Podcasts Business Flipping America The Next Steps

The Next Steps

Published: May 18, 2018, 3:57 p.m.

b'FAR 145 Expected Air Date: 04/23/18

Opening

Hello everyone. What a great day we had Saturday at FlipStarter Atlanta! It was my honor to share some of my best secrets for Fixing and Flipping Houses to the group there and welcome new members into the Flipping America Mentoring Program. If you couldn\\u2019t make it we missed you and I want you to know that later today I\\u2019m going to put up a link on our home page that will give you the opportunity to buy the FlipStarter workshop on video. So head over to FlippingAmericaNetwork.com and check it out. Speaking of the Mentoring Program, our next Three Day training camp is coming up May 9-11 and it\\u2019s not too late for you to join us. However, since our program is invitation-only, you have to jump through a couple of hoops in order to receive that invitation. Hey it\\u2019s not like getting into law school or anything but we just need to talk. You can schedule a call with me by going to your web browser and typing this in exactly: bit.ly/TalktoRoger When you do that you\\u2019ll have access to my scheduler and you can pick a time. Then you will be given instructions for accessing a conference call you\\u2019ll need to dial into at the appointed time. It doesn\\u2019t matter to me where you are. I look forward to helping you in any way that I can. VIP lunches at FlipStarter - Lunch with me every Wednesday at Baraonda.

How to Reach us

www.flippingamericanetwork.com Facebook.com/flippingamericamedia Twitter and Instagram @FlippingAmerica YouTube: bit.ly/FlippingAmericaOnYouTube Linkedin: bit.ly/FlippingAmericaOnLinkedIn Call our National Comment Line: 404-369-1018, ext 1. Leave your message or your question.

Announcements:

  • My upcoming speaking engagements:
    • Tonight I\\u2019m at Atlanta REIA West at 6:30, Cherokee Cattle Company in Marietta. .
  • Details on the website and at FlipStarterEvent.com

News!

Topic - The Next Level - Passive Income

We started last show talking about Hitting Your Stride. Today I want to talk about what you do when you are operating Active Income business at peak efficiency and are throwing off excess cash. You will want to consult your tax professional and if you don\\u2019t have one, it\\u2019s time to get one. What we are talking about today is creating Passive Income and heading toward true financial freedom. You are not necessarily free when you are making really good -- or even great money in your business. Because when you stop operating that business - even to take a week or two vacation, your pipeline feels the effect and depending on your product cycle - in this business 4-6 months -- your income is going to take a hit. If you need this money to pay your bills and maintain your lifestyle, then you will feel the pinch and suffer. No you have financial freedom when your passive income pays the bills and your lifestyle can continue whether you are working or not. When you reach this point you may conclude that you no longer need disability insurance, although you may want to continue coverage for long-term illness or injury -- this would be a question for your insurance professional and made in consideration of your health and lifestyle. Motorcycle riding may indicate a higher need for various health care additives. So how will we get to financial freedom? Let\\u2019s consider a couple of approaches that I will have time only to outline, but these are topics we cover in much more depth in our Passive Income \\xa0\\xa0\\xa0Mastery course.
  1. Free and Clear Single Family rentals. Flip 3 or 4, buy one.
    1. Buy small, brick or low maint. Exterior.
    2. Consider area, stability, upside.
    3. Try to buy where there are good schools.
    4. Locate near you for better management.
    5. Educate yourself on how to manage or outsource.
    6. After you have 10, consider outsourcing management anyway.
    7. The only truly cash-flowing single family rentals are free and clear.
  2. Borrow money for SFR
    1. Know the loan constant. Cost of payments (1 year) / loan amount.
    2. Know your expense ratio and calculate NOI.
    3. The spread is your cash flow.
    4. Most people fail at this. Either paid too much or poorly structured debt - the property never actually cash flows.
    5. It could be OK if you have plenty of cash to cover AND you are speculating on greater than market appreciation.
  3. Buy small multi-family. Up to 5 doors
    1. Finance like SFR
    2. Cash flow better, typically.
    3. Higher turnover anyway, so upside matters a bit less. Usually single or newly married, no kids. Schools not much of an issue.
    4. Convenience to employer is more important.
    5. Solid employment opportunities
    6. Stable or growing population.
  4. Buy apartments
    1. Distressed props, force appreciation, re-fi.
    2. Use syndication to do A.
  5. Loan Money
    1. Flip loans
      1. Rate and Term
      2. Equity Partnerships
    2. Rental loans
      1. Long term
      2. Steady income
    3. Watch your loan to value - keep it below 70%.
    4. Borrower pays for appraisal when needed.
    5. Borrower provides proof of insurances, pays taxes, etc. and provides proof.
    6. An entire section of our Passive Income Mastery Course.

Motivational Thoughts for the day

  • \\u201cNever Give Up, Never Surrender\\u201d. -Jason Nesbitt, Captain, Galaxy Quest.

Comment Line calls and Questions

Call 404-369-1018, press 1 and leave your message!

Emails:

Questions@flippingamericaradio.com Tell us where you\\u2019re from!
  • Carl, Oconomowoc, WI, \\u201cDo you still use other people\\u2019s money in your own flips? If so, why? Wouldn\\u2019t it be better to just use your own cash at this point?\\u201d
  • Cindy, Westchester, PA, \\u201cI heard you talking about the advantage of leverage in real estate deals. How do you reconcile this with Dave Ramsay\\u2019s teaching that we should never borrow money - ever - especially for real estate investments?\\u201d
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