\n<\/p>\n
House flipping<\/strong><\/a> profits are off the charts<\/strong>, so why are so many house flippers leaving the market<\/strong>? Top flippers like James Dainard have seen their profits almost double, EVEN with today\u2019s high <\/strong>interest rates<\/strong><\/a>. Wouldn\u2019t now be the perfect time to take on more flips than ever? The experts say \u201cno.\u201d In fact, many of them have stepped away from flipping entirely<\/strong>, worried that the risk FAR outweighs the reward.<\/p>\n To give us a more rounded view of this real estate market<\/a> are Jessie Rodriguez <\/strong>and \u201cI hate real estate but love money\u201d investor Tarl Yarber<\/strong>. Jessie and Tarl have done HUNDREDS of flips <\/strong>throughout the past decade, but now, they\u2019re doing fewer flips than ever before. With high holding costs<\/strong>, an uncertain economic future<\/strong>, and a greater risk of failure, now might not be the best time to start your flipping empire.<\/p>\n But if you have experience, money, or time, you could make some serious returns<\/strong> if you are willing to take the risk. James, Jessie, and Tarl talk about what they\u2019re looking for in today\u2019s market<\/strong>, how to instantly lower your cost of labor <\/strong>on any flip, why so many expert flippers are leaving the business<\/strong>, and why you should \u201cdollar-cost average\u201d in real estate investing<\/a>.<\/p>\n Dave: James: Dave: James: Dave: James: Dave: James: Dave: Jessie: Dave: Tarl: Jessie: Tarl: Dave: Tarl: Dave: Tarl: Dave: James: Tarl: Dave: Jessie: Tarl: Jessie: Tarl: James: Dave: James: Jessie: James: Tarl: Jessie: James: Jessie: Tarl: Dave: Tarl: Dave: Tarl: Dave: Tarl: Dave: Tarl: James: Jessie: Dave: Jessie: Dave: Jessie: Tarl: Dave: Tarl: Jessie: Tarl: Jessie: Tarl: Dave: Tarl: James: Tarl: James: Tarl: Dave: Tarl: Dave: Tarl: Dave: Tarl: Jessie: Tarl: Jessie: Dave: Tarl: Jessie: Dave: Jessie: Dave: Tarl: Dave: James: Tarl: Dave: Jessie: Dave: Tarl: Dave: James: Dave: Tarl: Jessie: Dave: \u00a0<\/p>\n<\/div>\n Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em>[email\u00a0protected]<\/span><\/em><\/a>.<\/em><\/p>\n Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n
Hey, everyone. Welcome to On the Market. I\u2019m your host, Dave Meyer, joined today by James. James. How are you?<\/p>\n
I\u2019m good. I\u2019m excited to talk about, we get to hang out some deal junkies today. My kind of show.<\/p>\n
Yeah, this is your favorite kind of show. We are going to be doing a flippers\u2019 panel today. So we\u2019ve brought in three, well, two flippers on top of James, who\u2019s obviously an expert flipper. We have Tarl Yarber, who has been around the BP sphere for a long time. So if you watch BiggerPockets YouTube, he\u2019s been on a lot of our podcasts before. So if you know Tarl, excellent, very experienced flipper. And we also have Jessie Rodriguez joining us, host of HGTV\u2019s Vintage Flip. He operates mostly out of Southern California.
James, given everything that\u2019s going on, it\u2019s an interesting time for flippers. What are you looking forward to talking to these guys about?<\/p>\n
I\u2019m looking forward to just adjustments, right? With every market cycle you got to change all your businesses, but especially your flipping, like how you\u2019re doing it, who you\u2019re hiring, and how you\u2019re [inaudible 00:01:12]. And how people are making money, because people are a little spooked right now, but it\u2019s a good business to be in.<\/p>\n
Yeah. Yeah. And today I expect that we are going to hear the good, bad and ugly. There\u2019s obviously some good stuff in here, but we both know Tarl, He likes to keep it real and explain all the sort of behind the scenes things that are going on, and it\u2019s not all glitz and glam and some of the challenges of the business. So I think anyone who has has a preliminary interest in flipping is definitely going to want to listen to this show, because I think between the three of you there\u2019s something like 1500 deals flipped, something crazy like that. How many of you flipped?<\/p>\n
We have done about five to 600. We\u2019ve been involved in over 3,500 transactions with flips with our clients, blended money and ourselves. So it\u2019s over a billion dollars in flips we\u2019ve done.<\/p>\n
What?<\/p>\n
Yeah, or transactions with flips. So we hit that threshold last year.<\/p>\n
Wow. Oh my God, that\u2019s insane. All right, well, I\u2019m sorry to have said 1500. Yeah, a little tired. Just a couple deals. Wow, 3,500, that is wild.
Well, today in this episode we are going to hear a little bit about a concept called dollar cost averaging. If you\u2019ve never heard of it before, it\u2019s a term popularized in the stock market. And the general idea is that rather than trying to time the market, you inject capital into your portfolio at regular increments. So if it\u2019s stock market, maybe you take some money, put it in once a month when you get your paycheck or something like that. With real estate, maybe it\u2019s you flip a house every six months regardless of market conditions, or buy a rental every two years. And the idea is basically that because asset values accelerate over time, if you can just pin your success to the average return, you\u2019re going to do really well. And this is sort of just this sort of humble way of admitting you can\u2019t time the market, and you\u2019re just going to ride the general market sentiment. So just wanted everyone to be aware of what that is before we get into that show. But with no further ado, let\u2019s bring on Jessie and Tarl.
Jessie, can you tell us a little bit about yourself for those of our audience who don\u2019t know you already?<\/p>\n
Well, what\u2019s up, Dave? Thanks for having us. James, Tarl, how are you, guys? So started flipping in 2010 after the market crashed. I was a big REO agent, so sold hundreds and hundreds of houses. Started seeing everybody else buy my stuff, and I said, \u201cWhat the hell is going on here? Why are these people buying homes that are depressed, that are underwater, but the rest of America don\u2019t want to buy anything?\u201d And picked up one of the investors, started working with them, became a mentor, and taught me the game of flipping. Still one of my good friends to this day, I still lean on him. And then here I am, 12 years later after doing that very first deal that I bought for $65,000 in Southern California, which is insane when you think about it. It\u2019s like 650,000 now.
