Posted on / by Brant Phillips / in Latest Post, Vlog

Flipping Case Study (A Quick Flip Story)

I recorded a Google Hangout with Chris S. to go over a Case Study of his 1st (successful) Flip Deal.

I recorded the replay so you can see how Chris was able to make around $20,000 in a little over 2 months.

We estimated that he & his wife Kristi made approx $1,500 per hour while ‘working’ on this Flip deal (lol)

Brant: Boom Shakalaka. All right. Man, let’s get straight into this. I apologize for the delays. Without further ado, Chris, thanks for hopping on on a Sunday. Why don’t you just tell everyone about your stuff, a quick, a brief bio on who you are, what you’re doing and that kind of stuff?

Chris: Yeah. My name is Chris. I bought my first rental in 2008. I did a lot of things wrong, made a lot of mistakes. I didn’t really get back into it until 2011/2012. Bought a few more rentals. Got comfortable with that. I got up to 13 units. Then when the market started changing here recently, we started listing those for sale and started doing some flips.

Brant: Sweet. The cool thing is, why I was excited about doing this case study is you came to the Breakthrough at the Beach event a couple of months ago and went through that training. Here you are now, going to make a little coin on this flip. Do you mind sharing a little bit, just a little bit what you got out of the Beach event?

Chris: Yeah. What prompted me to sign up for the Beach event was I was just coming off a big loss for me. I did my first flip. It didn’t really go as planned. I made some mistakes. I went and sought out some training. It was as life happens or as life would have it, your email for that event came through right about the time I was having trouble with that flip. Signed up, went. It more clearly defined the basics, some oversights, some things that I didn’t realize were that important became obvious after that weekend with you guys.

Brant: Right. I appreciate it man. Let’s hop into going over this deal you got here. I guess let’s start with how you found the deal. Start with the finding part.

Chris: Okay. We knew we were looking, or I should say my wife and I were ready to purchase. We reached out to a couple of wholesalers. One that we knew and that we had purchased rentals from in the past. Then we just found another one and scheduled a meeting, went and sat down with him, told him what we were looking, the areas we were interested in.

A few months later, the emails started rolling in and then a few months later, this one Springrock came through an email. It showed up on morning that we were actually on our way to the title company that day to close the sale of a different property. I went and closed that deal, the sale while my wife went to Springrock to check it out. There were like 10 other people there. It was occupied so they did the showing. Then everybody made an offer. I think they drew names, drew the offers out of a hat or something and we got the deal.

Brant: Sweet, man. To be honest, there’s all kinds of marketing strategies that investors can do in terms of mailing out postcards and yellow letters and doing pay-per-click over the internet and putting out bandit signs. All those types of marketing work.

This strategy and what you did is how I basically started in real estate, was just by really more so networking rather than just getting emailed a deal. The reason I’m assuming that you got emailed that deal was because you have put in some time and effort in networking with that company to at least get on their email list and you were staying active. This is one of the fundamentals of just developing relationships with people who find deals for investors. There’s tons of these guys in every community, essentially across the states of wholesalers. I understand in some of the smaller communities, there’s not as many. In big areas like the city of Houston that we live in, there’s dozens if not actually hundreds of companies and individuals like this to find deals. That’s sweet man. Tell me about, I believe you’ve done one flip deal before. It didn’t go so well. You may have actually took a little bit of a loss on that one.

Chris: I still own it. It’s a rental now.

Brant: That’s right. You converted that one to a rental because it wasn’t going to turn a profit?

Chris: That’s right. Yeah, we were in a situation where we had to rent it to get out of it essentially. That was our plan B exit so that’s what we did.

Brant: Yeah, that’s right. I apologize. I’ve been there done that, man. I’ve experienced the good and the bad. I remember the very first flip that I ever did that I lost money on. I remember that going into the next flip deal I was extremely scared. I was terrified from the experience of my first one that didn’t go so well. Tell me, if you had any fears or concerns going into this deal and if any of it was related to the other deal or just, what was your mindset going into this one?

