💸Entrepreneurs & Professionals looking to get started and work closer with Real Estate Skills' team, APPLY HERE: www.realestateskills.com/apply?el=mfhfapp 🏅Check Out Our ULTIMATE INVESTOR Program & Learn How To Start Wholesaling & House Flipping: realestateskills.com/ultimate-investor?el=mfhf 📚Check Out Our PRO WHOLESALER VIP Program To Get Started, Today!: realestateskills.com/pro-wholesaler?el=mfhf
You guys have THE BEST channel and resources for wholesaling real estate on UA-cam 😊😉👍 I very much appreciate the knowledge that you are sharing for new beginners. And as a new beginner, I feel that I need a vocabulary list of the definitions, abbreviations, acronyms, etc because a lot of these terms are like a foreign language. I know that a real estate license isn’t needed, but I feel it would be helpful in understanding some of the concepts. Also knowledge of the construction industry wouldn’t hurt either. Some computer and technical skills as well would be beneficial. For example: writing up contracts, navigating documents in docusign, pdf, spreadsheets, and such? Thank you so very much ❤
@lisasnapp9146 Thank you for suck a positive comment! 🙂 Thank you for the video idea and we will add it to the list. If you have specific questions about wholesaling you can always write them down and schedule a call to talk directly with our team. Here is a link to book your call: www.realestateskills.com/apply?el=21dapp We hope to hear from you soon! 🚀
AWESOME Content! Thanks for sharing this. One question: How were you able to offer over MAO. Can you explain your methodology behind that and still profit.
Hey @maranuk7271 - thanks for the comment, glad you enjoyed my first house flip! Sure, I’ll explain… First, you need to understand what the Maximum Allowable Offer (MAO) is. The MAO Formula is a “quick rule” to hastily come to an offer price that should be profitable as a fix & flip deal. In essence, most beginners use the MAO Formula Rule of ARV x 70% MINUS Repairs. It’s important to understand that the 70% of the ARV is supposed to create a discount that accounts for holding costs, fees of borrowing money, closing costs, realtor fees, utilities, etc., - essentially it’s supposed to create “space” in the deal to leave a hefty profit. Once you use, 70% x ARV, then subtract the repair costs to come up with your MAO amount. The issue with the MAO formula is that most people who want to get started fixing & flipping hear about it, and believe that this is the only way to do a profitable deal. Which is absolutely not the case. For example, in many cases 81% of the ARV can still be profitable, so can 75%, so can 79%, so can 83%, 85%, etc., “70%” is just a percentage that is commonly heard and used amongst beginners. So, the reason I was able to offer over the MAO Formula of: ARV x 70% MINUS Repairs, is simply because I actually know all of the true costs that go into a fix & flip deal. Because we do not use the MAO Formula, we are not grossly over-estimating the expenses in a fix & flip deal. An overestimation of expenses is typically what happens when using the MAO Formula. So, the reason we’re able to profit is because the deal was actually profitable at $390,000. Instead of using “estimations” or “rules of thumb” we use the actual REAL numbers to determine the expenses. Think of it as THEORY vs. REALITY (or FACT). The MAO Formula is great in THEORY, but I will be able to beat out anyone who uses it (and have been for 12+ years). The REALITY is that I know the actual costs that go into a deal, which allows me to offer much higher than those who use the 70% MAO Formula. The 70% MAO Formula is an amateur move. While professionals in this game actually know the REAL numbers. Make sense? Hope this helps and provides some context! Please shoot us a Subscribe when you get the chance if you enjoyed the video. We’ll be coming out with more! Happy Flipping!
Hey Alex thanks for the knowledge man if i may ask how did handle construction draw process, did you pay your GC percentage of the rehab costs upfront or you paid them on the they complete? Thanks alot Alex
Hey there! Glad you enjoyed the vid! So, here was the payment schedule: $1k to start the work, $9k at 25% completion, $10k at 50% completion, $10k at 75% completion, and $12k at 100% completion. For a total of $42,000 in repair costs. You want to be "ahead on work and behind on pay." Meaning, don't pay a lump sum of the entire repair budget to a contractor. This will help mitigate risk. A lot of contractors aren't good at managing money, so only pay them what is necessary once they've completed the agreed upon work. Pay them a series of payments over time! If you liked this video, then check out our video on How To Flip Houses Step by Step here: ua-cam.com/video/v4NSoTD3gLE/v-deo.htmlsi=mYa955ZNdc6hhOe9 In the video, I go into even more detail on how to fix & flip houses and Step 11: goes into effectively managing the renovation - which I think you'll enjoy! Cheers!