I probably should have learned the buy and hold game in 2010, because of what I want to be right now. But over 400 flips later, still active, 17 of my pipeline today in this crazy market that we\u2019re in. I\u2019m terrified of it and love it. It\u2019s an addiction. And I am flipping in Southern California, which is one of the hardest markets in the country to really do it, where my average purchase price is like a million bucks, and average rehab is 350,000. So, when you say 15 or 16 deals, all of a sudden it equals 20 million bucks out, which is a lot of money. And thank God James gives me all his money so I can do it. So yeah, it\u2019s been fun, man. I love doing it. It\u2019s crazy.<\/p>\n
Nice. Well, we can at least give you a space to talk about your addiction here today in good company.
Tarl, you\u2019ve obviously been around BiggerPockets for a very long time and a regular on our YouTube channel. But for those of you who don\u2019t know, can you tell us a bit about your flipping experience?<\/p>\n
Yeah, sure. So I bought a seminar in 2005 when I was 20 years old, it was called How to Turn $10 Into $10,000 in 30 Days or Less. And it was about wholesaling real estate. I did three deals. And the third deal, we made a hundred grand on as a double close, and then I quit, because I hated every second of it. So I didn\u2019t get back into it until 2010. And actually, it\u2019s funny, Jessie, so you said you were an REO agent. Were you in Southern California at the time?<\/p>\n
Yeah, Southern California.<\/p>\n
Yeah. So I got associated with a company called Charter Home Alliance outside of Scottsdale, Arizona, where we were a SAM contractor for Fannie Mae. So we would do service area management. So we would do construction for Fannie Mae on REOs, and that\u2019s how I got back into the industry, was I flew around and opened up seven different states. And basically in a nutshell, met all the REO agents, met all the contractors, set up tons of networks. And through that we got involved back into investing in real estate mainly because everything was just sitting there, and REO was insane, and we had access to all the infrastructure and operations. Me and two of my buddies basically started another company and then started buying. That went well until February 2014, and then the three of us broke up because the other two became, in my opinion, they became crazy. Money does funny things to third people.
So one of them got into drugs, it was just stupid stuff and I left immediately. Never wanted to do it again. And then in October 2014, one of the funds that we partnered with a lot hit me up in Seattle. This is when I moved to Seattle and said, \u201cHey, let\u2019s partner up in JV on deals.\u201d And I started fixating real estate at that time. That\u2019s when I started buying a ton from Jimmy, actually, James is there on this. I think in, what, 2015 or 2016 bought 30 houses from me, I can\u2019t remember how many, but that was how I got back into the business.
And then by mid 2015, I stopped partnering with people and started doing everything internally at that point and went crazy. If you add everything up, approaching probably 680 plus deals or so, give or take, since 2010. And that also includes all my partnership ones that I did with my buddies in 2010, 11, 12, 13, and part of 14. And then, yeah, mostly Seattle, Tacoma, since 2015, also Portland. And now I live in Austin.<\/p>\n
Nice. Do you still hate it?<\/p>\n
Oh, I\u2019ve never liked it.<\/p>\n
Not Austin, just real estate.<\/p>\n
Oh, yeah. I like Austin. I\u2019ve only done real estate for money, and I\u2019ve never enjoyed it too much. I\u2019ve enjoyed the bank account.<\/p>\n
Wait, are you being serious?<\/p>\n
Honestly, I love that.<\/p>\n
I\u2019m a hundred percent serious.<\/p>\n
It\u2019s a means to an end, right? You don\u2019t have to love it.<\/p>\n
I don\u2019t think I\u2019ve ever heard somebody say it like that, that\u2019s so successful. I love the, \u201cI actually hate it, just like the money.\u201d<\/p>\n
It\u2019s more fun to say, \u201cYeah, I hate real estate.\u201d I mean, I hate moments for sure. I love holding onto real estate now, which is great, until a tenant becomes an issue and I hear about it. I do everything I can to know nothing about what\u2019s going on with our tenants on our properties, but I know we\u2019re going through an eviction right now. And I hate hearing about that stuff and whatnot. So it\u2019s great when I look my balance sheet, that\u2019s fun.<\/p>\n
It\u2019s funny you say that because I hate rentals. I\u2019m addicted to the flip. I mean, any deal, whenever I buy a rental, and James owns a few, I look at it and I go, \u201cYes, $200 in cashflow. Woo, let\u2019s go, baby.\u201d Or flip it and make $42,000. And it\u2019s like, now here I am 10 years later and I have eight freaking rentals. That\u2019s it. And it\u2019s like probably should have kept some of those.<\/p>\n
We\u2019re in the same boat on that. I didn\u2019t keep my first rental until 2016.<\/p>\n
And at the end of the day, each property has a purpose, and that\u2019s the purpose of flipping. We could keep them, you can buy them, but at the time you\u2019re making a decision to increase every property. I don\u2019t really have any regrets of the properties I sold because each flip had a purpose. And for the last 20 years as we\u2019ve been flipping homes, it always has a purpose, and you have to kind of adapt and change with the markets. And right now, the purpose is-<\/p>\n
The purpose just making you as much money as possible.<\/p>\n
It\u2019s to grow your cash. The more cash and capital you have, the more passive income you can have, and the more passive income you\u2019ve got coming in, the more you can chill out, even though I have not figured out how to chill out yet. But it all has a purpose. And right now it would\u2019ve been great to keep them, but in today\u2019s market, it\u2019s hard to keep rental properties because the rates are so high. And flipping has a really good purpose in today\u2019s market, you can buy properties still increase your cash, and with the cost of money being very expensive and everything being expensive, it will grow the capital.
And that\u2019s the beautiful thing about flipping in today\u2019s market, in this market has been changing rapidly with their interest rates. And I think what we\u2019re diving into deep today is you can flip in any type of market. I\u2019m excited to have Jessie and Tarl in here because they\u2019re a bunch of deal junkies, and I get along well with deal junkies. It\u2019s not chasing that deal and growing money. With flipping right now though, Jessie, I know you\u2019re in a very expensive market, the rates are expensive. I know for us as borrowers and flippers, cost of money has gone from 8-9% to 10 to 12%. What kind of changes have you made in today\u2019s market with buying with the cost of money being at where it\u2019s at your whole times, and then also with the dispos taking a little bit longer? Because it makes a huge impact when you\u2019re buying a million bucks, that\u2019s 10, 12 grand a month in your hold times.<\/p>\n
Yeah, I mean it\u2019s a ton. So I\u2019m at just under one point and nine and a half still. So my rates are still pretty good on hard money with a 15% down of load to cost. So it\u2019s decent. I loved it when it was 10% down. The key right now is I\u2019m buying a lot less though, James, where I used to keep 25 flips going up one time, and that doesn\u2019t mean I\u2019m flipping 25 at one time, just means I\u2019m holding 25 and making payments on a bunch while I\u2019m flipping 10. So I\u2019ve gone down to 11, 15, because I\u2019m trying to turn them faster. I looked at the math and I said, \u201cHow many crews do I have? Let\u2019s divide it up. How fast can I turn these? How long can I let something sit?\u201d Because the problem when you\u2019re a flipper is you don\u2019t ever want to say no to a deal.
