage payment is $500 a month your rent is 1,000 the tenant leaves you're stuck paying the
mortgage payment every single month and vacancies are not good we want to fill those vacancies as
soon as we can another thing with real estate is you have to pay taxes you have to pay property
taxes not income taxes this is a different kind of tax this is taxes to own the piece of real estate
you pay this to the city or county where that property is located so for example if you have a
house in Memphis for 100k you have to pay Memphis city taxes and Shelby County taxes two different
kinds of taxes that's going to sum up to a couple thousand bucks per year typically if you get a
loan though the mortgage lender is going to take care of those expenses and just bill you for it
but it is another con to investing in real estate there is this other marginal cost and tax just
for owning a piece of real estate in that city or county now natural disasters are also another
con to investing in real estate again you have a physical asset there could be a tornado a
hurricane a flood there's tons of different natural disasters that could affect that piece
of real estate so that is one of the cons there's obviously ways to mitigate that with different
insurance policies and stuff like that but it is one of the cons to investing in real estate
is natural disasters last but not least on my cons to real estate investing is that it requires
management it requ requires somebody every single month to be managing that property collecting
rent keeping up with a maintenance request making sure the property is's in good working
livable condition so it requires management and typically you hire a property management company
to actually manage that the con to that is that they take around 10% of the rent as a fee every
single month so it is going to be another expense and a con to investing in real estate is that it
does require ongoing maintenance and management all right so now that I've laid out the pros and
cons I want to go over the different types of real estate investing methods right we have different
types of buildings and then we have different types of investing methods so first the different
types of buildings we have commercial commercial building will be like a big Warehouse right a
big warehouse and we're going to have like an auto body shop in that warehouse would be like a
commercial building a mixed use building will be an auto body shop with apartments above it that's
mixed use because there's two different types of uses then we have multif family which is top to
bottom purely multi family I live in an apartment building right now it's a 40 story building it's
completely multi actually it would be called mixed use because there's actually some retailers at the
bottom and then it's purely apartments on top but if I lived in a twostory apartment building which
Apartments top and down that would be considered a small multif family then we have single family
detached or attached single family a single family house pretty obvious what it is a detached single
family houses is when you have two single family homes that have some space in between if you go to
Philadelphia they love putting everything together and those are called attached single family houses
and the single family home detached is actually my preferred method to investing in real estate and
last but not least you have land so this is buying actual raw land and you can do developments
there's tons of different ways you can invest in land uh again not the biggest fan of land why
because it doesn't produce any kind of cash flow and it's hard to get financial leverage on it
now the investing methods how can you take all these different types of real estate assets and
actually invest in them first method the Burr method is when you buy something rehab it rent
it out and refinance it the great thing it allows you to build a portfolio over time with very
little Capital second is flipping houses pretty self-explanatory HDTV you buy a detached single
family house you renovate it you put it back on the market and you make a profit pretty simple
strategy next one developing you buy a piece of land and you develop a mixed use building you
develop a commercial building a multi building a single family house different types of development
which again in a high interest rate environment again not a recommended approach or strategy
at this time in 2024 last but not least is holding so doing a buy and hold so buying a multif
family and holding it buying a commercial building renting it out to an automobile manufacturer
and holding that property right there's also holding and doing a little bit of value ad so
buying an apartment building increasing the rent renovating the units and slowly increasing
the value of that land and that asset over time out of all these different asset types and all
these investment strategies what is my preferred method it's a method that I made up on my own and
it's called the flip system method and you may be asking what is the flip system method flip system
method is a combination between the bur strategy and a flipping strategy it's essentially where you
buy the asset you renovate it you rent it out and then we have multiple different exit strategies
we can either refinance out the property and keep the tenant we can not refinance the property
and hold it keep the current loan that we have we can sell the property as a turnkey investment
meaning we go sell this asset to somebody else who's an investor who wants to buy that asset
and hold it for the long run that's essentially the strategy that I did with martal TurnKey right
buy the house renovate it rent it out sell it on my website martal turkey.com to an investor who
wants to buy a cash flowing asset and I make a shortterm profit and they keep the long-term cash
flow every single month now the great thing about the strategy is that it's safer than almost all
the other strategies combined the reason why is because you have so many different exit strategies
you can refinance the house you can sell it you can list it as a retail Fix and Flip you can hold
it you can keep the current loan there's so many different ways that you can do these deals and the
reason why is because it is a single family house I couldn't do the same thing with apartment
buildings or multif family or commercial the reason why is because there's not that many exit
strategies with those kinds of Investments and you're looking for big big buyers that want
to buy multif family for example if I buy a $2 million apartment building how many people on
planet Earth can afford to buy A2 or $3 million apartment building not that many how many people
can afford to buy a $80,000 house in Detroit lots of people right investors tenants can buy it
I can do a lease back to the tenant where the tenant can actually own the property in a couple
years so doing this strategy with detached single family houses gives me tons of exit strategies
and different ways to make money on the deal which means that the risk is severely reduced because I
have so many different ways to make money another great benefit to the strategy is that it allows
you to grow your cash and your portfolio at the same time why because you are able to buy the prop
with the same exact house at the end of the deal you can either choose to refinance it or sell
it for a profit cool so I buy four houses this month right all those projects are going to
be done in the next 3 4 5 6 months I sell One refinance one sell One refinance one cool now I
have more money in my bank and I have a larger portfolio at the same exact time right that's why
the strategy is so great because it allows you to grow your portfolio and also grow your Capital
at the same time so you can start this entire flip system method with $220,000 you can go buy
a house rehab it rent it out refinance it or buy a house rehab it rent it out and sell it you can
get 40,000 bucks in your bank now now we can do two deals one we're going to refi one we're going
to sell I'm going to give you you all the steps that it takes to implement the flip system method
first and foremost it always starts with finding a distressed asset in a good neighborhood so we want
to go and find a single family house that needs renovation where we can buy it renovate it rent
it out and then have one of the excess challes right so we want to go find this asset we're going
to look on Zillow and redin and Trulia we want to find something below $100,000 typically in a city
in the midwest that we can buy and rehab and rent and then sell it or refinance once we found that
asset we want to make an offer on that property we're going to make an offer with our real estate
agent get that house under contract send out an inspector and lender and contractor we're going to
get all that information back once we've collected all that information we're going to move forward
with the property or back out of that deal if we decide to move forward with that property we start
construction right away typically on construction costs you want to spend anything from 20,000 bucks
to $40,000 you don't want to spend too little because you're not going to be able to get up
to the apprais value and you don't want to spend too much because that's going to have a lot of
complications for your first deal so to keep your first deal squeaky clean I want you to spend 20
to $40,000 in renovation on that first deal once we are done with the renovations it's time to list
the property for rent and to get a tenant to move into that property we want to do this as soon as
possible we don't want to get greedy at this point we don't want to list it as a retail Fix and Flip
we want to buy the house renovate it rent it out as soon as we possibly can this is going to reduce
the risk to property breaking and also increase our return on investment now once the tenant has
moved in we're going to have a property management in place so even before all of this which we're
going to talk about in a future video we want to build a team on the ground right the property
manager realtor contractor so we already have a property management company in place they're going
to take photos find the tenant place the tenant and then they're going to manage that property
thereafter right so now we've bought the house renovated it rented it out property manager in
place now it's time to explore all the different exit strategies and we do this by looking at the
numbers and looking at the numbers very detailed option one is to sell this house ready to go as a
rental property as a turnkey rental property right so we can go and list it on maral turkey.com we
can list it on many other websites and we just say this is a turnkey rental for sale there's a tenant
in place Property Management in place the house is Cash flowing do you want to buy it I'll even give
you a lender to help you finance this investment so that's option number one which I always look
to sell the property and make a quick return on Capital the great thing about the strategy is
that you make money on the sale and the investor makes the long-term cash flow if after listing
the house for 30 to 45 days you can't sell the property it's time to start the refinance process
as soon as possible typically to get into these kinds of deals you probably used a hard money
loan so that's going to be a lender that funds your rehab costs plus also the purchase price but
they're typically really expensive so if we can't sell the property we've done a ton of marketing
trying to sell the property and we can't sell it it's time to refinance that asset so we're going
to go and get a long-term loan go to like a Bank of America America Chase WS Fargo you can start
there you go and get a refinance on that property you refinance out the old loan you get a new loan
you hopefully get some money back in the bank and now you own a property and that property is part
of your portfolio now once you've completed this if you go with a refinance process or the sale
process you're hopefully going to have some of that cash back in your bank and now it's just time
to start the snowball and do it again and again and again and slowly picking up speed all right
so a little quick tip here I've helped over 500 people get into their first deal using the flip
system method and one of the main pain points that people have and one of the things that people
don't follow my direction on is they buy the house they renovate it and they get greedy and they go
try to list the property as a retail Fix and Flip the problem is most of them get broken into at
that point why because now they're listing this completely vacant house that they bought for 100k
for 150 160 170 the criminals know that nobody's living in it they can take a brand new photo of
an HVAC hot water tank brand new kitchen flooring bathtub right the criminals now go break into