@EvoZennon Hey there! We will actually be giving our deal calculator away for the first time during our free workshop! Here is a link to sign up for our workshop: www.RealEstateSkills.com/workshop We look forward to seeing you there!
Hey Jason - Is this in the context that you want to fix & flip a house by yourself, but use the same llc that you're already wholesaling under with a friend? If that's the case, then there can be a lot of downsides. If your wholesaler friend is not a part of this fix & flip deal, then by flipping the house under that LLC can make him a part of it. If there isn't a clear written agreement between you two on how the fix & flip deal profits or losses are to be accounted for, then it can lead to a messy situation. He may feel entitled to certain profits because of the way the operating agreement for the LLC is set up. If I was taking on a flip myself I would want it to be in the the LLC that I have sole ownership of. You can always quickly create an LLC for ~$200, as well, so that you don't have to use an existing LLC you don't want to use! Hope this provides some direction. Feel free to provide more clarity. Hope you enjoyed the video! If you haven't yet, be sure to SUBSCRIBE! We'll be coming out with more great content all about wholesaling, fixing & flipping, and buying rental properties! :)
Absolutely, wholesaling is worth it and will continue to be. People are buying real estate every day so while interest rates may affect how many people buy at any given time, people never stop buying. As long as we find great deals, we can wholesale them. Most people don't know how to find great deals. For example, the deal in the video, we could've wholesaled it and easily made $10k-$20k in a wholesale fee because it was a great deal. Instead, I decided to fix & flip it in order to achieve a higher profit. If you want to see how we're wholesaling today, then check out our free training here on how to wholesale & flip houses (without having to spend $1 on marketing): realestateskills.com/training?el=mfhf Cheers & Happy Real Estate Investing! P.S. If you enjoy our content, then please hit SUBSCRIBE. We'll always be coming out with top notch real estate content!
Hi there! To find homes to flip: MLS & PropStream: Search for distressed or "As-Is" properties. Off-Market Leads: Use skip tracing or drive for dollars to find absentee owners. Networking: Connect with agents and wholesalers for early access to deals. Direct Marketing: Use bandit signs, Craigslist ads, and direct mail. Auctions: Check foreclosure auctions and bank-owned listings. For more tips, visit: Real Estate Skills Blog.
Yep! You make your money in real estate when you buy right! The goal is always to try and get the property you’re flipping as far below market value as possible. The further below market value the larger the profit margin and less risk. Cheers!
Hi there! Great question! In real estate investing, a contractor is a professional hired to handle renovations or repairs on a property. They can range from general contractors, who manage the entire project, to specialized tradespeople (like electricians or plumbers) for specific tasks. If you're flipping a property, the contractor is key to ensuring repairs are done quickly, on budget, and up to code. It's common to agree on a scope of work, timeline, and payment schedule before starting. Always vet your contractors thoroughly, check their licenses, and get multiple quotes to ensure you're getting a fair price. Need more info on finding the right contractor? Check out our guide here: [Link to a relevant Real Estate Skills article if available]. Hope this helps! Let me know if you have more questions!
Total Repair Costs were at $42,000. That was paid the the contractor. Cheers & Happy Flipping! P.S. Please shoot us a subscribe you found the video helpful. We'll be coming out with more content all about flipping real estate. Cheers!
![How To Find Cash Buyers For Wholesale Deals! [FREE & ONLINE]](http://i.ytimg.com/vi/YzWGQJPKv6c/mqdefault.jpg)
💸Entrepreneurs & Professionals looking to get started and work closer with Real Estate Skills' team, APPLY HERE:
www.realestateskills.com/apply?el=mfhfapp
🏅Check Out Our ULTIMATE INVESTOR Program & Learn How To Start Wholesaling & House Flipping:
realestateskills.com/ultimate-investor?el=mfhf
📚Check Out Our PRO WHOLESALER VIP Program To Get Started, Today!:
realestateskills.com/pro-wholesaler?el=mfhf
Awesome video! Very informative and to the point!