Someone brings you an opportunity, you say no, you worry that it\u2019ll come back again. One, I\u2019ve got some patience now and I\u2019ve been okay to say no to some stuff and let them realize, \u201cHey, I\u2019m still buying. I just need to sit tight on this one because I\u2019m maxed out.\u201d But it\u2019s all about speed. Because we see rates right now are going up. What\u2019s going to happen happen? We\u2019re hitting the winter months. Is it going to slow down? We had a great peak this spring where everything I sold, I sold for five, 8% above list price, which was fantastic. And when you look at it, I\u2019m looking at the average of the whole year. I hate what could be coming here in a couple of months in November and December, where I list something and I might get 5% less now, but I made up for it in the front half of the year.
The way I look at, I\u2019m always flipping, and I\u2019ve been flipping for 10 years straight, is, I don\u2019t necessarily look at every deal on a deal by deal basis. Obviously, I want to win on every single deal, but I\u2019m okay with looking at, \u201cAll right, I flipped 28 this year. I was definitely way up on all of them. Couple that didn\u2019t work out because I went overrun on costs, or timing, or I did a bunch of projects where I\u2019m adding accessory dwelling units, so that picked up the timeline set of six months. I\u2019m at 12 months, I\u2019m at 15 months on some of them.\u201d But the value add is so big that I\u2019m able to offset if the market adjusts a little bit.
So there\u2019s a balance there in those that I really like. So a lot of it right now is just speed, speed, speed. And luckily, my money is still pretty good. But when I started I was at three points and 12% on my hard money. I see people like, \u201cOh, rates are so high, rates are so high.\u201d I mean, I flipped a couple of hundred homes at three points and 12%. So it can still be done, just buy better.<\/p>\n
I was getting loan shark money back in the day, it seemed like in 2008 we were financed at four points at 18%, and that was the best we could do in 2008. And I\u2019m pretty sure my legs would\u2019ve got broke. We didn\u2019t even turned the money.<\/p>\n
To that point though, Jimmy, I mean, those of us that were in the market even that time period, I think about why Jessie didn\u2019t buy you hold onto much. I didn\u2019t hold on too much. It was hard to get long-term financing, but it was easy to get\u2026 You had hard money, so it was like a lot of us were flipping because money was harder to get, but deals were out there. And I think that\u2019s just something to realize a lot of us, we can\u2019t wait for the market to crash if it crashes at all. But when it does, money\u2019s harder to get and people usually run away from at that point. Or they don\u2019t keep the deals or they flip them or whatever, a wholesale or something like that.<\/p>\n
Yeah, because the DSCR wasn\u2019t around in 2008, 9, 10, 11 and 12, when you could buy everything for under a hundred grand in California and then BRRRR out of it. That\u2019s a newer product. So you\u2019re right, I remember having these amazing deals, having a ton of equity and then being like, \u201cOkay, I can\u2019t refi out of them, because I already own four or five in my name,\u201d where there used to be a cap on conventional financing on how many you can have in your name and things like that. So it\u2019s been good the last couple of years with all the BRRRR, and the DSCR stuff.
And James, you mentioned earlier about there\u2019s a function for the money and right now maybe if we can\u2019t refinance out of stuff, or it doesn\u2019t make sense to hold the rental. So yeah, this is the capital growth phase of our business for the last few years. You guys, I mean, James, you probably held onto a lot of deals in the last two, three years when you were able to get three and a half, four and a half percent DSCR loans, I would imagine. Now, if those aren\u2019t penciling, now you\u2019re like, \u201cJust turn the money, build more capital. If the market shifts in another two years and rates come down again, then you move to that cycle again and you hold more rentals.\u201d Am I guessing that correctly?<\/p>\n
Yeah, as capital gets constrained, and I think this is a good thing to discuss, flippers have to adjust. In every market you have to adjust. And money was really loose. You had DSCR loans, which were basically loans that covered\u2026 Your income would get you qualified for the loan, right? So if you had higher rents, the lender\u2019s going to lend your loan amounts based on the income you\u2019re bringing in. Hard money was cheaper too. Down payments were lower. And what\u2019s happened with hard money is it\u2019s gone kind of back to what it was. Standard hard money downs were 20% down. And lenders have to protect themselves as the market gets riskier, and that\u2019s what it is done for flippers is it\u2019s tightened up the market again, but it\u2019s just, as the money increases, that just means we have to pivot. And so Jessie and Tarl, what pivots have you guys had to make when you\u2019re buying now, when you have an extra two to three points on your monthly interest?
I know it\u2019s affected us quite a bit, because we\u2019ve been flipping a lot of multimillion dollar properties. So if I got a $2 million loan, my payment is 2020 grand a month. And if I got 10 of them, it\u2019s a big nut. And so that basically boxes me into where I can only do a certain amount of projects of that size. What pivots have you guys made to buying in today\u2019s market? Because as the market has cooled down, it\u2019s also created some amazing opportunities. We\u2019ve been buying things a lot cheaper right now. How have you adjusted around? For us, we got to buy deeper, we add extra carry timelines on there. If our average flip was taken to about six to seven months, we\u2019re running our performance at eight to nine months just to be safe. What adjustments have you made with this cost of money, because has really locked up some flippers and it\u2019s made a lot of them go to the sidelines rather than just keep buying?<\/p>\n
Well, I\u2019m seeing, I\u2019ve moved a lot back to the minor cosmetic when I started in 2008 and 2010. So [inaudible 00:16:52]. Trying to get into a property and see if I can flip it at four months, but not doing the additions, not doing the accessory dwelling units like I\u2019ve done for the last couple of years. It\u2019s not to say I won\u2019t do one if I see a big opportunity, but I\u2019ve got a handful of the deals that I\u2019ve sold in the last three months that it was lipstick. I mean, it was just new cabinets, new countertops, laminate wood floors, the way I used to do it. The stuff that I don\u2019t want to post on Instagram, the finished product looks like something that Tarl would have to flip my flip. But I\u2019m getting in and getting out fast and make it 40 grand, and the carrying costs are very low, hard moneylenders are very happy with me right now, my private guys because turning the capital.