Chris: We were extremely conservative with our approach on this one because of the fear. We had some concerns because the last one didn’t work out so well. It caused us to notice things that we wouldn’t have otherwise noticed. Both that experience and then the Beach event, we realized how important layout is, how important some of the small details are whereas before we were used to doing rentals where some of that stuff doesn’t matter. We had the wrong type of rehab for our price point on that deal. We made sure and paid real close attention to the comps. Our area, we were a little bit pickier about the deal. The main fear was just, we had to be okay with renting this if it didn’t turn out the way we wanted it to.

Brant: Right. Very cool. By the way, I don’t know if I mentioned, I’m sitting in a hotel room in Arizona. I’m shaggy and whatever. Chris and I are on a little business trip. I forgot to mention. That’s why I’m a little tank topping it out and looking a little scraggy. All right. You did what you need to do which is go over the numbers with a fine-tooth comb so to speak and make sure everything was good. You felt good about it. Tell me about the next thing which was the financing and how did you guys finance this property?

Chris: The wholesaler that sent us this deal required us to use their financing, which is fine. There was actually another offer over ours or higher than ours $5,000 higher than our offer. They weren’t committed to using the wholesaler’s financing so we got the deal instead of them. They put us in a landlord loan actually because their ARV was a little lower than the appraisal. It got sweeter as we went along.

We originally entered this deal with a plan to rent it. We were looking for a flip. We went to the showing for a flip. Then right about the time when we were running the numbers, debating on whether to buy it or not, we said, “Well, this isn’t really flip for us.” Again, that was that fear coming in that we talked about. We were so scared to do the flip. We said, “Well, we like the area. Let’s rent it. Then maybe we’ll put it, we’ll test the market when it’s time.” We closed the deal in a rental loan. It was like 8% with three and a half points. Then the appraisal happened and it came in $15,000 higher than the wholesaler’s ARV. At that point, we were like, “Man, what do we do? Do we want to flip it? Yeah, that scares the heck out of us right now.”

We put that decision off. I remember talking to you about it. We actually put it for a lease on, we put a sign in the yard, got a call within 30 minutes for lease. Then I talked to you the next morning and you were like, “Just let the market make that decision for you. Just change your listing on HAR and put it for sale and see what happens.” You told me a story about somebody coming in with a cash offer for you. Then the first day we had it listed for sale, we got a verbal cash offer. Then three or four days on market, we actually received the contract cash. It was like we listed it 5k over appraised value and we got all cash offer for appraised value.

Brant: Sweet, man.

Chris: We’re pretty happy.

Brant: That’s awesome man. A couple of things, you mentioned paying three and a half points. For those of you guys out there who aren’t certain about what that is, that’s essentially a 1% fee charged by the lender in order to originate the loan. If this was a total loan amount of maybe 190 or so, Chris? I can’t recall.

Chris: Yeah. We’re paying on 168 right now. Purchase price was 155. We did about 40k in rehab. Our contract for sale is 240.

Brant: All right, sweet. If the loan was say for example $100,000 and your lender is charging three points so you paid $3,000. Loan is $200,000 and you’re paying three points, you’re going to pay like $6,000. I’ve heard a lot of investors that always bark, not always but I’ve heard a lot of investors who bark at paying the points and say, “I’m not going to pay that. That’s too much money.” Or they don’t want to pay 12% or 14% interest. They’ll say, “Oh, that’s way too much money.”

I was just at a Mastermind in California for the last two days before coming here to Arizona. I was talking to another investor from another part of the country. He does a lot of his deals paying five points. That’s the lender that he’s using. It’s a different market than we’re in. I had that initial reaction. In my mind I’m like, “Oh my gosh. I wouldn’t pay that.”

Then I had to come back and remember what I’ve talked to you about and other investors and other students about. It’s like really the numbers have to make sense. What is the story that the numbers tell? If the numbers make sense, then you can proceed on the deal. That’s a cost to doing business. If that’s the financing option that you have and those numbers make sense, my rule is that you proceed with the deal. You can always look to improve your financing by finding other lenders, maybe small local banks or private lenders to get better financing. In the meantime, this is what you had and you went forward with it. Of course, you’re very excited and glad that you did because the deal is working out great.