Hi Matthew!
Thank you so much! 🙌 We're glad you found it informative and to the point! Stay tuned for more tips and insights on real estate investing!
You guys have THE BEST channel and resources for wholesaling real estate on UA-cam 😊😉👍 I very much appreciate the knowledge that you are sharing for new beginners. And as a new beginner, I feel that I need a vocabulary list of the definitions, abbreviations, acronyms, etc because a lot of these terms are like a foreign language. I know that a real estate license isn’t needed, but I feel it would be helpful in understanding some of the concepts. Also knowledge of the construction industry wouldn’t hurt either. Some computer and technical skills as well would be beneficial. For example: writing up contracts, navigating documents in docusign, pdf, spreadsheets, and such? Thank you so very much ❤
@lisasnapp9146 Thank you for suck a positive comment! 🙂 Thank you for the video idea and we will add it to the list. If you have specific questions about wholesaling you can always write them down and schedule a call to talk directly with our team.
Here is a link to book your call: www.realestateskills.com/apply?el=21dapp
We hope to hear from you soon! 🚀
@@RealEstateSkillsalready booked😉
AWESOME Content! Thanks for sharing this. One question: How were you able to offer over MAO. Can you explain your methodology behind that and still profit.
Hey @maranuk7271 - thanks for the comment, glad you enjoyed my first house flip!
Sure, I’ll explain…
First, you need to understand what the Maximum Allowable Offer (MAO) is.
The MAO Formula is a “quick rule” to hastily come to an offer price that should be profitable as a fix & flip deal.
In essence, most beginners use the MAO Formula Rule of ARV x 70% MINUS Repairs.
It’s important to understand that the 70% of the ARV is supposed to create a discount that accounts for holding costs, fees of borrowing money, closing costs, realtor fees, utilities, etc., - essentially it’s supposed to create “space” in the deal to leave a hefty profit. Once you use, 70% x ARV, then subtract the repair costs to come up with your MAO amount. The issue with the MAO formula is that most people who want to get started fixing & flipping hear about it, and believe that this is the only way to do a profitable deal. Which is absolutely not the case.
For example, in many cases 81% of the ARV can still be profitable, so can 75%, so can 79%, so can 83%, 85%, etc., “70%” is just a percentage that is commonly heard and used amongst beginners.
So, the reason I was able to offer over the MAO Formula of: ARV x 70% MINUS Repairs, is simply because I actually know all of the true costs that go into a fix & flip deal. Because we do not use the MAO Formula, we are not grossly over-estimating the expenses in a fix & flip deal. An overestimation of expenses is typically what happens when using the MAO Formula. So, the reason we’re able to profit is because the deal was actually profitable at $390,000. Instead of using “estimations” or “rules of thumb” we use the actual REAL numbers to determine the expenses.
Think of it as THEORY vs. REALITY (or FACT). The MAO Formula is great in THEORY, but I will be able to beat out anyone who uses it (and have been for 12+ years).
The REALITY is that I know the actual costs that go into a deal, which allows me to offer much higher than those who use the 70% MAO Formula.
The 70% MAO Formula is an amateur move. While professionals in this game actually know the REAL numbers.
Make sense?
Hope this helps and provides some context!
Please shoot us a Subscribe when you get the chance if you enjoyed the video. We’ll be coming out with more!
Happy Flipping!
Hey Alex thanks for the knowledge man if i may ask how did handle construction draw process, did you pay your GC percentage of the rehab costs upfront or you paid them on the they complete? Thanks alot Alex
Hey there! Glad you enjoyed the vid!
So, here was the payment schedule: $1k to start the work, $9k at 25% completion, $10k at 50% completion, $10k at 75% completion, and $12k at 100% completion. For a total of $42,000 in repair costs.
You want to be "ahead on work and behind on pay." Meaning, don't pay a lump sum of the entire repair budget to a contractor.
This will help mitigate risk. A lot of contractors aren't good at managing money, so only pay them what is necessary once they've completed the agreed upon work. Pay them a series of payments over time!