Because a year ago, they\u2019re like, \u201cHey, man, you\u2019re holding onto this low for 12 months, 14 months. We need you to start turning this a little bit quicker.\u201d So I\u2019m really glad the adjustment happened, because it kind of got me back to the beginning of when I first started flipping, and how it was just a volume game, just quick, quick, quick, instead of chasing big home runs on large purchase prices. That\u2019s probably the biggest adjustment that I\u2019ve made.<\/p>\n
For me, I mean, full disclosure on my part, I wouldn\u2019t say I\u2019m one of the guys on the sidelines, but I definitely for sure am not on the starting line right now when it comes to investing out there. I\u2019ve been looking for any excuse whatsoever for probably the last four years to stop buying properties. And last year I already moved out of Washington, all my properties I own are in Seattle and Tacoma area, and I was just looking for an excuse even before the market shifted and before rates even went up to just stop buying in that area to begin with for a period of time. I think it\u2019s just because I was burnt out of that area and I just didn\u2019t want to be there. That had nothing to do with markets whatsoever. It just had everything to do with personal lifestyle. But when the market changed and when the rates went up, I used that as a reason to say, \u201cAll right, I just don\u2019t want to buy right now.\u201d
So we closed everything out last year. And then here in the Austin area, I was really seriously looking for some time. What we instead did when it comes to finance and money, when it comes to debt wise, the stuff that we have done has been more with private capital, and also with private lenders instead of traditional lenders. And any type of financing that I\u2019ve had to do outside of that has all been just internal stuff that I\u2019ve already had with lines of credit and so forth. And it\u2019s just made it a lot cleaner on our end.
Right now, I\u2019m very seriously digging into multiple markets to jump back into. I\u2019m still looking at Seattle\/Tacoma to jump back in there again. That\u2019s why I was like, \u201cHey, Jimmy, I\u2019ll call you later.\u201d But for the most part, there\u2019s a few other markets that I\u2019m more focused on, just because of cashflow purposes and being able to buy cash, raising money and so forth to be able to do that, instead as a cash hold, instead of having to deal with having to get debt and rely on DSCRs and all that stuff right now with rates being so high.
And that\u2019s what I\u2019m more focused on more than anything right now. It\u2019s forced me to do what I should have done a while ago, which is focused on the long-term. I think one of the things that I\u2019ve loved about house flipping is that, I joke about you get to weigh your money instead of count it, when you do it. But at the same time, I have a good buddy of mine that only bought and hold since basically 2009. And he does really, really well with budgets, right? He\u2019s making 200 bucks a month on a house. He\u2019d have to save money up and go buy another down payment, and get another down payment and save up for another down payment, or leverage and get a line of credit, and then use that to go get more down payments on the houses and then pay those off, so forth.
So he is really good at budgeting. When you look at a lot of house flippers that were making a lot of money, we were the opposite. We didn\u2019t have to budget it as much because we were making so much cash and whatnot for it. So it also had me thinking short term all the time, like six-month increments instead of long-term increments. And for me personally, with the way rates are, I\u2019m happy that it\u2019s done that. I am hoping that the rates don\u2019t ever go down anytime soon. I hope they stay up.<\/p>\n
Why? Because you want prices to go down?<\/p>\n
I don\u2019t think it\u2019s going to affect single family as much as people might believe due to rates. We can talk about unemployment, I think that\u2019ll affect single family more than the rates will. But if the rates dropped right now today, I think it would just destroy our economy in so many ways. There\u2019s reasons for that. It\u2019s already on track for that. But real estate shouldn\u2019t spike up like it did the last few years. We all know that. We\u2019ve all benefited from that. I\u2019m thankful for it. But at the same time, if it all of a sudden just dropped dramatically right now, it\u2019s going to create more issues than good.
And also bring more people back in the market and create more competition in the short run drive prices up again, which I don\u2019t think is a good thing. And I got a lot to say about that, but that\u2019s where my brain is right now. I want the rates to stay up right now.<\/p>\n
So, why then are you considering jumping back into the market? And are you looking at flipping or more of a buy and hold strategy?<\/p>\n
Both. So the reason why I\u2019m jumping back in is I can\u2019t time the market, it\u2019s at the end of the day. For me, I took a little break, and being able to just have more fun and shore up some stuff on my end, we\u2019ve been putting more money into the deals we already have. We have some commercial properties, we\u2019ve built up more. We have some single families, we have some build projects that we wanted to get back on track and stuff for our end. And more focusing on that to be more strategic this time, and not just reacting to just flip, flip, flip, buy, buy, buy, because you have a machine that you have to feed. That\u2019s one of the things that is cool, is you get to build this great operation when it comes to flipping, but at the same time you got to feed that machine. And I always kind of hated having to flip to feed the machine, versus being able to keep everything and whatnot, which that\u2019s just more my mentality lifestyle wise in my head. Dave, I\u2019m sorry, I ranted, what was the question again?<\/p>\n
No, you answered my question. I was just asking about flipping or renting. It sounds like both.<\/p>\n
Yeah, both opportunistically. But more on the long-term thinking of it. So dollar cost averaging houses and whatnot, being able to sit there and go, I can\u2019t time when the best market is. I\u2019ve thought the market was going to crash since 2016. And every single month I\u2019m like, \u201cThis is the month we\u2019re all doomed.\u201d And I\u2019ve been wrong every freaking time. So when Covid hit and your bank stopped lending, I\u2019m like, \u201cGet rid of everything.\u201d We didn\u2019t do that, but I was definitely thinking it. So I\u2019m sure some of us were too.
But at the same time I\u2019m like, \u201cI can\u2019t do that.\u201d So instead, I think single family is still a good investment. I think that, for me, getting back in the game more hardcore over the next 18 months has a lot to do with what I think might happen in the multifamily world and commercial world later down the line, so that we\u2019re building up our credibility still in the space in different markets. So that way when things kind of fall apart in the other asset classes, we already have the ground and operations set up in the markets we want to be in to be able to maybe grab some bank owed properties that are more in the multifamily side.<\/p>\n
And before we move on, Tarl, I want to ask, because I think you\u2019re the only one here who\u2019s actively looking at new markets. What are you looking for in those new markets for flipping or buying hold?<\/p>\n
So we\u2019re looking at everything as cash. So we\u2019re not really caring about the interest rates as much. So things have the pencil out there. So it\u2019s got to be, I could list some of the markets, but for the most part, if we\u2019re buying something cash and forcing the appreciation on it through the burst strategy, but without actually refinancing instead holding a cash, then these markets have to be able to pencil out at least on an eight cap of some sort, seven to eight cap, for a rental buy and hold. But that\u2019s also forcing the appreciation through the bird strategy. And at the same time, there\u2019s got to be demand in those areas and have property management in those areas, and all that stuff, because we don\u2019t self-manage inside. So there\u2019s great markets that I\u2019ve been looking at that are fantastic for maybe a flip, but would suck for buy and hold because property management would suck in that area.