that property and steal everything and it slows them down a ton they have to spend $5,000 trying
to repair not following the flip system method the biggest way to prevent a Breakin is by having
somebody live in the bloody property so if you buy the house renovate it and rent it out immediately
you're really going to reduce the amount of break-ins that you're going to have which is
going to increase your profit and also increase your happiness overall with real estate investing
now that I share with you a little bit about the flip system method I want to talk about what you
need in order to invest what do you actually need in order to go out there and implement the flip
system method first and foremost you're going to need to know the difference between good debt
and bad debt right bad debt is when you go and buy a primary residents and you pay a mortgage
payment every single month you go make money at your job and you pay this expense every single
month you have to pay for the mortgage payment every single month on your investment property
however your tenants are paying for the mortgage payment every single month not you so good debt
is when other people pay off that debt for you bad debt is when you have to go spend your time
for money to pay off your loan that is a bad debt situation and that is a liability versus an asset
you're also going to have to have two important things to invest in the flip system method number
one is you're going to have to have a good credit score good credit score is anything above 680 if
you are 600 and above that's okay but you really should focus on getting your credit score above
680 we have a lot of people apply to flip system every single day and one of the biggest reasons
why they can't invest in real estate is because they have poor credit scores there's tons of
softwares and companies out there that can help you increase your credit score by a couple hundred
points in a couple months please go sign up for those companies and increase your credit score
to above 680 second thing you're going to need is Cash like I mentioned one of the problems with
real estate investing one of the cons is that it takes cash to get started it's not like the stock
market you can buy stock for $100 you're going to need 10 20 $30,000 to invest in real estate and
implement the flip system method correctly I would recommend saving up at least $25,000 before
implementing the flip system method even if we bought the cheapest house in America the other
benefit of increasing your credit score is that you're going to get cheaper debt the higher your
credit score if you have a 750 credit score your interest rate could be 6% if you have a 680 credit
score it's going to cost you an 8% interest rate right so the more that money that we spend the
more time that we spend improving our credit score and there's tons of different ways that we can do
that the lower that our cost of capital is going to be which means we're going to get get a higher
return on our investment when we invest in real estate a couple other ways to also improve your
credit score is make payments on time keep your balances low pay down your debt do whatever the
hell you have to do sell a limb to pay off your credit card debt I would highly recommend doing it
I would avoid taking on any new debt uh when you go and get a loan the banks and lenders are going
to look at debt to income so they're going to look at how much money you make and how much debt you
have right if your debt to income is 90% they're like how the hell can this person afford to even
get a loan so if you can increase your income number one or two reduce your debt or do both it's
going to be a great way to increase your debt to income or reduce your debt to income I mean which
is going to allow you to get better loans larger loans cheaper loans um from Banks so if you don't
have $25,000 saved up but you want to work towards saving up $25,000 I have a couple of tips and
couple of recommendations you're going to need this $25,000 for the down payment on the house
for potential repairs uh unexpected expenses that come along with it closing cost negotiating power
all these kinds of things that's why you're going to need the 25,000 bucks if you don't have the
$25,000 right now I would highly recommend cutting out as many expenses as you possibly can to save
up to that $25,000 Mark that means canceling subscriptions not eating out reducing waste
negotiating bills with the credit card company with the telephone bill with the wifi reduce your
living expenses so live below your means if you're making 10,000 bucks a month and your total monthly
expenses is 8,000 bucks you're never going to have enough money to invest in real estate right if
you make 10K a month and your monthly expenses are $2,000 $11,000 a couple months you're going
to be there you're going to be at $225,000 in the bank and have enough Capital to go out there and
invest in real estate so you can number one try to make more money at your job it's going to be
very challenging to do so another thing is you can control reducing your expenses which is going to
be way easier if you just live below your means it doesn't have to be a forever thing but it could
be a temporary three or six or N9 month thing that you do to just put some money in your bank
to be able to go and do that first investment now that you know why you should invest in real
estate we're going to talk about where you should invest how to choose the right City how to choose
the right State how to choose the right Market to invest in then we're going to cover how to build
a team within that market how to be find the property manager realtor and contractor in that
local market to help you invest there's really two ways to invest you can either invest locally
in your backyard or you can invest out of state so when I first started investing in real estate I
was living in California I could have invested Loc Al which I tried for 2 years that's why it took
me so long or I could have invested out of state which now I am professional at investing out of
state it is my bread and butter to invest out of state versus investing in my local backyard and
most people choose to invest locally instead of investing out of state why do they do that because
it's way less risky it's way easier to go and see your properties it's way easier to be involved in
every single step of the process which is all the wrong answers I prefer to invest out of state
because it forces me it requires me to build a team on the ground that can function without me
being there I am now not a plumber or an HVAC or an electrician or a property manager but if I
manage the property next door I probably would want to get my hands a little bit dirty which is
great it makes the deal more profitable because I don't have all this overhead but in the long run
it doesn't help me scale which is great because it reduces my cost and increases my profit on that
deal but it's going to make it really really hard for me to scale up a real estate business if I'm
ingrained and do every single little job with that one property or second property so in my opinion
actually investing out of state is better safer and more doable and more scalable than investing
in your local backyard and buying the house next door number one is affordability so for example
when I was in California the minimum house was like half a million dollar then you would have to
renovate it for $200,000 to sell it for a million bucks to make1 or $200,000 in profit but then you
had a hard money lender then you had to raise Gap funds and you had to do all this kind of stuff to
get one house and I had to come out of pocket with 200 Grand which me or my dad and my family didn't
have that kind of money we had around $40,000 that we wanted to invest in so that's what led us to
investing out of state our first deal we bought it for $35,000 and renovated it for $5,000 we
did the Deal completely cash for less than the down payment of doing a house in California
and for other people that want to invest in real estate it's a way more affordable option you
can get into a deal today with 15 or 20,000 bucks instead of investing in your local backyard and
spending 1002 200 $300,000 of your hard ear money on just one deal now in that same example let's
say we did a house in California we put $200,000 into that house and the deal goes south right we
lose all our money on that house the great thing about investing out of state because the deals are
so much smaller I can take my $200,000 cash let's say if I had that and I can do 10 deals instead
of just doing one deal so it's actually a safer game plan because now I have 10 chips on the table
instead of betting on just one house another great benefit of investing on a state like I mentioned
is that you get to get out of the weeds right you're forced to use a team to build a team on the
ground to do the things that if the house was next door you probably would get your hands dirty with
with painting and flooring and Carpeting and HVAC and you turn into an electrician overnight but if
you invest out of state you can't do that you're not going to take a plane after work every single
day or every weekend to go clean up the house no you're going to have to think about it and say
who can I hire how can I reduce this cost and then how can I increase the rent or make make this
business or this real estate asset profitable another reason I love investing out ofate versus
locally is that I can find deals on the MLS and there's a ton more inventory in markets in the
midwest out of state than there are in probably your own local market so I've interviewed a ton
of people that join flip system from New York La um San Francisco Miami that have invested in
real estate locally and also with flip system and I think one of the biggest differences with
investing out of state is that there is a lot more inventory Detroit right now if you go to
Detroit Michigan and you look on Zillow there's 3,000 active listings below $100,000 because there
are so many more listings on the MLS and on the market with real estate agents you as the investor
don't have to go and get creative to find your first real estate deal for example if you were
going to flip houses in California probably 80 to 90% of the deals you were going to do are going
to come from off-market inventory from wholesalers from Real Estate pocket listings from networking
from people you know and that's a much harder route and much harder path to get into your first
deal versus investing out of state in a place like Detroit with 3,000 active listings 80 to 90% of
your deals now can come from the MLS and when you first start I recommend 100% of your deals
coming right off the MLS right off Zillow and Redfin and Trulia and realtor.com you can go to
these websites make offers on these websites find deals that way you don't have to get creative you
don't have to reach out to wholesalers you don't have to do your own marketing the inventory
is there and then when you buy one of these houses on the MLS you have way more favorable
laws there's different kind of States some states are landlord friendly some states are more
tenant friendly and some are right in the middle right Detroit Michigan for example would be a
state that's right in the middle Ohio would be a place that's much more landlord friendly which
means it's better for business for you for example if you have a non-paying tenant or you want to
get a tenant out of the property it's going to take you 30 to 45 days in a place like Detroit
Michigan it may take you 90 days in a place like California may take you 6 months or 12 months
or maybe never so that's why we like to invest in places that are much more landlord friendly
it's going to be better for business it's going to allow us to scale our business and make our
business profitable which allows us to invest even more last but not least one of the great things
about investing out of state is that you get to open your mind up to emerging real estate markets
for example I live here in Miami there's certain neighborhoods in Miami that are coming up that are
sprouting up where the houses are going from 500k to a million bucks but imagine if I opened up all
of America to where I wanted to invest how many cities do you know of right now that are coming up
think about Nashville or Atlanta or Austin Texas imagine if you can find the next Nashville next
to Austin right and you can go buy those houses today for 100 or 200,000 bucks and watch those
houses Skyrocket to three four $500,000 over the next 5 or 10 years that's probably one of the
most fun things about investing in the midwest or investing out of state is that you get to go and
taste and see all these different kinds of cities and see where you want to put your hard-earned
money and what city you believe in the most to grow all right so let's say that you're sold on
investing in real estate out of state which I hope that you are we now have to go and choose the