We’ll go over some numbers, the final numbers. We’ll put them up on the screen to let people see in a little bit. What I want to do now is share a few pictures of what we have. Let me try the screen share again. Give me just one second. Oops, give me just a second. Chris, can you see my screen?

Chris: Now I see you over here. The presentation was up for just a minute.

Brant: Okay. Do you see pictures of Springrock now?

Chris: No.

Brant: How about now?

Chris: No.

Brant: No? Okay. Let me see. How about now?

Chris: It looks like you’re showing a blank, there we go. We got it. I see before pictures.

Brant: Let’s run through some before pictures of the property. This is it. It’s pretty standard home in the Houston market. I think it’s a three-bedroom, two baths?

Chris: Yup, me too.

Brant: You’ve got a garage. You just can’t see it very well right there. Can you still see the screen?

Chris: No. It’s back to you.

Brant: Let’s see what happened here. All right. They want to play that way, then we will I guess play that way. Can you see that by chance?

Chris: No, still on video.

Brant: All right. Now, I’m going to do … Hold on just a second. I apologize to everyone.

Chris: That first picture you showed me reminded me. It was tenant occupied. When they left, it was like they left a lot of stuff in the house. We didn’t expect that. That took a few days to clean it up.

Brant: That’s actually a good point to bring up is that sometimes, most of the things that I teach about or that most of the things that I know about real estate investing I’ve unfortunately learned the hard way. Anytime there is a property that has a lot of just junk and trash, for example, we bought a house recently that was a hoarder’s house. It was completely filled with stuff.

Chris: Oh wow.

Brant: You make sure that you negotiate or get that in writing to have all of that, the trash removed. You can put that in the contract. Say for example, if it’s going to take two or three loads of trash removal to get the demo done then you put in whatever $1,000 into the contract or price reduction or you can give them the option, “Hey, we won’t close and fund until you get all of your belongings out of the house because it really, it can be costly.” We paid almost, it was 4,000, $4,500 to remove all the trash out of a hoarder’s house recently. Trash removal is not too easy. All right. I’m going to try this screen share again. How about now?

Chris: Wait one sec. There we go. That’s the before photo.

Brant: All right. I’m going to try to flip through some pictures. How about now?

Chris: Yup, it’s working.

Brant: All right, sweet. We’ll just go through some pictures. One thing I want to point out is you’ll see some miscellaneous orange paint here and there. That’s something that we do on the renovations is we try … It’s easier to communicate when we do walkthroughs with guys just so there’s no misunderstandings and just there you go again, just marking things that are going to be trash or demo just to clarify so there’s no mistakes. There’ll always be mistakes on rehabs but to try to lessen the mistakes. Pretty standard stuff out here on the exterior. I just want to give them a little bit of an overview. That is not graffiti. I’m not sure what the Chris was doing with the paint markings there. Here, I think we ended up just refacing these cabinet doors and drawers.

Chris: Yeah. We kept most of the layout. We didn’t really move any walls on this one.

Brant: Yeah. The budget just wasn’t there. This was a proverbial paint, carpet, countertops and just general updating. Try not to get into a lot of the heavy lifting there. I see they left some champagne. We have two bottles.

Chris: That’s funny. I never saw that there.

Brant: There is wallpaper and old light fixtures and all that kind of stuff. I’m just going to give them a little bit of an overview. The peach ceilings are always good, like the headers and the beams. The fireplace, pretty standard home for the Houston area. One thing I know you notice this curly trim. That’s a pet peeve or it is a pet peeve. We’ve always, even if we’re not replacing the cabinets per se, because I believe these cabinets were in really good shape, we will either cut that off. We’ll have our carpenter cut it off or we’ll cover it up with some other type of trim. It’s hard to see the layout of this bathroom. You had a 45-angled wall here and shower. You can see it in the mirror. It’s just a small to medium size shower I guess you’d say in the back corner. This is our bread and butter flip. They are fairly “Simple” I guess that’s all the before pictures that I have. If you can still see my screen?