And at the same time for us, we\u2019re looking at where are people moving to? Where are the jobs going? What\u2019s the sustainability? Was it one trick pony kind of town that\u2019s out there that\u2019s dependent on one industry? Just all the basic stuff that you\u2019re going to want to look at for long-term growth. Versus flips, there\u2019s tons of, I think you could flip anywhere, in my opinion. Doesn\u2019t matter what\u2019s happening in that market, I literally think you could flip anywhere and jump into a market and make something happen. It\u2019s just, do you want to hold onto that property for five to 10 years in that market? That\u2019s where the challenges come in that kind of change our thinking on things. I\u2019ve never thought long-term in this business, ever, so it\u2019s always been six months at a time. So it\u2019s been an interesting game that we\u2019ve been playing lately on my end to get rid of that thinking.<\/p>\n
And I think what Tarl mentioned is a lot of flippers did, they took a little break to look at what\u2019s going on with their current existing business to change their strategies around reset, because this market is creating different types of opportunities to flip properties a different way. Things that have caused us issues are the cost of labor. The market has gone up dramatically over the last three years. The labor has been a nightmare getting people to work, and getting people to show up. Especially in expensive markets, like Jessie, I know you\u2019re in LA, right? Not only was there a lot of flippers going on, there was a lot of residential purchasers buying and building their dream homes, which are sucking up a lot of our flipping talent. Jessie, how have you combated? Because I know in West Coast cities, Tarl\u2019s there, I\u2019m there, they\u2019re expensive, the labor\u2019s a lot more expensive.
As we go into this new market, rates have changed, is creating different types of opportunities that you can buy. So things that we\u2019re looking at is, how do we also reduce the labor costs and do things a little bit differently? What have you been doing to get those costs down? Because that\u2019s a big deal going in. Money\u2019s expensive, labor\u2019s expensive, and the resale\u2019s not quite as expensive as it was. So you got to change things around. So what have you been doing to battle that labor market down? It\u2019s been a huge nuisance for us.<\/p>\n
Yeah. So I think that the fact that there was Covid and everybody started building, actually helped me, because I definitely had a laziness factor where I had my handful of crews that I\u2019ve worked with for so long that I stopped kind of micromanaging the numbers. It\u2019s like a roof would used to be 10 grand, then it went to 22,000 or whatever, and it was like, \u201cWell, but my prices went up a hundred grand. So I\u2019m making more money so it makes sense that they\u2019re making more money.\u201d And I just didn\u2019t question it. Then last year\u2019s market happened. And all of a sudden it\u2019s like, \u201cOh my god, this market\u2019s going down. What are we going to do?\u201d And I adjusted and I said, \u201cOkay, well, I need to just get through my inventory.\u201d So I stopped buying for nine or 10 months total, just kind of like what you talked about.
And it was all a function of I just want capital to come back in so I can reassess. And when I was doing that, all of a sudden I\u2019m like, \u201cHey, I need to go get three bids for this roof. Let\u2019s clean up all these systems. Let\u2019s button down the budget. Let\u2019s make sure that we\u2019re not just being sloppy because we\u2019re used to doing so deals and used to making money and we weren\u2019t watching it.\u201d So the biggest thing we did, James, was just kind of get back to the basics of saying, \u201cHey, I love you and I appreciate you and I know we worked together for five years, but your prices have creeped on me a ton, so I\u2019m just going to go get two more bids.\u201d And then I can get those bids and I could go back to leveraging them.
And the one thing, because when you have a crew that you\u2019ve been working with for five years, 10 years, that they\u2019ve never had to go get another job, because they know that Jessie\u2019s always feeding the machine like Tarl said, right? It\u2019s like, \u201cI got to make sure I keep buying a house, because I don\u2019t want to lose that crew.\u201d That is a legitimate fear, because I don\u2019t want to have to go out there and train. Well, last year when I knew I was downsizing the business and slowing it down, I was like, \u201cOh, I\u2019m starting over, essentially. I don\u2019t mind going and interviewing new crews.\u201d And that was huge.
I brought my cost down on these rehabs like 30, 35%. And it was kind of sad to say how loose I was for so long, because when money\u2019s coming in, you don\u2019t necessarily need to micromanage every little piece of it. So for the last 10 months, 11 months, we\u2019ve been buying a ton, and scaling the business back up. But at these better margins now, at these better expense models, which has been really, really cool. So plus, making sure that I\u2019m flipping them faster. Yesterday I did a video where I said, \u201cI\u2019m busting the Dave Ramsey debt model of stacking payments to chip away at one credit card, then move all that money to the next,\u201d it\u2019s called the flip stacking model. I\u2019m moving three crews to a house today.
Because I\u2019m like, \u201cHey, if this market\u2019s going to adjust on us the next three months and I\u2019ve got 11, am I working on 11 at a time and then I\u2019m five months from now, and then they all come on the market?\u201d I\u2019m like, \u201cNo, I need something on the market in two weeks.\u201d So it\u2019s like landscape crew, exterior crew, interior crew, pulling from three different houses onto one and get everything, get that house done in two weeks, and then stack that crew to the next one. Because now I just want to make sure I\u2019m getting something on the market every two to three weeks, instead of the last five months of like, \u201cOh, I\u2019m going to have all these beautiful projects, and then you\u2019re kind of slow because waiting for a sub.\u201d
It\u2019s like, \u201cNo, I\u2019m moving everybody and I don\u2019t care if they\u2019re on top of each other, and I don\u2019t care if they\u2019re off at me, that the painter doesn\u2019t like that the one guy\u2019s there, and they\u2019re always pointing fingers.\u201d It\u2019s like, \u201cDeal with it. I need this house done. Everybody\u2019s on. We need to be on the market by September 15th and then the next project by October 1st, the next project by October 15th.\u201d
So that was I think a topic that I did, or an idea that I did, six, seven months ago when the market was different, or a year ago, and it really worked. And then all of a sudden I stopped doing it again. And then now I\u2019m like, \u201cGo right back to that model. Let\u2019s push, push, push.\u201d So just micromanaging the crews more than ever has been a huge way to get those costs down and making them realize that I\u2019m not just a fat cat that they can always count on and that I\u2019m not checking their budgets or their numbers anymore.<\/p>\n
It\u2019s really interesting, everyone, you sort of get complacent and you start trusting people. And I mean, it\u2019s just inevitable. But I\u2019m curious, how big a turnover was it? You run a lot of crews, how many are you still with that were with you before you started this crackdown?<\/p>\n
So last year, seven crews that I had for multiple years, and I\u2019m down to two.<\/p>\n
Oh, okay. But are you still at seven total crews, but you replaced five?<\/p>\n
No. So from seven down to two, up to five. Added three more. What I\u2019m realizing is the old model of the two-man crew, or the three-man crew, that would do everything on a house, doesn\u2019t seem to make sense today like it did seven, eight years ago. I\u2019m actually finding that it\u2019s cheaper to go to every single sub, than the idea where it used to be like, \u201cOh, this one crew does paint, laminate baseboards, they install cabinets, they do all the minor electrical, minor plumbing.\u201d Now it\u2019s like, \u201cDude, it\u2019s cheaper for me to go with a stucco guy than to have my two-man crew,\u201d because when you\u2019re paying these guys 200 bucks a day, or 250 a day for a two, three-person crew, and then it takes them three weeks to do stucco versus a professional crew that comes in, the cost may be the same, but the speed. That\u2019s the biggest thing right now. Everything is speed.