right state so what do I look for when investing in real estate out of state how do I choose a
state and what are some things that I look out for so one of the first things that I look for in
a market and in a city is the 1% rule so the 1% rule is going to be a rent to Value ratio and I
want this rent to Value ratio to be as close as 1% as possible so what do I mean I want to find
a house for $100,000 where the rent is $1,000 per month so a 1.0 rent to Value ratio rent to
Value I want it to be 1.0 now in Miami a million doll house in Miami probably rents out for $5,000
per month that is a 0.5 rent to Value ratio do I want to invest in Miami no California $2 million
house rents for 10,000 bucks a month 0.5 rent to Value rent ratio Detroit Michigan I can buy
a house for 70,000 bucks that rents out for $1,200 per month that's greater than a 1.0 rental
value ratio this rule of thumb essentially means is the property going to cash flow or not so the
closer that you get to that 1.0 rental value ratio the higher probability higher likelihood that
that property is actually going to cash flow and that's one of the great benefits of investing in
one of these places is that you can get the cash flow you don't have to just buy an asset lose
money every month and then hope it appreciates over time so I want to find a place where I can
get that appreciation of 3 to 8% every year but I can also make cash flow every single month so
we want to find houses and find a place a state or a city that has that 1.0 rent to Value ratio
and real quick the way that you can find this you can essentially go to a bunch of different
cities and you can find the median home price and median rent just use those two numbers and
try to get them to 08 or 1.0 as close as you can and then that's going to be a city that
we want to dive deeper into now talking about appreciation and talking about the growth of a
city I want to find a city that's not booming I don't want to invest in Austin Texas right now
it's too late I don't want to invest in Nashville right now it's too late but maybe I want to invest
in a place like Detroit Michigan which I think is really really cheap right now and affordable but
I can see the potential maybe I want to invest in Cincinnati which I went and visited the home
prices are really really cheap and affordable and I can see those home prices growing so I
essentially want to find houses and find cities that I see a long-term Vision with that could be
the next Austin the next Nashville that have a little bit of flavor have some community that I
can invest in and watch it grow over time so I'm really not looking for the top 10 best cities to
invest in most of those cities are going to be way too late we want to find those cities before
they hit that list and that goes along with population growth as well I don't want to invest
in a city that's having some sort of hockey stick population growth tons of people are moving in but
the home prices haven't caught up yet I prefer to invest in a place that's a little bit more flat a
little bit more stable that I can see the vision of I can see the potential of that place growing
over time and one of the the reasons why I think a lot of these states and cities catapult uh like
Nashville and Austin and all these different kinds of cities that we love there's a couple different
reasons why number one is bodies of water people love water I think human beings love water whether
it be lakes or oceans but people during the summer months Across America love Lakes they love going
into lakes they love going into different bodies of water so if you can invest and find a
city that has some sort of body of water that is usable and people use it in the summer
that's going to be a good sign another one is no natural disasters this is going to significantly
lower your insurance cost on the properties for example investing in Florida we have hurricanes
here they you have to get super expensive insurance which really eats into your cash flow
and makes the properties way less profitable major sports teams is a big one Cleveland Ohio
this was a huge selling point and really builds a community within that city or town where you may
be investing so I look for a city that has sports teams or maybe sports teams even coming if you
invest in a city that's super super early like ash North Carolina is a city that's kind of been
blowing up a little bit they don't have any major sports teams but maybe they are announcing
one or maybe they have a sports team coming into the future right those sports teams whether you
like sports or not really build a community within that City and it's something that people are very
prideful of not only with their city but then also with the real estate that they own and they take
care of it because of those sports teams in that Community something else I look for is shopping
and restaurants and live music Parks matur trees all the different things that human beings love
to enjoy during the summer or the winter months no matter when it is things that we can go to
that are enjoyable that you can see people using or maybe they've built a new shopping mall or done
this new thing or there's new yoga studos popping up all those kinds of things are leading me to
believe that people are moving there and using these amenities throughout the year some other
statistics that I look for with the city and with the state is also the unemployment rate and
crime rate so unemployment rate is how many people or what percentage of the workforce is actually
unemployed you don't want to invest in a city that is run down or they don't have a lot of jobs
so you want to make sure that the employment rate of the city you're investing in is pretty close to
the national average same thing with crime rate I don't want to invest in a place that has super
super high crime I want to invest in a state or city or county that probably is just national
average in terms of crime diverse economy I don't want to invest in a city or a state that has 100%
of the jobs or 80% of the jobs in one industry that's what happened with Detroit Michigan that's
why Detroit Michigan collapsed it's cuz 80% of the jobs were in automobile manufactur ing then
China was like hey we can do that for a tenth of the cost all the companies started making cars
in China bye-bye Detroit do you want to invest in a place that has a diverse economy where no
industry takes up more than 25% of the total jobs that's going to make sure that if one industry
leaves the city or state or county that you're investing in will be okay major employers one of
the reasons people move to different cities and different states is because of major employers
that are there if you have Amazon and Google and Facebook in the city that you're looking to invest
in that's amazing because those people are going to hire a ton of people those people get paid
well those people pay rent on time so those are going to be great places to invest in also you
can look at who the current major employers are for example if the major employers are Blackberry
or companies that you see going out of business in the next 5 to 10 years and they still have a ton
of employees in that city or state or county that you're investing in I probably would recommend
not investing in a place that you don't believe in the companies that are actually hiring and have
the most employees in that city or state or County another thing to look out for is call Coles and
universities so St Louis has amazing universities like they have a top 10 University there in the
healthare and medical field so if you can find a city that has some amazing universities that's
going to bring in a ton of college kids they go get their education they have to have somewhere to
live for that 3 four five years and then when they leave they're going to go and get good paying jobs
since they're already in St Louis they'll probably try to find a job there locally which is great
because you have a college educated person that is looking for a place to live they're making
good money and that turns into great renters and great people to live in your properties
something I look for more neighborhood based is owner occupancy rates so when I go invest in a
city or invest on a neighborhood within a city I want to look at owner occupancy rates what that
means is what percentage of the people in this neighborhood and this ZIP code in the city own
their own home I want that to be around 5050 or 6040 leaning more towards the owner occupied owner
occupied means somebody owns the house that they live in and they don't pay rent they own their
house and they pay mortgage on that property the people who own their own home take take care of
their home and take care of their neighborhood and Community a lot more than a renter would a renter
is way more transient they leave every couple of years a homeowner could stay in that property for
10 20 30 40 100 years so they're going to take care of it take care of the community and if you
have a high percentage of people of that community that own their own home have been there for a
really really long time that's going to make for a great community and a great long-term investment
now last thing I want you to go and follow some big whales go find some people on social media
like myself that are investing out State see where they investing people that have done the research
before like I have have done all this research on all these cities Across America so you can either
go do it again or you can follow some of the whales go look up some people that are investing
out of state some people that are doing TurnKey fix and flips or flipping houses where are they
flipping why are they flipping there why are they having so much success and go follow some whales
could be a really really quick shortcut to finding some good markets out of state all right so now
that I talked about the criteria that you should look for I want to talk about how to do the
research on these cities about those different things and different topics so there's a couple
ways that you can do it number one is tuning into the news so tuning into the news about where
people are investing where they're having success where are companies moving to what companies are
moving to what city in the Midwest for example like this new company is moving to St Louis and
they're hiring 50,000 people like that would be a great news article to find find out where
they're moving to look at the house prices around there see if you can buy some houses next to that
new facility which could be done in 3 4 5 years that gives you time to go and buy houses in that
neighborhood before that development is done you can also join join online communities and go in
in-person meetups this is something that I did for the first 2 years of my investing career I went
to a ton of meetups in and around La pick people's brains around where they were investing what
they were looking for if they weren't investing locally which I hope they weren't where were the
investing out of state and why and so going and picking other people's brains and seeing what
other people are finding could be a good first step in choosing the right Market one thing my dad
and I did a ton of in regards to all this research and data was we found a ton of Statistics so we
went to the Bureau of Labor Statistics bls.gov you can go there and find all of this data that
I just talked about completely online completely free now you obviously have to know how to use
the data and leverage the data to figure out the answers to your questions but if you can do that
I'll go to the bls.gov and check out all the stats that you can find there and figure out if you can
find some stats that would answer the questions that we just went over last thing chbt is also
a great tool that you can use if you get the pro I believe that it can actually read the internet
so if you use that tool can ask it impr prompted different questions where should I be investing
why should I invest there or this is what I'm looking for can you find some cities that could
match all of these boxes now since I've already done all this what states would I pick and what
states and cities did I choose to invest in over the last decade I dad and I ran a ton of numbers
and a ton of stats on all these cities and many different cities and states Across America my dad
was actually an actuary and ran dozens and dozens of these different stats reports and we landed
on the following states Michigan Ohio Tennessee Missouri Alabama New York Indiana and Kansas so
these are the states that we chose and then Within These States we chose a ton of different cities
Detroit Memphis Cleveland akan St Louis a ton of different cities Within These states to invest
in that match a lot of this criteria that we were looking for so if you're looking to start and you
