Helpful Videos to Determine Your Investing Strategy & Demo of Website
Determine Your Investing Strategy
Website Demo
Quick Info-Boxes by Trent Smith on the Many Methods of Profiting in Real Estate. Enjoy!
Fix & Flips on the MLS! (Quick Info!)
MLS Fix and Flips are actually what Happy Investing is all about! Here are some of the MANY reason the MLS makes for the Perfect location for flipping houses:
Supply & Choices! - There are more houses here than anywhere!
Clear Data! - You can see which sellers have been trying to sell for 200+ days. They are motivated!
Saves Time! - View many photos of the property, WITHOUT needing to drive 45 minutes across town to look
Both YOUR Realtor and THEIR Realtor are motivated to convince the Seller to accept a lower Offer. Your agent simply wants you to get a good deal, and their agent makes the most money by churning and selling houses. If their realtor sells a house for $280,000 to you or for $250,000 to you, the difference in their commissions is negligible. Especially if they haven't gotten many offers. Their agent will definitely present your $250,000 offer to their client and do their best to convince their seller to accept. It's sad, but unfortunately in real estate, a seller's own agent is motivated to work in your (they buyer's) favor.
The items above are what makes Happy Investing perfect for buying fix & flips and other investment deals. Happy finds the TOP 1% OF DEALS on the MLS and hand-delivers them to you. It runs all kinds of metrics on them.. Comparing appraisal values, determining ARV Values, Estimating Repairs, and More. These are things Realtor.com, Zillow, Trulia and others do not do, as they cater mostly towards owner-occupant buyers. Happy Investor even generates an anticipated Profit/Loss Report which includes estimated repairs and what your recommended offer price should be based on how many Days On Market the property has been listed, If the Property is Older, If the Price has been Reduced one or More Times, If the "Description" of the property mentions works such as "make offer" or other motivating keywords.
Flipping Without Cash:
Get Good Deals Under Contract Using Methods Above, THEN:
Take Your Purchase-Contract, Photos etc. to your Local Real Estate Club meeting and "Sell The Contract" to one of them for anywhere from $3,000 to $20,000+ so they can do the entire Fix & Flip. The flip-fee you charge varies based on how good the deal is and if you have multiple investors interested.
Or, find a buyer who is paying cash or using hard-money and schedule what's called a "Double-Closing." For example, if you are scheduled to purchase a property for $125,000 to April 4th, and you have already agreed to sell the property to another investor for $140,000, you can schedule for them to actually do the PURCHASE from you on the same day, April 4th. This method typically makes a little more profit than the "Assignment of Contract" method mentioned before this because the Investor buying from you is generally "blind" to your actual purchase price. Then, you can pad in a large spread. When "Selling the Contract" or "Assigning the Contract," your Investor-Friend can see everything clearly and will not want to pay $15,000 more than you paid (as in this example). They would rather pay you $8,000 or so for you to assign the contract to them.
Short-Term Rental Cash Flow (Info!)
Hey there! Trent Smith, owner of Happy Investing, here. I personally own 3 of these. They've really worked out great, actually. They are all 3 in the small town of Lubbock, TX which does not command high rent. Normally, they each would rent for about $1300/month with a normal tenant, but these 3 properties tend to gross about $30,000 in revenue per year each. If I were to rent the houses out to normal tenants, I'd expect to cash flow about $150 per month after all the normal house payment fees, which comes to about $2,000 per year profit each. There is not much of any annual appreciation in Lubbock, so that cannot be counted on. As short term rentals, however (Listed on HomeAway and AirBnB), they each profit about $11,000 per year after paying the cleaning lady, HomeAway/AirBnB Fees, Repairs, and the normal Tax, Insurance Etc House Expenses. Believe it or not, managing the houses seems to take less than 2 hours per month. I live in Austin, TX, 6 hours away, and the cleaning lady takes care of anything needed. So, when you run the numbers, the STR's (Short Term Rentals) profit about $33,000 per year (and have so for about 5-7 years now), while as regular rentals, they would net about $6,000/year profit. That's a pretty big difference, so I think I'll stay in the STR Market.
I own those 3 properties, but there is another method in this niche growing rapidly. That is, leasing a normal property (you being the tenant) on a 3 year term with it being written into the contract that you are able to lease it out on a nightly basis when you are not home. This language gives you the ability to treat the home as your own for at least 3 years and make cash flow on the property renting it out nightly. I've been to a couple short-term-rental conferences and spoke with investors doing this. They shared that the landlords were generally A-OK with this as long as you pay them the monthly rent, and the house stays in good shape. I can tell you after having mine for years, they stay in near-perfect shape Because they are only occupied about 1/3rd of the year, you generally have higher-end guests, and your guests never move in furniture and all their other personal belongings which normally clutter and damage rental properties.
I hope this helped!
Regular Rentals:
I can't stand these, so I'll skip. What's interesting is that a large majority of the Real Estate books in stores like Barnes and Noble focus on buying regular rental properties. Meanwhile, myself and most fellow investors I know in the business do almost everything BUT purchase and manage regular rentals.
Have you had a different experience and discovered some tricks for success with Regular Rentals? If so, we want to hear from you! We're always interested in learning new tips and methods.
One thing I actually DID NOTICE that will work, but I haven't gotten around to doing one just yet, is buying a NEWER house for sale in a CONSISTENTLY APPRECIATING Market and renting it out.
Let the rental income cover the mortgage and the annual appreciation will build your equity. I live in the perfect place for this, Austin, TX. There are many brand new homes in the suburbs
that are perfect. The reason for buying a home built within the past 3-7 years, for example, is that there are FEWER REPAIRS. I purchased 25 rentals back in the early 2000s, and it was
actually the Consistently MASSIVE Repair bills that were the larger problem. Miami appreciates, but it also hits bubbles. Towns in the north could be stalling due to people moving south
for better weather. Austin is perfect because it has been consistently growing and will for a long time. I have more knowledge than an outsider on this, being I live here. Are there other
good markets for this "New House to Appreciation" rental method? If so, Let me know what you think I know Austin is good.
Pre-Foreclosure Auction Bidding!
In 2018, I had a stretch of attending the Live Travis County, Texas foreclosure Auction each month for At Least 8-9 months in a row. I had my assistant with me. Over time, we learned that by simply buying ALMOST ANY property at the live auction and then simply listing it for sale on the MLS a couple weeks later, the profit is about 10% on average. Do that 4-6 times per year and you've got a nice little 40% annual return on your money (as compared to the 7% or so the stock market's been getting the past couple decades).
We actually realized that, even if the property if a "fixer-upper" in need of repairs, we always made the most money with the least amount of hassle by simply immediately listing it on the MLS "As-Is." Investors would always buy them from us off the MLS, even though they could have purchased the house at the foreclosure auction (on the same day we did) for much less.
So, it was a strange but profitable experience. No contractors involved. That makes it even easier. Now, because of Covid-19, the Live Monthly foreclosure auction is Paused, so this method has been having to wait until the setting is right for live auctions again.
More Info-Boxes to Come in 2020!
Possible Upcoming Topics
Buying from Wholesalers and Getting on Wholesalers Lists
Buying on Auction.com
Taking the (generally easy) Real Estate Agent Test so that you can make an extra 3% on each Purchase or Sale of your Flips.
Direct Mail - Get the List, Have a mailing company send the letters.
Tax Auction Sales - These generally happen at or near the same time as the Foreclosure Auctions
Trustee Attorney Sales - These often go "under-marketed" by the Trustee Attorney, opening the door for a great purchase.