If I can have a stucco crew out there while I have the wood floor guys on the inside, while someone else is building a fence and the exterior, it\u2019s better to go that route because I just knocked out three trades in the same week and a half than having that crew that kind of jumped, because I was trying to save 20 grand. It\u2019s not saving me 20 grand when we have 10% interest rates on these hard money loads.<\/p>\n
I think the biggest thing you just said to everybody listening to this is how much we\u2019re all excited to be learning how to flip houses because we want to learn construction. And all of us got into this business because we love construction. And the fact that you\u2019re just mapping out a lot of what you just said, Jessie, though, requires a lot of project coordination, project management, timing, being able to figure out, making sure the subs don\u2019t step on each other and stuff that you don\u2019t have electrician going in there at the wrong time. And the same thing with plumbers and HVAC guys and whatever.
But that requires a lot of, which is all true, I mean, the three of us, Dave, I don\u2019t know if you flip, sorry.<\/p>\n
Nope.<\/p>\n
For the three of us that do, most of us have gone to that model of hiring subs directly versus the one GC, but it is because we leveled up our construction game because we had to, right? At some point. If we all wanted to, we\u2019d hire one GC and walk away and never see the house again until it\u2019s done and they call us up saying, \u201cYou can list it.\u201d That\u2019d be freaking awesome. That doesn\u2019t happen.<\/p>\n
We just have to be better buyers to do that, right? We can get it for 30 cents on the dollar, let the builder do it, make his 25% GC fee.<\/p>\n
Yeah, but that\u2019s what happened when the market shifted. I think it brought up so much to people how bad they were at their operations in their business, in a sense. And where our business as house flippers or investors, the 80 plus percent of it is in the construction of the rehab on the day-to-day working aspect of it. The acquisition side of it, you can be like me where we don\u2019t door knock or do direct marketing, we just go buy from wholesalers and agents. So you have to have that aspect of making sure you\u2019re comping the properties correctly and you\u2019re getting the right deal. Or you can be a business that\u2019s also direct marketing, acquisition and sales, all that great stuff, and you\u2019re buying the properties in additional to rehab. But if you\u2019re just focusing on buying the properties and most of the business is in the construction of the rehab and making sure you\u2019re staying that budget, and with the way things have been, I think it woke up a lot of house flippers to be how bad they were at that.
And in order to make the business work today, it\u2019s having more sure numbers. I remember, Jimmy, I don\u2019t know if you remember this, I remember you and I talking on the phone I think in 2022 or 2021, I can\u2019t remember. I think it was 2021. We were just like, \u201cLet\u2019s just throw darts to figure out what construction cost is going to be today because it\u2019s changing so dramatically.\u201d But that said the other aspect of when the market shifted a lot of house flippers, there\u2019s a number of house flippers that were terrified of losing their ass, basically, and losing money, and the way rates are and whatnot. And because their projects were behind and there\u2019s a bunch that did, but Jimmy, not to keep bringing you up, but I remember us being at BP CON last year and we were kind of talking about that, and I agree a hundred percent with what you said, is these guys that were complaining about losing money, they\u2019re not remembering that they made a million bucks flipping houses already. They just didn\u2019t save any of their money.
So the reason why most house flippers lose at markets like this is because of poor cashflow. And I mean, business cashflow.<\/p>\n
And how most flippers the last few years thought they were Gs is because they flipped the house and it made a hundred grand more than they expected. Even though the rehab costs went up 50,000, and they still made a hundred, right? It\u2019s like had nothing to do with the flipper, had to do with the market, just went up a ton because of Covid. And then they started getting cocky, and then they started buying at lower spreads, because everything was like, \u201cWell, this deal has upside.\u201d And that\u2019s terrible. I mean, that is the quickest way to exit this damn business as a flipper, is to break your buy box just because you want to do a deal.<\/p>\n
Yeah, or spend all your money. I mean, we lost 150,000 last year on properties, but that would destroy a lot of people. But at the same time it\u2019s like, \u201cAll right, because we have cash that we were able to handle it, and it\u2019s also an average of all the houses we do and everything, it\u2019s just part of the business.\u201d But I guess the thing I\u2019m trying to say is that if you\u2019re in this business, make sure you\u2019re managing your cash flow because things change, stuff happens.<\/p>\n
Along those lines, are you seeing people leave the business not as voluntarily as Tarl may have due to force of circumstance?<\/p>\n
I have. You could see it in, I mean, I don\u2019t know who else has access to this stuff, but you could see it in the amount of people looking for new debt. And so what I\u2019ve noticed is that people that were the A players before Covid and during Covid, were more likely to wait and see because they\u2019ve already built it up. That\u2019s what I\u2019ve seen at least from people I\u2019ve talked to, all the event stuff that we host and everything, that they\u2019re more likely to not be jumping head first, because from what I\u2019ve noticed, they don\u2019t want to lose what they built. So it\u2019s more of a fear aspect of, \u201cI\u2019ve built this up, I don\u2019t want to lose it by risking it.\u201d So they\u2019ve already risked it before they build it, so they don\u2019t want to do it again. And that\u2019s not everybody, for sure, but there\u2019s definitely a good chunk of people out there like that.<\/p>\n
And scared money don\u2019t make money.<\/p>\n
A hundred percent, a hundred percent.<\/p>\n
People are leaving and it\u2019s like good, I\u2019m thankful. Because honestly, it was too oversaturated for a minute and people were making bad decisions. And what we talked about is people got lazy, including myself. It\u2019s like you could buy anything and it was going up in value. You could mismanage your project, you were going to make money. Now it\u2019s gotten back to the grassroots of flipping. Buy a good deal, manage the construction, manage your plan, you can make account for your cost, and you can make money at it. And what it\u2019s done, it\u2019s funny because you hear people say like, \u201cOh, flipping\u2019s a terrible thing right now.\u201d
I hope everyone continues to think so because the margins we are getting, we were buying at a 30% cash on cash return prior to Covid, and that\u2019s with leverage in there. It\u2019s about a 13 to 15% cash on cash return. Now we are hitting 50 to 60% cash on cash with big fixers in there. So the margin has doubled, so it makes it less risky, even though the market\u2019s a little bit hairy right now. Rates keep creeping up, it\u2019s very sergy, people show up one day, they don\u2019t show up the next. And you kind of have to weigh it out. But as long as you can pat it and there\u2019s enough margin in the deal, my worst case scenario on a couple of my deals is I work for free. I\u2019m still going through the process, but if the market corrects further, there\u2019s still enough padding in there to get the deal done.