want to invest I would start with those States why I've already done all the research you can go and
do it again as a great learning experience but if you want to skip to it you can just go and look
up those cities and see if those cities would be places you would be interested in investing in
all right so why did I pick those cities within those States now we're going to go over the
criteria that I look for in a city within the right State once we've chosen the right State the
criteria that I look Forin that City to make sure that it's going to be a good investment for me in
my portfolio so first and foremost I want to find a city within a state that has a ton of inventory
so remember like I mentioned Detroit Michigan has 3,000 active listings I want to invest in a city
like that I don't want to invest in a city that may be in a great state that has great landlord
tenant laws but it only has four active listings it's going to be really hard for me to do anything
there's going to be so much competition on those Ford listings I'm never going to get a deal done
so I want to have a city that I go on Zillow I put in my criteria of below $100,000 and I find
hundreds and hundreds and hundreds of available properties that I can buy below $100,000 so that's
a first step is lots of active inventory the next thing I look for within the city is I want it
to be safe and I want to look for B and C-Class neighborhoods so an a class neighborhood
is going to be your Prime downtown A+ plus luxury you know home that would rent out for the
very very topof thee line people the doctors and lawyers and that kind of thing I don't want to
buy that the reason why is those properties are very expensive and they don't cash flow well
I want to find stuff that's B and C-Class so it's a little bit of white and blue collar there
may be more crime than the a class downtown Prime neighborhood but it's going to be more Workforce
housing and working class housing those are the kind of properties that I look for I'm okay with
a little bit of crime I'm okay with being 30 minut outside of downtown where these people may work
but the rent to Value ratios and the cash flow on these properties out in the suburbs are going to
be way way better the other thing that I look for in a city before I start investing there is can I
find a good team on the ground in that City there are so many cities in America that I found that
matched my criteria that look like great places to invest in and then I call some property managers
and I can't find one property manager that I would like to work with I can't find one realtor that I
would like to work with obviously that's going to change with time cuz property managers are going
in and out of business Realtors are coming in and out of business so that's going to change with
time but that's one of the main deciding factors if I can find a city that looks amazing but if
I can't find a team on the ground to do the work that I need done it's not going to be a place that
I want to invest so again like I mentioned some of the cities that I invest in Detroit Cleveland
akan St Louis all these cities are great places to invest in and this list again is always evolving
as companies and teams go in and out of business the list is always ever changing and constantly
changing as the environment changes all right so now that we've chosen the state we chose a city
now within that City we have to find the boots on the ground team which again is one of the deciding
factors if we should invest in that City or not so who is on that team that team is going to consist
of a property manager realtor contractor lender title company insurance company accountants
lawyers etc etc etc so I want to find all of these people within that City to help me grow my
real estate investing business and the reason why they're so important is because the realtor is
going to help me find the deals the contractor is going to help me renovate the deals the title
company is going to allow me to buy those houses as well as the lender is going to help me Finance
those houses the property manager is going to find the tenant and manage the property right so all
these different people have their key elements and the key process of the deal that they manage
for me and for my business and you'll be thinking wow that's a lot of people Antoine how am I ever
going to make the deal make sense trust me you can still make the deal make sense a lot of these
people get paid on a per deal basis they get a certain percentage of the deal as it goes through
different stages and they get paid on different things right like a title company charges you a
flat fee of 500 or 750 bucks the property manager makes a certain percentage of the rental income
the realtor makes a certain percentage of buying and selling the houses right so these deals are
still going to make sense financially even though it sounds like a lot of people ingrained in the
process we want to give away parts of this deal if the deals are successful if they make money
they're going to bring us even more deals which allows us to grow our business all right so how
do you build build this team the first and most important person you're going to need is a real
estate agent you need the real estate agent to once you find a house on the flip system portal
or on Zillow redin Trulia you want a realtor to be your buyer agent to submit a ton of offers how
do you find this realtor cold calling looking on Zillow recommended agents and just reaching
out to a ton of them I would call all of them when I first started I called 300 real estate
agents and I would call all them hey my name is Antoine I live in California I'm looking to
invest in Memphis Tennessee can you help me find houses renovate them rent them out and then
sell them or refinance them real estate investing sucks all right hang up and call the next person
99% of the Realtors you call are not going to be investor friendly don't want to deal with houses
below 100,000 bucks so it's going to be really hitting the phones as much as you possibly can
to find Realtors on the ground that are going to be good to work with at the end of the day you
want to find a realtor that's interested in making money with you and making money along the process
right A lot of them don't want to do this kind of dirty work deal with investors do deals for 50
or 100,000 bucks so you're just going to have to keep calling and keep hitting the phones until
you find somebody that does and is interested in doing so next person you need on your team which
is very important is the property management company so the property management company once
you've bought that house renovated it you need a property manager to find the tenant and then
manage that property over the long run best place to find these people is really on Google is
it's going to be way less phone calls than calling the Realtors and the real estate agents you're
probably going to have to call 10 to 20 Property Management compan companies keep following up
with them if you don't know what to ask them that's okay just go on chat gbt and say I'm hiring
a property manager out of state what should I ask them it's going to give you a list of questions
at the end of the day the questions don't really matter all that much trust me I have created an
amazing script to cold call property managers for my team when we were growing Marshall TurnKey
into tons of different markets it didn't really matter if we asked them certain questions or not
it really is trial and error so just take it as that it's trial and error you're going to have to
try out these property management companies see which one works for you next piece of the team is
going to be the contractors contractors is going to be probably one of the most challenging things
that you're going to need to find investing out of state my little hack for finding good contractors
is to not find contractors at all what do I mean by that I mean that you want to find a realtor
or a property manager that already has access to contractors and you can pay them a fee to
be your project manager so my little hack for managing contractors is to not manage them at
all find a realtor find a property manager find somebody that already has a Rolodex of contractors
on the ground that can do the renovations that you desire to renovate the property to be able to
rent it out or to sell it the next important one is lenders lenders like hard money lenders
are going to allow you to buy these houses with very little cash out of your pocket so these
lenders which are called hard money lenders are probably going to fund 80 to 100% of your deal
and fund 100% of the renovations so you can go and find lenders online by typing St Louis hard
money lenders Memphis hard money lenders you can start there and call call some of those companies
some of the biggest ones in the industry are lima1 capital and kavi you can reach out to them I think
they lend in all 50 states so if you want to start there you totally can but I would just type your
City on Google and try reaching out to some of those lenders that could help you buy those houses
renovate them and then refinance them later some of these hard money lenders also will do long-term
financing so not only do the Fix and Flip loan but also do long-term financing like 30-year financing
which you can leverage them for as well next thing is legal so these hard money lenders and when
you're buying these houses with the hard money lenders they're going to require you to have an
LLC created so if you don't have an LLC created don't worry about it don't make this I feel like
a lot of people get stuck here with a legal aspect like I don't have an LLC I can't invest in real
estate okay $300 in legalzoom.com you can make your LLC and be Off to the Races so don't let an
LLC stop you it's super super simple super easy to make a single member LLC you just go to Legal
zoom.com or make an LLC on Google and you'll find a ton of companies that can help you make an LLC
for 100 bucks I would start there and make the LLC because the hard money lenders are going to
require you to have an LLC they're not going to lend you money to your personal name so I would
go make an LLC online again you can do this as you're making offers too don't worry about having
an LLC or not having an LLC you can totally get started on everything else the LLC you can get
a couple of days before closing or a week or two before closing it doesn't really matter all right
last thing is taxes a lot of people when they're investing in real estate are worried about taxes
oh I'm not going to invest and make money because then I have to pay taxes that's what happens when
you make money you have to pay taxes um typically your CPA your regular CPA should be able to handle
you buying one or two or three rental properties per year without changing or finding a new CPA
that is real estate related if you feel like your CPA is not up to par and not up to where you
want you can always go and find a real estate CPA in your local market that can help you with the
real estate savings and tax savings and all that kind of stuff in terms of bookkeeping and keeping
track of all the books and all that kind of stuff when you're first starting I would just use Google
Sheets and just track income and expenses and just at the end of the year you can give that to your
CPA and be like hey here's this house I bought I bought it for this here's the closing statement
the HUD here's all the income and here's all the expenses the end of the year your property manager
is also going to give you a piece of paper that you can just hand over everything to your CPA
at the end of the year like here's what I bought here's how much money I made here's all the money
I spent on it all that stuff so if this sounds like a lot of work it is real estate investing
is a lot of work and I know that this video video number two has been very very beefy on choosing
the market building the team this is where a lot of the work and we really have to grind it out
it's not going to be three phone calls here three phone calls there and boom I chose my market and
built my team it's not that easy it takes a lot a lot of time again it took me two years of doing
this process in video to find my first deal out of state and actually buy that property but it's
totally possible and you can do it if you put in the work again took me thousands of cold calls
took me traveling to all these different markets shaking a bunch of hands to find the right team
and find the right City find the right Market to invest in so you can totally do it this video too
is going to take you a ton of time so just take it step by step and take it very slowly because it is
going to take a lot of time and a lot of energy if there's other things you can remove from your life
like for me I was going to college at the time when I was doing this video 2 process I moved all
my classes from 5: to 10:00 p.m.