Chris: Yup.

Brant: No? Yup?

Chris: Yeah, it looks good.

Brant: All right. Here’s the afters. We used to use a lot of beige paints in our market. That’s going away in terms of popularity and people are moving more into the grays. I guess that’s what you guys decided on the paint color scheme. I guess after consulting with my Chris, I guess this is what you guys came up with. I think it looks a little bit darker in this picture than it actually is.

Chris: Yeah. It turned out real nice. Yeah, this was a recommendation from Chris, the color scheme based on the budget that we were working with. We like it. We’re happy with it. It turned out nice. We just had somebody else show it. Even though we’re on contract, it got shown yesterday I believe. The feedback that the agent left was all positive. They said they loved it. “Great house. If you have anything else like this, let us know.” Too bad we were just too late.

Brant: Sweet, man. That’s good feedback.

Chris: Yeah.

Brant: Originally, you see for example the walls and the ceilings are one color. We have some investors who, for personally, generally, we’ll get in a conversation. It generally turns out to be a personal reason. I don’t like, I want the ceilings white. I don’t want the ceilings to be the same color as the walls. We’ll discuss that. There’s a couple of different schools of thought. One, you do have some vaulted ceilings here. In my opinion, it’s totally fine and acceptable to just do the walls and ceilings one color if the color is light enough.

Some people prefer white ceilings. I get that but it’s usually for personal reasons. The reason that we like to do the ceilings one color is really one, is we know that it sells. We base that off of one, our own projects and our customers’ projects. Also two, that’s what you see in a lot of the new construction homes. That’s one of our strategies is just to mimic new construction because they’re doing tons of research on marketing and designs and hiring designers and things like that. They’ve found it adequate to sell new homes. That same rule or design rule should also work with flips. That’s what we usually do.

Now, sometimes there are some houses that have only eight foot ceilings throughout the home with no vaulted ceilings. If the customer is wanting a darker wall color, then I do agree with that. We’ll go ahead and go white ceilings. It’s a little more costly in terms of labor and what not for painting. That’s the thought process into that.

Another thing that I like to point out is we try not to ever get emotionally attached to any of the decisions with an investment property. We don’t want to get attached to any home that we particularly like or emotionally attached to certainly any of the design decisions. We just try to make everything a business decision. You know what is going to have the biggest return on our time and our investment with this property? Just try to let, doing what works. What is the market dictating? Just try to follow a suit. There’s no more close-up of the chimney and the little built-in.

Just so everyone watching knows that the floors, the hardwood floors are actually laminate. Those are laminate floors. That’s another thing that comes up, is that people ask when do you use laminate or when do you not use laminate? For the Texas market, it’s different in other areas, but for our market, we use a laminate product that the material is around $2 a square foot I believe. Maybe a little bit more with the padding and underlayment and everything, not including any of the materials or stuff like that. A little shoe mold trim around the edges.

The material itself is not a cheap laminate. I see stuff for 99 cents and all that. We don’t use cheap-cheap laminate. We use somewhere in like a mid-grade laminate. We definitely don’t use the high-end type, Pergo, 5 or $6 a square foot type of laminate. Then we use this mid-grade product.

A couple of things. One, it shows really well. We’ve had success with it in our projects. We found that there is a limit to the market that you can put it into. In our area, we’ll use it for the entry price point which is around 100 and $125,000 in our market definitely to the medium price point which is around 180 to 200,000. We’ve used it up to 300,000. We have not used this in a home above 300,000. We’ll go all out and go with the hardwoods above 300,000 but this price point it worked fine. Were you guys happy with the flooring Chris? The laminate?

Chris: Yeah. Everything turned out great. We liked it. Everybody that’s seen it like I said, the agents and their clients have all had positive feedback.