And so there\u2019s some really, really good opportunities if you can put your pen to pencil, and you want to figure it out, like Jessie said, bring out more people, have it bid out numerous times. We basically fired every one of our contractors from the last couple of years and we restart, because it\u2019s either get on the ship or get off the ship. And unfortunately, a lot of them, now they\u2019re all calling us for work too. \u201cHey, can I get work?\u201d And it\u2019s like, \u201cHey, no, I will give you work, but we got to talk about this.\u201d And so the sediment, it\u2019s funny, it goes in surges. Your flippers are no different than your consumers. Every time the rate shifts like a quarter point, they show up to your house and it goes back up, they don\u2019t show. The flippers are the same way. They\u2019re like, \u201cOh, I heard it goes well, I\u2019m going to look for a second,\u201d and then pull back out. So you consistently keep buying, the margins are better.<\/p>\n
Yeah, that\u2019s a dollar cost averaging aspect of it, where, I mean, you can\u2019t time the market you just got to\u2026 But I mean, everybody\u2019s got their personal preference with what they want to do with their money at the same time.<\/p>\n
But Tarl, I wanted to ask you about that because dollar cost averaging I feel like works really well for rentals where there\u2019s less risk of principal law, actually losing money. You could underperform, but it\u2019s kind of a paper loss. For people who are relatively new, do you still recommend that strategy? Because if they have all of this capital invested into a pretty volatile industry right now, you might not get to average it out. It might just be one and done for you.<\/p>\n
Yeah. No, you got to make money on that deal.<\/p>\n
Your first one, you got to hit it. You got to make money on that first deal. You got to make money on the first 10, right?<\/p>\n
None of my advice ever, ever, whether it\u2019s on my Instagram or anything I\u2019ve ever done, has ever been for new people. I just want to throw that out there.<\/p>\n
Okay. All right. Fair.<\/p>\n
No, you got to have money to lose and be okay with it. And you\u2019re always risking. I mean, everything at the same time, and everything we do, is educated guessing. That\u2019s what it is. We\u2019re like, \u201cHey, I feel really well-educated and I\u2019m guessing really strong because I\u2019ve done this enough.\u201d You\u2019re measuring risk. Risk equals reward. It\u2019s all about mitigating that risk and whatever you\u2019re comfortable with. And I\u2019ve seen a lot of new people that when the market was going up, still lose their ass, because they didn\u2019t know how to measure their risk associate appropriately. It doesn\u2019t matter what\u2019s going on with the market, it could be going up and you could lose money, and there\u2019s plenty of people that did that, right? And there could be going down and you can make a ton of money. So I\u2019m not really too concerned about that. But whoever\u2019s investing, I mean, if you\u2019re taking your hard-earned cash or other people\u2019s hard-earned cash, I hope you know what you\u2019re doing. That\u2019s what it boils down to.<\/p>\n
I always say, and this is going to go opposite, I always felt like flipping is not risky. There\u2019s so much science to it if you follow the science, and you establish a really good buy box, 65% of a RV. You know what I mean? The market would really have, everything would have to go wrong, which of course it could happen, but even through the last year, there was one loss that I took in the last 10 years on a house. There was some breakevens, or made five or 10 grand. And that loss that I took was out when I went out of state, when I left my core market and I was like, \u201cOh, I want to buy in Park City.\u201d I also bought it to be an Airbnb. So I had this one plan and then decide, construction went bad, everything took forever, storms hit, and then I was like, \u201cYou know what? Forget this, dude. I don\u2019t want this rental. The rents aren\u2019t going to be as good.\u201d
And then I decided to sell it, and that\u2019s when I took the hundred thousand loss. And I was honestly happy to take it, because I was like, \u201cJust get me the heck out of this market.\u201d I moved to something I don\u2019t know, go back to where the science makes sense for me, where I know Southern California real estate like I know it inside and out being a realtor here for 17 years. And so I feel so comfortable and safe flipping if I stay within my parameters.<\/p>\n
I do want to add to that though. It\u2019s just not to throw it out there, but it\u2019s for those people or anybody listening to this that\u2019s not on the West Coast, they might not have those same experiences with flipping and feeling comfortable with it, because us on the West Coast, we definitely benefit when it comes to market appreciation versus other markets and so forth. So it\u2019s not always the same when it comes to that market.<\/p>\n
Well, and that\u2019s why I won\u2019t buy out of state. You see a lot of talk about go get deals in Columbus, Ohio, or rentals. It\u2019s like, even to buy a rental in California is so expensive. But when I look at like, okay, it\u2019s expensive, I get more depreciation, I\u2019m going to get more of an appreciation play over years, because this is one of those markets that goes up the most, rents increase at a crazy high rate. So if you are really good at buying every great flip, or not every, most great flips are usually good rentals because you\u2019re buying for 60 cents on the dollar. And then we have all this upside. So it\u2019s like when I have this great debate with friends that are like, \u201cDude, go buy 50 units in Ohio,\u201d and I\u2019m like, \u201cI\u2019ll go buy a four unit in LA where a one bedroom rents for 3,500 bucks a month.\u201d
But I think I stay within my comfort zone, and why I think it\u2019s safe to be an investor, right? Follow your buy box and stay where you know the market. I bought one deal a couple of months ago in Johnson City, Tennessee. Random as all can be because I was like, I want to test a place where I\u2019m buying something for 70 grand that if everything goes sideways, it\u2019s like, \u201cAll right, who caress? It\u2019s 70 grand. I\u2019ll still make a 5% cash on cash return, no debt on it,\u201d stuff like that. And then I\u2019ll see if I feel comfortable and start to go in those directions and do a little bit of more out of state. But every time I do the math on it, I\u2019m like, \u201cJust go buy a fourplex in LA.\u201d With ADU laws, make it six units. It\u2019s such an easy way to make money, I feel like, in a comfortable area.<\/p>\n
All right. So before we get out of here, this has been a very interesting conversation. Did not go the way I was expecting it to, and I like that.<\/p>\n
We could change it. What do you want us to say?<\/p>\n
What was the topic?<\/p>\n
No, I love it. I really like the diversity of opinions here. It\u2019s great. But I am curious if people are interested in getting into flipping. Let\u2019s start with you, Jessie. Do you have any advice on what they should be thinking about as we head into, not just an already difficult time, going into a difficult season of the year with rates marching upward? What advice would you offer?<\/p>\n
I\u2019d say when you\u2019re penciling something out, overestimate on your rehabs, overestimate on how long it\u2019s going to take. Just build a buffer in every single direction, which means it\u2019s going to be harder to buy the deal. But if you do that, then the science is going to make sense and you\u2019re going to be safer. So, I also think that flipping, I made a lot of money through the downturn, I made a lot of money in the up. I think we\u2019re going to be fine, and just stick to buying something and be quick with it. If you\u2019re going to buy something and you\u2019re going to, \u201cOh, it\u2019s going to take me 15 months to do,\u201d don\u2019t do it. Don\u2019t buy something that\u2019s tenant occupied. I get people all the time, it\u2019s like, \u201cI\u2019ve seen this great deal. It\u2019s got tenants in it.\u201d
Like, no, not in California. Do not do that, right? Buy something vacant. Buy something that could be a minor cosmetic fix. Get in and out 90 days or back on the market in 90 days, and you\u2019ll make a little bit of money. You\u2019ll win, you\u2019ll feel good, you\u2019ll learn a lot, because it\u2019s education on the first five, 10 deals, right? You\u2019re going to have to go through all those growing pains. And us with four or five, 600 deals, we\u2019re still learning.