So that from 8:00 a.m. to 5:00 p.m. I could focus on this video too
and it took me 2 years to crack this nut so if you can beat me and do it in less than two years CS to
you and that's also because I did it alone right like I didn't have anybody else that was helping
me do all these kinds of things for that 2-year period but that was the whole point of creating
flip system was to help people save that two years of their life to do it way way faster and
way shorter the reason why is because you don't have to do all these cold calls you don't have to
travel you don't have to choose the right market flip system has already done that that's the whole
point of flip system is that we choose the market for you we show you where to invest we connect
you with local teams on the ground including the realtor and contractor and property manager that
we've worked with to help you expedite that 2-year process and 2-year period of your life and that's
saving you a ton of money on the flights and the travels and the cold calls and moving around work
and not traveling on the weekends not hanging out with your family it's saving you a ton of time
and a ton of energy that you can focus elsewhere and you can keep your day job and still invest
in real estate as a side hustle if that sounds interesting to you head over to flipsy.com to
book a call we can chat and see if we can help you with this proc which is a big beefy part
of the entire real estate investing process in video too so if you want our help head over to
flipsy.com we're going to be going over what your first investment should look like how to analyze
deals and the different methods and different ways you can exit those deals then we're going to go
over different criteria that I like to hit and the criteria that I've hit for my last 650 houses
and then the tools you need what tools do you need to actually go out there and find your first real
estate deal all right so the first part of this is how to find your first investment and it all comes
down to the strategy and we want to decide which strategy we want to implement for these deals so
which strategy is right for you so remember in video one we talked about all the different ways
to invest in real estate we talked about retail flips and burs and the flip system method which
is my recommendation if you don't know what the hell I'm talking about please go back to video one
and recap yourself but there's so many different strategies to invest in real estate but what
strategy is correct for you in my personal opinion if you have never invested in real estate
before I would follow the flip system method and just to recap the flip system method is where
you buy distressed property renovate it place a tenant and then you have multiple exit Strat
IES if you have never invested in real estate before this is going to be the easiest and best
way to invest because it's going to be the lowest amount of risk you can bur the house out you can
keep the loan and hold it you can sell it as a turnkey rental you can retail Fix and Flip It you
have so many different exit strategies with the flip system method the flip system method if you
don't remember is where you buy distress asset you renovate it you place a tenant then you have two
exit strategies number one you sell the property as a turny rental and number two you can always
bur the property which is where you buy rehab rent refinance and repeat and the Tenant stays in
the property paying your mortgage payments for the long run so if you haven't invested in real estate
before I would highly recommend the flip system method it's going to be the easiest and safest way
to invest with the most amount of exit strategies so the rest of this video I'm going to be going
over the different things that you need in order to implement the flip system method what do I look
for because it's the method that I Implement on a daily and monthly basis what do I look for in a
deal that would match that buy box of the flip system method where we buy the house rehab it rent
it out and then we have multiple exit strategies all right first we are going to get into the
physical criteria of the property so what criteria does the property need to fit in order to be a
good first deal so we want to hit first of all the 1% rent to Value rule rent to Value ratio is the
value of the property compared to the rent we want to be at a 1% or 1.0 rent to Value ratio which
means a $100,000 house has to rent up for 1,000 bucks a month a million house has to rent for
$10,000 per month you'll notice as you get into real estate there's hardly any cities where this
actually meets 1.0 you're going to be right around 8 but places like New York and LA and Seattle are
right around like.
2 and. 3 so it's just a quick rule of thumb to figure out if that property is
going to cash flow or not number two low property taxes I don't want to invest in places that have
high property taxes why it affects my cash flow so instead of making $400 a month I'm now making $100
a month because there's such high property taxes or they're always increasing that's not going to
be a good place for me to invest in the long run next low crime I want the proper to be physically
located in an area that doesn't have a high crime rate why more turnover more break-ins more
maintenance and repairs lower quality of tenants higher turnover with the tenants there's so many
reasons why I don't want to invest in a high crime neighborhood a lot of Real Estate Investors talk
about property class right the ab bcde e f or maybe they skip the E abcdf right I like to invest
in B and C-Class neighborhoods this is going to be the mixture between white collar and blue collar
it's not going to be the a class super luxury white colar and it's not going to be the f-class
which is going to be rough rough neighborhoods I want to be right in the middle so the workforce
housing is what we like to call it bedrooms and bathrooms I like to be at least a three-bedroom
one bath that's what I would recommend for you for your first deal once you start scaling up you can
get into 3 tws four ones uh two ones but I really like to be a three-bedroom one bath in the midwest
70% of the inventory is is three-bedroom one bath houses very very common square footage wise I
like to be anything from 7 50 ft all the way to like 13 or, 1400 ft that's kind of where I like
to be I don't want to be too small because it's going to really affect rent and resale value and
I don't want to be too big because the unit turns for example when a tenant leaves and it's like
a 2,000t house it's going to be very expensive to repaint clean the entire property right so I
like to be in that 1,750 ft to 1300 ft it's just going to be way more cost effective last but not
least I like to have an unfinished basement but I want it to be clean I don't want to be dirty with
cobwebs everywhere a nice clean base bit if you invest in a place that does have basements I want
to be a nice clean basement in the property so that's great Antoine thank you so much for all the
information but how can I go and find properties like this you can set up filters on Zillow and
get email alerts so you're just going to set your criteria three-bedroom one bath this square
footage these kinds of neighborhoods map them out plug in your email and it's going to email you on
a daily basis deals that match that criteria you quickly analyze them and make an offer cool moving
on financial criteria so what kind of financial criteria do I look for when investing and buying
these properties so there's two kinds of financial criteria that I look for number one arv Roi and
the rental income Roy so those are the two things I'm going to break those down for you and why are
these important because the deal has to be worth your time if we're only going to make a 5% return
of my money let's go put that in a high interest savings count right we have to make sure that
the deal makes sense for us and if we want to sell it as a turnkey investment that the buyer
on the back end is going to make a return or if we want to bur the property and hold it that the
return is going to make sense for us in the long run right so first let me explain what Roi means
if you don't know Roi means return on investment it measures how much money you can make from the
property compared to what you invested and Roi is a percentage the higher the percentage the more
money that you are making right a 50% return on your money means you invested $2 and you made $1
back all right now what is arv r y so arv stands for after repair value essentially you want to
calculate the return on your investment the ROI after renovating the house and increasing the arv
the ideal Roi or return on investment for these TurnKey Fix and Flip deals that you do is around
50 to 80% arv Roi so how do you calculate this first you want to take the profit the net profit
so if we're buying a house renovating it renting it out we're getting a loan on the property let's
say we're making a $10,000 profit at the end of the day on that Fix and Flip property because
it's an arv Roi we're going to have a $110,000 margin cool the amount of cash we need to buy that
property is $20,000 $20,000 investment $10,000 in profit you take $1,000 divided by $2,000 to get
your Roi which would be a 50% return on investment which is right in the range so that's the kind
of range you want to be in and you can just play around with those numbers all right next is the
rental income Roi this is how high of a return the rental income is making you compared to the
investment that you made so this is really really useful when you go to sell the property we want
to make sure that when we do sell the property the buyer on the back end is making enough cash flow
and making a good return on their investment why would we want that because if we buy a house
renovate it rent it out we want to go sell it to another investor if they're making a 4% cash
on cash return or 4% rental income Roi probably going to be hard to sell that but if it's making
a 14% it's going to be super easy and we can sell that house in a weekend right so that's why it's
important when before you buy these properties to calculate the rental in income Roi for the end
buyer so the ideal Roi that I've seen in the market today to sell a rental property to another
investor after you buy it rehab it rent it out and sell it is around 8 to 15% 8 to 15% rental income
Roi okay and this number is going to be based on your arv and the market rent so if you buy a house
for $80,000 bucks it's rented out for $800 but you're going to renovate that property and it's
going to be worth $150 K and it's going to rent out for $1,500 we're going to use 150k and 1,500
bucks okay so it's going to be all the future we're going to bundle the house together and sell
it to another investor what is their cash onh return or their rental income Roi going to be all
right so how do you calculate this first you're going to look at the cash flow per month okay so