Brant: Great, man. We usually do little things. Like in the master bedroom, we’ll provide an upgraded ceiling fan. We’ll just spend a few more bucks on the fan on the master than the bedrooms. The shower, you saw the shower. The little trick that we do is so these border tiles, this design piece is usually in a 12 by 12 similar to this. We’ll cut it either in half and make it a 6 inch border so we can double the material. Or a lot of times, it looks like this is a 6 inch. Sometimes we’ll make it like a 4 inch strip so we can actually get 3 feet out of one piece. It looks just as nice doing the thinner border piece.

Here are some pictures of the backyard. This is the front, not too, to be honest, incredibly fancy on the landscaping or anything. We try not to spend a lot of money on landscaping. We just go clean and green and try to make it just nice, clean and functional. Remove any eyesores.

There is a picture of the backsplash, picture of the granite countertops. The granite countertops are something that to me is a must. It’s something that we do every single time. It’s not really an option. Some people ask if it’s okay to do like a Formica type of laminated style countertops. For us, it’s not. We’ve even done the granite in some of our rentals here lately. Those are the wrong light bulbs in there. It should be the floodlight style bulbs that are flush, justify. I guess the buyers didn’t care so much.

Chris: No. It didn’t seem to bother them. We had positive, that backsplash I think is what really sells that kitchen.

Brant: Yeah.

Chris: I think we glued it with a mid-grade granite. Then, I don’t know. Wherever you guys put that backsplash it seems to work. That’s my theory.

Brant: Yeah. Then so we use colors we know that work and schemes that work. This tile for example is a tile that we’ve been using for years. It’s a Home Depot tile. It’s called Sonora Taupe. One thing notice here is we did have to expand the opening for the oven. A lot of the older homes have a 24 inch oven and microwave space. They still manufacture and sell 24 inch ovens and microwaves, but they’re very expensive because they’re not mass producing them.

We did have to modify this cabinet to fit a 27 inch oven. That’s just a heads up for some of you guys out there. To make sure you take those measurements whenever you’re planning out your scope for your rehab because these appliances, the 27 inches generally is actually cheaper than 24 inch. That’s a good thing. You just want to make sure that you have space because I’ve seen some 24 inch ovens and they can’t expand anymore. You will spend maybe even 3, 4, $500 more for a 24 inch than you would for a 27 inch. Even if you don’t, you may have to spend some money on rearranging or modifying some cabinets to make sure that those appliances fit. Also put a little granite on the window seal. Just a nice little touch.

These are the same cabinets. For you guys watching, we refaced the doors to just update the look and feel of the home. Chris, was that crown molding new in the kitchen?

Chris: Okay. The crown molding was already existing here. A lot of times we’ll add the crown molding in the kitchen cabinets if it’s not existing already.

Brant: I think this is a better representation of what the gray look like, not too dark not too light. Another view there. That’s it on the pictures. Any thoughts on the rehab Chris on your experience? I know that you worked with us. It was a turn-key deal.

Chris: Yeah. When we work with you guys it’s more hands-off for me than with other experiences I’ve had. That’s a plus because both my wife and I work full-time. What you said earlier about the whole emotional attachment to some of the decisions, this was the first, that’s one of the mistakes I made with the other flip. You mentioned that at the Beach event and it really hit home with me. You said something about, “Just run the numbers. If the numbers say do the deal, you need to do the deal. That’s how you know if you’re a real investor or not.” We ran the numbers. They worked. They got better as we progressed through the deals. We altered our plan.

Some of the things in there like the beams in the living room, if the budget had allowed, we would have maybe, I personally would have wanted to see those painted a different color or the chair rail in the kitchen. We may have done some different stuff and painted that white. Like you said, we didn’t let the emotional attachment to the deal step in and make those decisions for us. It was like consulting with you and Chris and looking at the budget and saying, “Well, here’s what we can do with these numbers.” That’s what we did and it worked.