So I would just take it safe. And I\u2019m not a big off market guy. I\u2019m big into agent outreach. I love getting deals from realtors. I feel like I get some of the best deals I\u2019ve ever gotten. Not necessarily the MLS, but just realtors. So it\u2019s focusing and hitting agents like crazy, and letting them know you\u2019re an investor, I think is one of the best places to get a deal even right now.<\/p>\n
All right. Tarl, I know you are against giving newbie advice, but could we ask you for one nugget?<\/p>\n
What\u2019s escrow? That\u2019s the quick no, anyways.
No, no. I\u2019m totally onboard with that. I think one of the very first thing is, what is your buy box? What is the deal to you? And that doesn\u2019t mean, what\u2019s the deal to me? What\u2019s the deal to Jimmy? What\u2019s the deal to Jessie? We\u2019re all different buy boxes at the end of the day, even though Jimmy and I were in the same market forever. But still, he\u2019ll buy stuff that I won\u2019t buy, and vice versa. There was a period of time where I bought a ton in Tacoma for years. And I\u2019d get the deals from Jimmy because he didn\u2019t want them then. But now he\u2019ll take them all, I guess. But at the same time though, it\u2019s like, \u201cWhat\u2019s your buy box?\u201d So if you\u2019re looking at a lot of deals and it\u2019s like, \u201cI don\u2019t see any good deals.\u201d And most of the time when I\u2019m talking to somebody new and is saying there\u2019s no good deals, it\u2019s because they don\u2019t know what a good deal is to them yet. They haven\u2019t really refined that buy box for themselves.
And then once you have that buy box, make sure it\u2019s realistic in whatever market you\u2019re in. Because that\u2019s the other aspect. You can have a great buy box that any of us would love, but then it might not be something that exists in the market that you\u2019re at. And additionally, if everybody\u2019s in this game at different levels, so some people are starting out with zero capital, some people have a lot of capital. At the end of the day, it\u2019s like you really only need three things to do any deal, and that\u2019s time, money, and expertise. So which one do you have? Are you the person with all the time that has no expertise and no money? Well, then you\u2019ve got to go find people that have those things and add value, or go figure out how to wholesale, or something like that.
Which is a lot harder than it looks, by the way, the wholesale. It looks like it\u2019s easy, but it\u2019s not. You have to know a lot about the business to be very good at wholesaling. But that said, maybe you have a lot of money, but you don\u2019t have the time and you don\u2019t have the expertise. Cool. Maybe you shouldn\u2019t go flip a house. Maybe you should go lend that out to somebody or partner up in JV. So just know where you\u2019re at in that game and know what a buy box is for you, and then start looking for that stuff.<\/p>\n
That\u2019s great advice. Thank you. James, you got anything for us before we go?<\/p>\n
Yeah. I think the best advice, if I was starting over again, is, everyone\u2019s taught to chase the deal. If you get the good deal, you\u2019ll make money. And flipping is a business, and you got to build it backwards, right? You don\u2019t go start selling trinkets on Amazon and just going out and buying product without understanding the cost. Build your team, then build your buy box, because your buy box is going to get built based on the resources and people you have around you. If you\u2019re new, go get your lender locked down. How much cash you need to put in that deal? What\u2019s your cost going to be on that? Go work with contractors, find out what they\u2019re good at, and then based on your resources, build your buy box and go start buying.
And so everyone, don\u2019t skip the line and go buy the deal. Go get prepared to buy the deal and buy the right one. And if you have the right people around you and you have the right systems around you, that\u2019s where you can flip in any market. And so focus on the people and the resources, not the deal right now. Once you have that, then go start buying.<\/p>\n
That\u2019s what I meant to say. All that.<\/p>\n
I concur. We\u2019ll edit it. So it sounds like you all just said that. All right. Well, thank you all so much. This has been a great conversation. We appreciate your time and expertise here. Jessie, if people want to follow you, learn more about you, where should they do that?<\/p>\n
On Instagram, at Jessie Rodriguez, J-E-S-S-I-E, for the spelling of Jessie. At Jessie Rodriguez.<\/p>\n
Nice. What about you, Tarl?<\/p>\n
At Tarl Yarber, on Instagram.<\/p>\n
All right. James, why don\u2019t you just tell us where we can find you?<\/p>\n
Best way is probably Instagram at jdaineflips, or jamesdainard.com.<\/p>\n
All right. Well, Jessie and Charles, thanks again.<\/p>\n
Thanks, guys. It was fun.<\/p>\n
Dave, thanks so much. James, thank you.<\/p>\n
On the market is created by me, Dave Meyer and Kaylinn Bennett. Produced by Kaylinn Bennett; editing by Joel Esparza and Onyx Media; research by Puja Gendal, copywriting by Nate Weintraub. And a very special thanks to the entire BiggerPockets team. The content on the show on the market are opinions only. All listeners should independently verify data points, opinions, and investment strategies.<\/p>\n