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Flipping Junkie - Danny Johnson - For Those Addicted to Flipping Houses

Flipping Junkie is a podcast for people addicted to flipping houses and real estate investing. Subscribe for weekly episodes with interviews from regular Joe house flippers that have become successful flipping houses as well as expert real estate investors sharing their best secrets on how to flip houses for big profits. Find out in detail, what is working today, to find great deals for flipping, how to properly analyze deals for flipping, renting and owner financing, determine repair costs, find contractors and manage rehab crews, what improvements to make and how to quickly sell your houses for big profits. Don’t worry, we won’t leave out the serious mistakes that you need to avoid when get starting and growing your real estate investing business. Join Danny Johnson to get the inside scoop on how to get started in this life changing business that has such huge potential to create financial freedom for you and your family.
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Flipping Junkie - Danny Johnson - For Those Addicted to Flipping Houses
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Now displaying: January, 2017
Jan 30, 2017

I’ve been hearing more and more investors talk about how they buy houses using online auctions like auction.com.  I’ve been fascinated by the strategy and was glad to get Paul Lizell on the show.

He’s buying 8 to 15 houses a month that he buys from online real estate auctions….all over the country.  How cool is that?

Paul started in Real estate in 1999, became a full time investor in the fall of 2004.  He had a background in commercial business loan underwriting and 4 years as a business development officer.  He’s been a licensed Realtor since 2006.  As a national real estate wholesaler, he does 6-12 fix and flips per year and owner finances 10 properties per year, mostly to investors.

You’d think that the ratio of houses to bid on to the number of deals he gets would be pretty crazy but he actually does pretty well.  He’s got online real estate auction thing figured out to where he bids on about 150 properties and ends up with between and 8 to 15 per month.  That’s awesome!

His favorite auction websites are:

auction.com

xome.com

hudsonandmarshall.com

realtybid.com

hubzu.com

He mentioned that hubzu is nice because you can get away with small earnest money deposits than the typical $2,500 the other auction sites require.

When looking for properties to bid on, he focuses on the smaller markets and targets in on the houses that have been listed for a long time.  The houses that are for sale for over 180 days or more are the ones that he puts bids in on.

During the episode he also gave several reasons why he prefers to close each of the deals at the title company of his choosing rather than the one preferred by the bank that owns the auction property.  The main reason was their hidden title company fees and lack of control over what is going on with the deal.

He was also kind enough to share with us his technique to get Realtors to tell us their BPO (which most don’t want to give out).  He does this by not asking for a BPO but by asking, “what would you list it at for a 30 day quick sale?” 

Brilliant!

Be aware that when buying auction houses online and then trying to wholesale them, you will not be able to assign them.  You will need to double-close…yet another reason to have a title company you know that can close the deals.

Jan 23, 2017

John Martinez, founder of Midwest Revenue Group, LLC (www.midwestrev.com)  is a sales development expert and a highly sought after consultant who brings humor, insight and real-world advice to his audiences. His practical, street-smart approach to selling has helped hundreds of investors, sales organizations, call centers, business owners, and independent professionals increase their revenue with more control, greater confidence and less effort.

Today I wanted to talk about how to handle negotiations with sellers so that we get the price we want and they feel good about the whole process.

This is an aspect of buying directly from motivated sellers that keeps a lot of people on the sidelines.

John shares with us today several tips for working with motivated sellers so that they feel good about the process and everyone gets what they want.

John’s first tip involves empathy.  You’ve got to have empathy for each and every seller and what they are going through.  Period.

Don’t hide what you’re feeling and how you feel about their situation.  Let them know that what they are going through is not easy and that you know it must be hard.

John’s second tip is to make use of price anchoring.  You’ve got to reset whatever initial price the seller is expecting to get so that your offer doesn’t hit them like a huge punch to the gut.  One way to do this is to share recent comps for nearby houses that have sold for low amounts. 

As you negotiate price, continuously lower the increment that you come up in your offer.  This will signal to the seller that you are nearing your max.  He also advises that you end with an odd number as your final as it appears to be your highest calculated offer.  Great tip!

If your max offer doesn’t do the trick, make non-financial concessions.  Offer to allow them to leave stuff they don’t want behind.

I asked John about common objections from sellers and how to handle them.  I absolutely love the approach he offered.

He doesn’t feel like there is ever any canned objection/counter that will work.  It’s always more of a situation by situation ordeal.  His approach is to find out the real reason for why they are selling and have them hash out what objections or problems they have with doing so. 

Then, understand that you can never overcome sellers’ objections.  They must overcome their own objections.  You can aid this by asking them questions that plays their objection against what they are trying to accomplish.  In this way, they will see that accomplishing the sale of the house and resolving the situation is much bigger than the smaller problem of the objection.

Jan 16, 2017

Bill Allen has been flipping for over 3 years now and has done an incredible amount of growing in that short amount of time.  He’s a full-time flight instructor for the Navy and has managed to grow a house flipping business from himself to a team running like a well-oiled machine.

I highly respect Bill and how he thinks.  He’s the type of guy that loves to think through all types of situations and coming up with solutions.  I think we’re wired the same.

In this episode, Bill shares with us how he got started.  We then go into how he analyzes deals.  His method of analysis is very similar to mine.

He uses the 70% rule of deal analysis for a quick idea of whether a deal is feasible or not and then goes into more detail.

A very important thing he mentioned was that the 70% rule works well for houses in the over $100k to about $180k range but not so much for anything outside of that.  I tend to agree.

His quick method for repair cost estimation is to use $20 per soft of the house and then add costs for major items on top of that.  Now, if a house needs major repair, this number will be low.  This is more for typical updating, not relocating walls and re-sheetrocking, etc.

Bill became a father again recently.  His son, James was born with a heart defect.  Though he’s been through a lot, James is doing well. 

You can read the story here on Bill’s blog: http://blackjackre.com/james/

Bill is an awesome father and person as he decided to set up donation page for the Children’s Heart Foundation and has pledged to match all donations.

This is incredible and I highly encourage everyone to make a donation.  There’s nothing more important than our kids and I can’t think of a better cause.

Please pledge a donation here: Bill’s Children’s Heart Foundation Donation Page: http://www.childrensheartfoundation.org/donate-now

Please be sure to leave a mention of your donation on Bill’s Facebook page so that he can match your donation: http://facebook.com/blackjackestate

Jan 9, 2017

Show notes can be found at http://flippingjunkie.com/59

Happy New Year! 2017.  Hustle

Goals. Have you set them? Go back and listen to:

Episode 18: [Foundation] 5 Steps To Setting and Actually Achieving Goals w/Marcus Maloney

 

Where the podcast is going

Finishing up series on investing

Mindset and foundation to get you prepared to be a real estate investor. 

Team Building

Funding

Marketing - 19 episodes - You need leads!

 

Coming up…

Deal Analysis

Estimating Repairs

Making offers

Follow up

Rehabbing

Selling houses

Wholesaling houses

Share more of the day to day.  My friend Erik always complains that I never talk about what I’m doing.  Everything is top secret and it drives him nuts.

What’s happening in 2017 - bringing the hustle back

House Flipping Business Goals

  • 108 deals (2/3 or more wholesale)
  • Growing team
  • Expanding online lead generation and testing
  • Melissa heading up the operation - me more consulting role

Real Estate Investor Software Business

  • Major improvements to LeadPropeller (editor improvements, custom forms, more services)
  • REImobile will be transformed to fit our operation better and focus on the needs of growing flipping businesses
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