Brant: Another thing is the type of market that we’re in because it is a seller’s market. We don’t do everything that we do in a buyer’s market because there’s not as much competition. There’s not as much inventory out there. Literally, in the market that we’re in, houses that are being rehabbed nice, when those are going on the market, they’re generally flying off the market. If you’re doing the due diligence beforehand making sure that you’re buying it at an acceptable price, have an acceptable budget, and it’s in a market where people are looking for homes and mud. We’re fortunate right now and most of our market is as, “There’s a lot of hot markets out there.” This was one. You put it out there on the thing, it flew off the market.

Tell me real quick, this is something actually it’s happening a lot right now. It’s a little bit difficult to say for sure exactly what a value of a home is to project out say two, three, four, five months in a really hot market like this. We’ve literally this year have bought homes that we’ve anticipated selling them at a certain price point and sold them for up to 40 or 50,000 more than when we bought them just a few months before. That was a situation here. When you bought it, you were looking at selling it for?

Chris: 225.

Brant: Selling it at about 225. I think you were maybe thinking like this is probably a long-term hold or rental just for cash flow but things changed. Did you all run comps on that or did you get your pricing from the appraisal?

Chris: Both. We ran the comps on it as well. We said, “We’ll go 245 on the list and see what happens.” It was also listed for lease. We had a couple of calls, sort of slow played those. Then the offer came.

Brant: Okay sweet, man. How many days was it on the market as for sale until you got the cash offer?

Chris: The variable came the first day. The agent called and said, “Hey, I’m going to have a cash offer for you.”

Brant: Sweet.

Chris: That was promising. We knew like, “Okay, we’re not going to do anything until Monday after that weekend.” Then it was about three days, maybe four where we actually had the contract. That was nice.

Brant: Right. That’s awesome man. Yeah, I remember we were talking about that. It’s like you were thinking about renting it but you weren’t sure. Sometimes we have some investments like I’m for sure I’m going to rent this property or I’m for sure going to flip this property. Then sometimes you’re like, “I could go either way.” One of my things is some people will say, “You’ll pay more money with flip properties.” I’m like, “That’s true.” They say, “You’ll make more money with the rental over the long-term.” I said, “Generally yeah, I believe that too. That’s true.”

I have a pet peeve with my rentals. I don’t like vacant properties. I’ve got a certain amount of properties that I’m like, “Hey, these are incredible cash flow properties. They’re part of my long-term wealth building strategies. I’m going to keep these homes, own these homes free and clear for 10, 20, 30 years and may never sell these homes.”

Then I’ve got some homes, a lot of our flip, it’s like we go in straight to it as like, “We’re going to flip this home.” Then I’ve got some rentals where I’m like, “I’m going to rent this because it’s a rental property. If the tenant wants to extend the lease and stay another year or two, it looks like I’m going to do that. On occasion, we’ll have a vacancy come up. I don’t like vacant houses. That is a pet peeve of mine. We’ll throw out a for sale or for lease sign, start to get in offers or applications. We’ll go with what we feel best about at that time. If we get a great tenant and we like how that looks, we may go that route. If we get a great offer, we may go that route.

My suggestion was put out for sale or for lease, see what comes in. If you get something solid, run your numbers, play with your numbers. If you like it, great. If not, wait for something else. You just happen to get $240,000 cash offer the first day. That worked out pretty damn well.

Chris: Yeah. Yeah, that was nice.

Brant: Let me see here. I’m going to try the screen sharing thing one last time. Here we go. I believe these are some numbers, general numbers was purchase price 155.

Chris: Yup.

Brant: Sales price was 240,000 and repairs, I think this is the anticipated but it probably ended up around 40 or so.

Chris: Yeah. I’m guessing that was the initial bid. Then like I said, right when we got into it, it was, “Oh, there’s two loads of trash that we didn’t account for.” Yeah, we’re figuring 40.

Brant: All right. Come out around 40. When did you buy this property again?

Chris: We closed on it July 30th.

Brant: Essentially August.

Chris: The contract was September 30th. It was like two months exactly.

Brant: You went under contract in September but you closed in July?

Chris: Yeah. We purchased in July.

Brant: The end of July?