we're going to go sell this property for 150k the buyer is going to come get a loan 80% loan to
value they're going to put some money down at the end of the day with their 7.5% interest rate
you'll have to make all these assumptions they're going to make $200 per month in net cash flow okay
to buy this property to keep the math easy let's say they have to come out of pocket with 24,000
bucks all you got to do is take $200 per month times 12 months which is $2,400 a year in net
cash flow divide that by how much they invested which is $224,000 to get the rental income Roi to
hit in that range of 8 to 15% okay so $2,400 per per year $2,400 per year in net cash flow $24,000
investment that would be a 10% rental income Roi which is right in the range and that means that
house will be relatively easy to sell if you do marketing correctly now you may be asking yourself
why do we make a 50% return on investment and our end buyers only making a 10% return on investment
well it's because you took the risk you took the risk to buy the house renovate it rent it out
sell it bundle it all together right the end buyer who's buying the product is just getting
a loan the house is clean safe livable property manager in place fully renovated tenants paying
rent on time so for you taking all that risk you can make five times the amount of return versus
buying TurnKey rentals which you make a fifth of the return 50% Roi versus a 10% Roi so people have
different strategies overall some people just want to buy the rentals and they just want to go to bed
at night other people like me and you like to be active and be more active in the deals we want to
go search for the deals get the financing renovate them be a part of the entire process now the
great thing about the flip system method is that you and I can do both of these strategies right
we can take the heavy risk and then once the deal is done we can refinance it and boom that deal
is in our portfolio or hey we got an amazing tenant in this place and the rent is way higher
than we expected or we overspent on Renovations we need to get our money back great let's sell
this property so by doing and implementing the flip system method as you go through the deal you
can really see all right I want to hold this one or I want to sell this property all right now
that we finished the criteria I'm going to go over the two ways to find your first invest inv
property number one is on your own and number two is with flip system so first we're going to
cover how to do it on your own then I will show you my software and my team to help speed up the
entire deal finding process all right so there's a million different ways to find deals and a
million different websites you can use to go and find your first real estate deal you can use
redin Zillow loopnet wholesalers Realtors bandit signs property managers Direct Mail marketing
cold calling Craigslist right there's so many different ways to go about it I would recommend
starting with Zillow and redin these are going to be deals that are on the market they are posted by
Realtors it's going to be everything above board I wouldn't go into the wholesalers bandit signs uh
cold calling all that kind of stuff for your first couple of deals just do something super clean
and super easy and look in the right Market where there are deals on the MLS I get so many comments
people saying well there's no deals on the MLS where I want to invest change where you want to
invest you can invest virtually you don't have to invest in your backyard let's say you go on Zillow
and redin and Trula all these different websites and you found some houses now we need to go over
analyzing those deals so I'm going to go to my computer and share my screen with you all about
how I analyze deals today and this software that I'm using you can use a link Down Below in the
description box to get access to this calculator completely free okay so I'm going to change to
my computer and show you guys how I currently analyze deals today so essentially how this flip
system Marketplace works works is that we have direct MLS access okay so as a deal is posted on
Zillow and Redfin and Trulia it comes right into the flip system Marketplace I can go ahead and add
this deal to my property uh que I can open it up in properties I can open up the address and now
the numbers are all there for me so I can see the after repair value I can see the purchase price
recommended I can look at the repair costs utility expenses sales costs what my profit will be the
taxes project duras I'm going to use a hard money loan so I'm going to fill in those two Fields
right so all of these deals that come in via the flip system Marketplace are already pre-analyzed
by our team of experts so deal comes in it doesn't go right to Zillow and redin it comes right to
our portal our team analyes it clicks publish you get access to a ton of deals that are already
pre-analyzed to really really speed up the process cuz obviously if you have to analyze a 100 deals
to make a couple offers it's going to take a ton of time especially if you have a full-time job so
what this is going to do for me remember we went over rental income Roi and then arv Roi so this
is going to show me the arv ROI you can see it's 70% so to buy this deal for example uh this one
right here which is for sale 37,500 in St Louis I'm going to get a hard money loan I'm going to
need $116,000 to do the deal I'll will make 11,000 bucks in profit a 70% return on investment arv
Roi in 4 months pretty cool now we're going to buy the house renovate it rent it out and then
sell it so this is the turnkey flip analysis to sell this house to another buyer they're going to
come in remember I said Market rent they're going to get a loan 75% interest and they are going to
make a 10% cap rate or a 15% cash on cash return remember the range was 8 to 15% so this deal
just from the looks of it is amazing this is something that I should go and buy make an offer
for 32,500 which is a little bit below asking I can go make this offer get it under contract and
then go through the entire process sell it to an end buyer and they'll make a 15% return on their
money so again if you want access to this tool to this analyzer click the link Down Below in the
description to get free access to it so there are some other tools out there obviously within the
flip system portal everything is inside of there but if you were to analyze these deals yourself
for example looking at the annual taxes for this house which is 1,459 typically you would have
to go to the city and county website depending on where you're investing pull pull those numbers
in and then put them into your spreadsheet that you may be using Excel or the flip system portal
to do that the second one that I want to point out is the market rent we use a tool called
rentometer rentometer is a great tool I love it I would highly recommend using rentometer to
come up with Market rent the great thing about the flip system portal is that it already has
rentometer numbers integrated inside of it so these Market rent figures are coming right from
rentometer already and that's all done for you so those are two tools that I would use one Ren meter
second second the county or city websites to come up with the actual property taxes don't use the
property taxes that are coming up on Zillow and redin and Trulia typically those are not going
to be accurate the other kind of tool that I use is going to be like a crime map however if
you have a great team on the ground that's going to be better than any crime map ever so there
are a ton of tools out there to look up crime maps all of them have relatively the same amount
of data what I like to do is build a great team on the ground realtor property manager contractor
Insurance title company and from there I ask them what they think about the neighborhood what they
think about the property that's going to be better than any crime app online and it's going to be
way more customized because if a property manager manages a 100 houses in a zip code and they have
great success collecting rent tenants never turn they always pay for rent increases that's way
better than any data from any crime map online cool so let's say we analyze a deal there's
three checkpoints after we analyze that deal to get that deal under contract number one is a
manual analysis that I just showed you in the flip system portal going through that manual analysis
analyzing the property does it make sense for us does it make sense for the end buyer does it check
all of those boxes after that we're going to take these numbers and send them to our realtor on the
ground and we want them to confirm the numbers that we have in our mind right I'm going to buy it
for this renovate it for this rent it out for this sell it for this do you agree with those numbers
and we're going to get the realtor's feedback once we collect the realtor's feedback we're going to
take it to another source property manager we're going to ask them what they think about the rent
the rehab the a same same questions that we just asked the realtor why would we do this because
now we have three checkpoints I ran the number realtor ran the number property manager ran the
number so now the numbers are going to be really really damn good the question is how fast can you
do these things and can you do this faster than the rest of the competition that's going to be the
key differentiator between you getting deals under contract or taking a little bit of time the great
thing about flip system if you use flip system use the marketplace use our property tracking system
is you get a couple different checkpoints as well so not only do you check it your realtor on the
ground checks it your property manager checks it by the way we introduce you to a local realtor
and property manager on the ground but we also have a full-time acquisition team that's analyzing
deals day in and day out and we have deal reviews so essentially if you change some numbers or you
get some feedback from realtor property manager we will actually do another deal review for your
deal to make sure all looks good next thing is we have a customer success team they will review your
rehab bids inspection reports and anything you get back from your realtor and property manager as
you're going through the process of being under contract so with flip system we have even more
steps to the process which is the acquisition team with the deal reviews and the customer success
team with the rehab bid and inspection report reviews we want to make sure you're getting into
a deal that is going to be profitable so you have a good experience investing in real estate in this
video we're going to talk about how to scale your real estate business we're going to talk about
using your team renting and selling the different exit strategies we're going to go over raising
money and creative Finance and then we're going to talk about how I was able to scale my Fix and
Flip business to over 50 deals in one single month so let's get into it we're going to talk about how