If you liked this video, then check out our video on How To Flip Houses Step by Step here: ua-cam.com/video/v4NSoTD3gLE/v-deo.htmlsi=mYa955ZNdc6hhOe9
In the video, I go into even more detail on how to fix & flip houses and Step 11: goes into effectively managing the renovation - which I think you'll enjoy!
Cheers!
Thank you, Alex! Well, where can we find your deal calculator? 🙂
@EvoZennon Hey there! We will actually be giving our deal calculator away for the first time during our free workshop!
Here is a link to sign up for our workshop: www.RealEstateSkills.com/workshop
We look forward to seeing you there!
can there be any downsides to operating under the same llc with a friend wholesaler ?
Hey Jason - Is this in the context that you want to fix & flip a house by yourself, but use the same llc that you're already wholesaling under with a friend?
If that's the case, then there can be a lot of downsides. If your wholesaler friend is not a part of this fix & flip deal, then by flipping the house under that LLC can make him a part of it. If there isn't a clear written agreement between you two on how the fix & flip deal profits or losses are to be accounted for, then it can lead to a messy situation. He may feel entitled to certain profits because of the way the operating agreement for the LLC is set up.
If I was taking on a flip myself I would want it to be in the the LLC that I have sole ownership of. You can always quickly create an LLC for ~$200, as well, so that you don't have to use an existing LLC you don't want to use!
Hope this provides some direction. Feel free to provide more clarity.
Hope you enjoyed the video! If you haven't yet, be sure to SUBSCRIBE! We'll be coming out with more great content all about wholesaling, fixing & flipping, and buying rental properties! :)
Is whole selling worth it in 2024 and does the interest rates affect whole selling ?
Absolutely, wholesaling is worth it and will continue to be. People are buying real estate every day so while interest rates may affect how many people buy at any given time, people never stop buying.
As long as we find great deals, we can wholesale them. Most people don't know how to find great deals. For example, the deal in the video, we could've wholesaled it and easily made $10k-$20k in a wholesale fee because it was a great deal. Instead, I decided to fix & flip it in order to achieve a higher profit.
If you want to see how we're wholesaling today, then check out our free training here on how to wholesale & flip houses (without having to spend $1 on marketing): realestateskills.com/training?el=mfhf
Cheers & Happy Real Estate Investing!
P.S. If you enjoy our content, then please hit SUBSCRIBE. We'll always be coming out with top notch real estate content!
@@RealEstateSkills thanks 🙏
How do you find homes that need flipped to make sales
Hi there!
To find homes to flip:
MLS & PropStream: Search for distressed or "As-Is" properties.
Off-Market Leads: Use skip tracing or drive for dollars to find absentee owners.
Networking: Connect with agents and wholesalers for early access to deals.
Direct Marketing: Use bandit signs, Craigslist ads, and direct mail.
Auctions: Check foreclosure auctions and bank-owned listings.
For more tips, visit: Real Estate Skills Blog.
Hardest part is finding a capital partner that understands this. Majority don't unfortunately and only will entertain unicorn deals.
@PaisVeidUeyZT You do have to filter a bit, but quality cash buyers are out there!
Step one: get an on-market deal at a 22% discount off list price 😂😂😂😂😂😂😂😂😂
Yep! You make your money in real estate when you buy right! The goal is always to try and get the property you’re flipping as far below market value as possible. The further below market value the larger the profit margin and less risk.
Cheers!
How does the contractor work?
Hi there!
Great question! In real estate investing, a contractor is a professional hired to handle renovations or repairs on a property. They can range from general contractors, who manage the entire project, to specialized tradespeople (like electricians or plumbers) for specific tasks.
If you're flipping a property, the contractor is key to ensuring repairs are done quickly, on budget, and up to code. It's common to agree on a scope of work, timeline, and payment schedule before starting. Always vet your contractors thoroughly, check their licenses, and get multiple quotes to ensure you're getting a fair price.
Need more info on finding the right contractor? Check out our guide here: [Link to a relevant Real Estate Skills article if available].
Hope this helps! Let me know if you have more questions!
How much did you pay the contractor?
Total Repair Costs were at $42,000. That was paid the the contractor.
Cheers & Happy Flipping!
P.S. Please shoot us a subscribe you found the video helpful. We'll be coming out with more content all about flipping real estate. Cheers!