Chris: The very end of July we purchased.

Brant: Wow, man. If you closed … Essentially August 1st. All the month of August, all of the month of September. Today is October 5th.

Chris: Yup.

Brant: When are you closing on it?

Chris: We negotiated the close date. That cash offer came in with a close date of late October. We pushed that up a couple of weeks to the 17th of October. Mid-October, we’re set to close.

Brant: That’s awesome man. This is a screen capture of the flip analyzer. Down here on the gross profit. These are highlighted just because that’s standard on our form because these are the typical months four, five and six. These are the general months that you’ll actually realize your profits.

Chris: I can’t see the flip analyzer right now.

Brant: You can’t see that screen?

Chris: I’m seeing the Springrock, purchase price, sale price, repairs.

Brant: You don’t see the next slide?

Chris: No.

Brant: It’s part of that presentation. That’s weird man.

Chris: There it is. There it is.

Brant: You see it now? All right. I’m just going to leave it with that view. All right. You can see this here right?

Chris: Yeah. Yeah, it’s a little small. It’s there.

Brant: What if I do this? Do you see it now?

Chris: Nothing changed yet but maybe it’s lagging behind. I’m not sure.

Brant: Yeah. All right. Down at the flip gross profit, there’s three fields, the four, five, and six months fields are highlighted. They’re highlighted only because this is our standard form and those are the months that 80% of flips you actually realize your profits which after you buy it, fix it up, put it on the market. Of course there are some variances. We have projects that go for a year-long because they’re major massive additions in development type stuff. Then there are some that come really quick. You look to be sitting in the two-month area, around the $23,000, somewhere between two and three months. You’re around $23,000 profit.

Going back to the top, just the numbers were as at $240,000 ARV which is what ended up being the sales price. The purchase price was 155. I guess you may be a little bit under because I plugged in that 38,650 number for your repairs. If you come out at 40,000 repairs …

Chris: Yeah.

Brant: Let’s see here. That was your loan amount $193,000. It was 8% interest so that’s about your monthly payment. Is that correct?

Chris: I can’t really see it. Yeah, we’re paying up 1,400 a month principal. They offer the interest on the loan.

Brant: This has 1,289 with insurance 50 bucks a month, tax is 200. Miscellaneous for utilities and maintenance, I got your closing cost at 1,900 because I know that you had to pay some additional lender fees and processing fees with the hard money company.

Chris: Yeah.

Brant: There is your points that you paid. Your closing costs, they’re roughly 1% to sale. Now realtor’s commission, I put only 3% for your buyer’s agent because I know your wife is an agent and she listed the property. That’s why I put that as 3%. Yes, you are saving some money to your advantage because of that. Some investors will ask whether or not they should do a flat fee listing or pay an agent the full 3% which in this case would then cost you guys 6%, it’d have been $7,000 of course less profit. My thing on that is it depends on the price point and it depends on the market.

Now, we’re in a seller’s market, not a lot of inventory, not nearly as much competition as years of the past. I believe that in a lot of markets, go ahead and use a flat fee listing which can be anywhere from 100 to 3, $400,000. Let the market sell the property. Let your photography sell the property. I’m a big proponent of using professional photography and pictures when you do a listing though. That’s my only thing is whenever you either hire an agent or you do a flat fee listing, make sure that you use professional photography because it can make a huge, huge difference in the listing online. Yeah man, it looks like you’re going to come out with I guess somewhere right above a $20,000 profit in about two and a half months so [inaudible 00:44:11] man. It’s a good job.

Chris: Yeah. It worked out much better this time than the first time around where we didn’t use you guys. We made some mistakes on that. Yeah, we didn’t use InvestHomePro for the rehab on that one.

Speaker 3: Huge mistake. Huge mistake bro.

Chris: I had to learn that one the hard way.

Speaker 3: [inaudible 00:44:35].

Brant: The positive focus is some of our best clients and investors who are clients who work with us for a while and then they go use someone else for the rehab stuff. Then they get the contractor blues and they get, that kind of stuff will happen. They come back, best customers ever.