to scale your real estate business it all starts off with exit strategies and I think this is one
of the big pain points when people get into real estate is they don't have enough exit strategies
for their deals and then they have a big bottleneck of deals that they're trying to sell
or trying to exit and it's because they don't have enough exit strategies there was a couple things
I did to sell my pieces of real estate my single family houses duplexes apartment buildings that
help me scale way faster when you go to sell these houses most people sell these homes with a realtor
which creates another bottleneck that's not in their control but if you actually own a house you
can sell the house yourself and you do not need a realtor this is called a for sale by owner it's
completely legal if you own a property you can sell that property to another buyer give them
a contract do everything you don't need a real estate agent involved and you save 6% you don't
need a real estate license if you are selling a house that you own so that's a little hack in the
system is where you get to save 6% and add 6% to your margin on every single deal that you do what
does that mean it means on every single house that I offer on I can offer 6% higher than all of my
competition so how would you go about doing this there's a couple of steps that you need to take in
order to sell the house yourself and save that 6% number one you want to create a buyer list what I
recommend doing is going on my Gmail Yahoo for my whole family myself my brother my kids I go into
into all of our Gmail accounts email accounts I download all the emails I put all those emails
into a MailChimp or something like that then I email everybody that I know everybody that I've
ever talked to in my entire life and I say hey I bought this house I'm looking to sell it are you
interested in buying a rental property because I'm selling rental properties to them that already
have tenants in place that are already cash flowing the other thing I do is start leveraging
social media so start posting content you can even think about running ads for the houses that you're
trying to sell but you just have to get creative in the sales process because the quicker that we
can sell these assets the shorter our sales cycle the more cash that comes back to us which means
we can use that cash to keep scaling up scaling up scaling up the great thing about this is that
people already know like and trust you you're talking to people that know you or know a family
member of yours or know your brother or know your kids so you have some sort of relationship with
these people already it's going to make it way easier to sell your TurnKey rental properties to
them which again is my recommendation because if I want to go list the house on the market and pay
6% to a realtor to try to sell it to a family that I don't know they don't know me they don't trust
me versus renting out the house and now I have an asset that I can sell to anybody in America
instead of selling the asset to somebody that lives in a 5 mile radius with a realtor that I
don't know pay them 6% it just the whole business model of retail Fix and Flip doesn't make sense
to me I would prefer to buy the house renovate it rent it out and then sell it as a turnkey rental
to an investor anywhere in America and I get to save the 6% all right so that's bottleneck number
one is selling the property taking more control and ownership over selling the property the
shorter our sales cycle if we bring our sales cycle from 6 months to 3 months it's going to be a
way faster cash velocity which means we can scale way way we can actually scale double if we sell
the house in 3 months versus 6 months okay the second most important thing is renting out the
property a lot of people get into the weeds and get very very analytical and want to control a
lot of the process when it comes to renting out the property I don't want you to do this at all
I want you to leverage and Trust the property manager most importantly and the realtor when it
comes to renting out the property a lot of people want to dive into the weeds here and try to do
everything to get an extra $25 in rent or try to get the best tenant ever or they'll wait months
and months to try to find this unicorn tenant that does not exist what I recommend doing is running
comps or having the property manager give me a rental recommendation and then I want to list for
that price or maybe a little bit below that price if I do want to list that property for rent and
get a in there in the next couple of weeks I want to come a little bit below Market rent to just
get a ton of applications with those tons of applications I can then choose the top tenant for
me the other super important thing with all of my houses that I've ever done is getting professional
photos a lot of these places especially in the midwest where I have invested a lot of property
managers Realtors investors don't take these properties seriously they don't take professional
photos they want to cut Corners they don't want to spend $180 on a professional set of photos but let
me tell you these Prof professional photos will really help your property rent out way faster than
if you just took a bunch of photos on your iPhone or if you took it on a Android camera where
the photos look absolutely horrible so if you have professional photos on the property versus
photos that look like they were taken on a potato the photos from the iPhone are going to perform
way better and you're going to be able to rent the property out way faster so just to reiterate I
want you to stay out of the weeds a lot of people whether they're investing locally or investing out
of state just don't leverage their team they don't trust other people I recommend you trust everybody
100% until they screw you over or until something doesn't work and then you can change and you
can pivot from there but if you don't trust these people from the get-go you're going to end
up doing everything yourself and that's not a way to scale a business if you're fixing toilets and
you know looking up tenants background checks and checking credit scores and doing this thing and
that thing you just have 5,000 tasks now instead of trusting a professional that you have hired
another thing I would recommend is investing in software there's lots of tools and softwares
that can help automate your workflow so look at your day today say what am I doing I've done
this 17 times today or my property manager's done this 17 times or me and my realtor have had this
similar conversation 47 times cool what can I put together whether it's a software or a doc or an
sop like a standard operating procedure what is something that is very duplicative where I can
go and hire a virtual assistant or hire somebody locally or hire my brother or family member
to help me grow this real estate business and they can just do the same sop the same thing 15
times a day which will get me more leads or more tenants or be able to sell my houses faster all
right next we're going to get into how to do more deals so the first way that you can do more deals
like I had mentioned previously is recycling your cash and recycling your cash faster and faster
and faster than the rest of your competition how do you do that by taking more control and being
better than everybody else so like I mentioned a shorter deal cycle if we can have our deal
cycle be 3 months versus 6 months we get that cash back we can then use that cash to get into
the next deal that's that Lally 2x your output on the amount of deals that you can do in a single
year so if you're doing five deals per year and you want to do 10 deals per year just how can I
make my deal shorter how can I make my deal work faster and make the same if not more money all
right be better than everybody else what do I mean by that I mean looking at your competition
so if people are flipping houses in your local neighborhood are they a realtor themselves are
they the contractor themselves what part are they doing how are they finding these deals where are
they getting these deals from and see how you can be better than other people right for me it was
a lot of people were doing retail fix and flips or using other websites or using Realtors to sell
their houses and I was like if I can just control the sales aspect of selling these houses and
selling these assets I'm going to save 6% I can do it way faster than another realtor could which
is where it comes from be better if I can sell the house in 2 weeks and a realtor can sell the house
in 2 months and I save 6% that's a double whammy and it's going to be great for my business so you
want to look at what aspects you can actually be better better than somebody else that you would
hire in this business now once you do sell these assets or refinance these assets whether you sell
it or bur it I want you to get into the next deal ASAP so what I mean by that is when I have a house
which goes back to like being efficient with your time and being better than other people once
you have a buyer lined up or a refinance lined up and you know that that deal is going to sell
or refinance the next 30 or 45 days I want you to start looking for the next deal how can we be way
more efficient with our time if I know I'm going to sell a house in3 days right and there's like a
whatever 7030 chance that the house actually sells I want to start looking for new deals today right
and I already know how much money I'm probably going to get back on that deal I can start looking
for houses today in projection put those houses under contract get the rehab B inspection report
all that kind of stuff so that I have that house sell hopefully a week or two later I already have
a house lined up that is closing and I take the money from deal one and move it to deal two right
so you have to have multiple different things working all at the same time and really plan out
all of these deals that are happening when you're buying them when you're selling them to really
make your time way more efficient and that's how you can really double your output now the other
way that you're going to be able to scale your real estate business is by not using hard money
anymore and going and trying to raise private money or joint venture funds all right so once you
have completed a couple of deals the way that you can really scale your business is by taking
those couple of deals and making what I call case studies hey this is what I anticipated to buy
it for Rehab it for sell it for Prof profit this is what actually happened what I bought it for
rehabed it for sold it for this is what I actually made and looking at the difference between the two
hopefully you did better than what you projected you can take those case studies take it to friends
and family members people you know take that big email list that we already talked about and send
the deal to them hey this is what I've been up to are you looking to invest something me are you