Speaker 3: Yeah.

Brant: Man, we enjoyed working with you. I really appreciate you. To be honest Christ, we need to be honest here man. You and I don’t think put very much time on to this deal at all. How much time did you actually put into this house and have you even seen the house I guess?

Chris: It’s been a couple of weeks since I’ve been over there just looking at the 17th on the calendar. I went over there right before we closed it. I didn’t see it when we bought it. My wife walked in and said, “Yeah, let’s buy it.” Then I’ve been over there twice since.

Speaker 3: Then you went to Italy?

Brant: Then you went on a month trip to Italy and France.

Chris: Chris had things handled though. We’ll just say that.

Brant: Yeah. If you had to add up your total hours spent working on this flip deal, how many hours do you think that you, computer time, analyzing, looking at comps? You can even add this webinar time.

Chris: Four hours, nothing. It’s negligible. It’s pretty thin. Compared to some of the other deals I’ve done, it’s ridiculous. Less than five. There’s no way I spent five hours.

Brant: All right. What do you think Christie’s time is? She had a lot more involvement with it or slightly more?

Chris: Whatever time you want to say it takes to run comps, probably three times to make the initial decision mid-project and then to list it, however long it takes to list a deal, I don’t know on HAR for the agents out there. They’ll be able to answer that better than I would, but yeah a few hours.

Brant: 20-30 minutes?

Chris: Yeah.

Brant: Would you say maybe she put 10 hours total?

Chris: Yeah. I think that would be really high.

Brant: All right. She put in 10. You put in 15 making around $22,000.

Chris: I see where this is going.

Brant: Let’s see what this comes out as. Somewhere around $1,500 an hour. I don’t know how much you make at your job currently but it definitely makes you wonder like, “Why do I still work at my job?” Man, awesome job. Fist bump, boom. I appreciate you just freaking kicking ass and doing the work man and getting out there and making it happen. Running the numbers, pulling the trigger man because so many people, the numbers will make sense but they won’t pull the trigger. They’ll get the fear thing, the mental stuff. You did it man. I appreciate it. I’m excited for you guys. Glad you took action and even more so because you’re part of the breakthrough event.

For any of you guys who are interested in coming down to the Beach, Chris was a part of it as well as the eight men that are here. It’s just a time to, we get down to the beach and we get real honest and real and raw kind of where we’re at in life and where we want to go and how we can combine just some general life principles to get you guys fired up in your life with creating power in your faith, in your family relationships with your wife and children. Getting your body in shape through some just basic nutritional and exercise changes that you can implement. Doing all those things in order to create power in your real estate investing business. We dive into the real estate stuff and teach you guys everything you need to know, all the seven fundamentals of how to flip a house, how to rent a house. That’s what the Beach event is about.

If you’re interested in kicking ass and taking names like Chris has done, check it out. If not, no worries. This is not a sales pitch. I just want to bring that up because it’s what I believe in. I love the Beach event and I love my beach brothers who do the work, go out and kick ass, take names, make a lot of money, improve their life and just do it man. I promised everyone that we’d be done before the kickoff time. We got seven minutes. Who are you going for? Texans or Cowboys?

Chris: Texans all the way.

Brant: Man, I grew up. I was born and raised in Dallas. Huge Cowboy fan. Then we moved to Houston my senior year in high school. I’ve lived in Houston now much longer than Dallas. I am one of the few people, I can actually be a Cowboys fan and a Texans fan. I’m a Texans fan though man. Each year goes by and I’m like, “I’m a Texan man.” I claim Houston now. I’m going Texans man. That’s what’s up.

Chris: All right. All right.

Brant: All right man. Thanks for hopping on and sharing with everybody your success.

Chris: Thanks for the shirt.

Brant: Man, you’re an InvestHomePro man. You are a full out member now man. All right buddy. Have a good rest of your day. Thanks for hopping on.

Chris: Awesome. Thanks Brant. I appreciate it.

Brant: Talk to you later.

Chris: See you.

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