looking to partner up with me do you want to flip houses together everybody wants to flip houses
especially if you are flipping houses in a place where they can invest 30 grand and partner up with
you and flip the house people love that another place that you can go to try to raise private
money is going to meetups so go to local meetups in La I would go to hundreds of these meetups
every single year and raise private money from these people I would go meet people at the Meetup
that were begging to invest in real estate and I would be like oh yeah I flip couple houses a month
in the Midwest and you know I'm always looking for people to partner up with that I think would be a
good fit I would then schedule one-on-one coffee meetings or phone meetings Zoom meetings with them
share them a couple case studies and then they were like please let me know about the next deal
next deal came around a couple weeks later I would send it to them and then we would use their funds
or partner up together and do some deals together just like that by going to these meetups building
relationships with people that I had never met before just by having these case studies so doing
a couple deals is going to be super important and there's really two ways to raise money from these
people it's either joint venture or private money so I'll explain the difference between the two
when you go and raise money from somebody and it's going to be a joint venture it's where they invest
in your deal and they get a a percentage of the profits so they fund for example 100% of the deal
and they get 50% of the profits which is typically what we would do or if somebody wanted to lend us
money they would lend us 100% of the funds for the deal and they would make a 12% annualized interest
rate so for example they would lend us $100,000 we would pay them 1% per month 12% annualized so they
make $100,000 investment and make $1,000 per month those are really the two main ways and really the
price ranges in which you should be raising money from other people now if that sounds like too
much work because it is a lot of work you can also build a relationship with your hard money
lender and continue using the same lender that you've already used for the first couple of deals
as you do more and more deals with these lenders the rates are going to go down the points are
going to go down it's going to get cheaper and cheaper and cheaper to raise money from hard
money lenders as you have more deals under your belt so it ends up being around the same cost to
raise from private money versus raising from hard money the great thing about raising money from
private money lenders is the speed of it right everything time is money and efficiency is money
if it takes a hard money lender 30 or 45 days to close where it takes a private money lender me
and Billy shaking hands and him wiring money in 24 hours 24 hours versus 30 to 45 days how many
more deals could I buy if I had money in 24 hours versus 30 to 45 days way more all right now I want
to get into how I went from flipping no houses to a couple years later flipping 50 houses in a
single month and how I really scaled up my real estate business so essentially big picture what I
like to sit down and look at is a couple of things and look at where my biggest bottleneck is right
so you have deals Capital sales time and team you have those five things and one of those things is
going to be your bottleneck at any given time and essentially in the house flipping business you're
playing whacka mole between those five every single day and it also es and flows you either
have way too much money and not enough deals way too much deals and not enough money you have way
too many buyers and not enough houses you have way too many houses and not enough buyers everything
is whack-a-mole and it's those five things that repeat over and over and over again and they cycle
in and out a lot of people when they get into the house flipping business say I can't wait till my
whole business is just streamlined and I get to just go on a yacht it doesn't get there I've tried
to get there it doesn't get there at all ever and I'll even go over how I try to solve some of these
bottlenecks but it's always going to be ebbing and flowing because we are in a market it's not like
I sell socks online right where I have like people pre-order a product produce it and I sell it we
are dealing with a market the problem with a real estate market is that we are not in control of
the supply I cannot go I technically could go build more houses but then I would have to find
the land and then I would have to go and buy the land on a marketplace right so the problem always
is that I cannot control oh 50 people listed their house this month and the next month 10 people
listed their house right I am not in control of the market or the supply of the real estate market
and makes it way more of a whack-a-mole game that you have to play in the house flipping business so
what I want you to do as you scale up and as you continuously scale up your real estate business
your house flipping business is I want you to find the number one bottleneck out of all of these
things out of these five things what is the number one bottleneck that is stopping me from doing
more deals so for example if I am going through my business and I'm like man I have I have enough
capital I have sales down I have enough time and bandwidth personally and my team internal external
also has bandwidth we just don't have enough deal to put through the pipeline what can we do to
find more deals and this was something that we dealt with over the last 10 years as well what
we did is we automated the MLS going into your software so how are you analyzing deals currently
are you going on Zillow and redin and Trulia cool who is doing that do you have a DL analyzer doing
that are you doing that personally right if you're doing that personally then you probably have a
time constraint as well it's not a deal constraint it's a time constraint on you going and finding
those deals right so how can we have software or tools or what can I buy can I buy a license
for Detroit MLS that then feeds into some software that I make or can I go and buy a software that
automatically analyzes deals like the flip system software does automatically analyzes deals for me
so I don't have to spend any time analyzing deals and deals are fed to me on a daily basis so that's
one of the constraints and one of the solutions that we had implemented another constraint that
we fixed was Capital constraints so typically people find a ton of deals especially if you as
you do more and more house flips you're going to find a ton of deals and deals are going
to start coming to you your team is going to probably have some bandwidth or maybe a little
bit of bandwidth constraints on the construction aspect and you probably have sales down let's
say the problem is going to be you have way too many deals and you don't have enough money
to do those deals and then your team may be a little bit constrained but you can always add new
people and new resources to help that constraint so what did we do for Capital we realized when
we went from hard money to private money raising private money it was taking a lot of time to build
the relationships with these private money and joint venture lenders so we got to thinking man
if we can just find a private money lender that had 50 million bucks I would have to talk to one
person and not talk to 500 or 50 people to raise $50 million right so that's exactly what we did we
started calling around family offices and saying hey we're house flippers we flipped hundreds
of houses here's all the houses that we flipped here's the average profit we're looking for a line
of credit and we went to all these family offices and pitched a line of credit and guess what we got
one we got a $25 million line of credit we would fill out a spreadsheet for this family office
put some information in about the deal they would wire us the money within 24 hours we were
Auto approved all the way up to $25 million and we would have you know anything from a million to
$10 million out pulled out of this line of credit at any given time essentially when we would sell
the asset we would give the money back to them we would get to keep the profits so so that is one
of the constraints that we had which was Capital how did we fix it went and raised a shitload of
money from one person what did that do it sold all my Capital constraints I never had to raise money
ever again from that one move and one decision the other thing it did was save me my time I was out
there building relationships networking calling with people that wanted to invest in real estate
just like I did from the very very beginning to go and raise money from private money investors
and private money lenders I now needed to spend zero time and I had no Capital constraints it was
a double wh two of the five things were completely done with just by building that one relationship
with the family office if this sounds like a lot of work you're absolutely right it would take me
typically 2 years to build a brand new team on the ground that includes flying there traveling cold
calling testing losing money with this team with this realtor with this property manager losing so
much money along the way and it took me so much time as well it took me 8 hours a day for 2 years
I was working on this full-time probably not even 8 hours probably 12 hours a day full-time for 2
years to actually build a great team on the ground and start my real estate investing business but
in the end it all worked out because I was able to build a multi-million dollar house flipping
business from California in the Midwest and I did it alone but you don't have to I made a system
to help you invest in real estate I will give you all the contacts to all the people that I know
on the ground so you can skip the cold calling the traveling the testing all that kind of stuff
I can connect you with a local team on the ground and that local team on the ground is going to be
in the same exact cities and states that I have been investing in for the last 10 years then on
top of that I will actually help you pinpoint the right deals that will be great purchases for you
to buy renovate rent and sell or refinance and my goal is to coach you every step of the way for
the next couple of years so that you can learn how to invest in real estate profitably and go
and do it on your own you can 100% invest in real estate alone but my recommendation is to
skip the trial and error and work with a team on the ground and people that have already been
there and done that right you get to skip all the battle scars and just go right to investing
in real estate it's always going to be faster and easier and you're going to lose way less
money if you work with a team that knows what they're doing so if that sounds interesting to you
click the link down below book a free consultation with my team and I we'd love to show you more
about flip system and how we can help see you