Reserve your seat here at this link.

WREIA 2017 Oct. Meeting
Monday, October 16th
Doors Open @ 6:30PM

“How To Flip A House In Any Market”

Re: 100K Wholesale Deal

Some people don’t want to, in fact, they refuse to go the traditional route and use a realtor to sell their property.

There can be a whole range of reasons why people might make this decision.

At the end of the day, many of those people try to sell the property themselves. For Sale By Owner signs are the easiest way to find them. FSBO is the industry term we use when we refer to them.

“Fizzbo’s” are usually not the easiest people to deal with. They have a reputation for wanting top dollar or beyond. Or, you might find them to be a bit eccentric. But don’t let that deter you from trying to work with them.

In fact, I’ve grown to really enjoy some eccentric people. They can remind us of just how great of a country we live in that people can be so different, come from so many backgrounds and really just enjoy life.

When I drove by this property in DC I saw a tiny little “For Sale” sign in the window.

It was impossible to read details from the road. So I pulled back around the block and got out of the car.

By being out in the city and pulling back around to get the details on the sign, I probably separated myself from 99.99% of my competition. You know them. They are the “cash buyers” that do all their work from behind a computer screen with little to no experience on the street.

Side note – I’ve grown a bit skeptical about the out of town seminar companies that want you to join their “team” after attending their free seminar? They make promises that they can teach you how to hop in front of the computer a few times and week and suddenly you’re a “cash buyer”.

The seminar companies are churning out daisy-chain wholesalers that are doing nothing more than promoting other peoples deals. They do little to no work themselves but they are creating quite the image for themselves on “Fakebook.”

Some of these real estate “promoters” are going to end up with heavy fines or even jail time for dealing real estate without a license.

Ugh.

Back to happier times…..

So here I was, downtown DC, on the side of the street talking on my cell phone to the owner.

Long story short – the owner was a reluctant landlord that really wanted to go to grad school. If he could sell the property he could pay for school.

So, we agreed to a price and got the property under contract. I thought it was going to be a great project to fix and flip.

But, once I got the property under contract I dug a little deeper and did some further research on comps in the area. I found another investor/agent friend of mine that was doing condo conversions in the area. For him, there was a higher and better use for this property.

He agreed to pay me 100k for the rights to my contract.

When I assigned my rights to that contract to him – which is done every day across all industries – he paid me 100k.

Three weeks later, closing went off without any problems. But three more things happened:

• 28 year old reluctant landlord went on to grad school – debt free.
• I collected a very nice fee for about three weeks of work. (Results not typical, even for me. These deals come along every so often and you have to have a lot of things in place to pull them off properly.)
• The buyer also converted the property to legal separate condos while he renovated the property and made a very nice profit himself.

That’s an example of “wholesaling” a property. It’s also one of the options you have when you are thinking about your first deal in real estate.

Wholesaling is relatively low risk. You don’t have to deal with any renovation issues, tenants, or permits. You won’t stay awake a night when a hurricane blows into town or we get three feet of snow from one of those famous winter storms worried that your renovation is stalled until we can safely leave the house again.

Wholesaling can be exciting, fun, and low cost. For most people, it’s a great way to stick your toe in the water to see what you think of real estate investing as a career.

Wholesaling, when you are the person with your name on the contract, is not illegal and you won’t get in trouble. When you start promoting other peoples property or contracts – for a fee and without a license – you better watch out. You’re gonna find yourself in trouble. I don’t care what those guys from YouTube or the “As seen on TV” seminar companies are telling you.

If you are looking for a little more insight into doing your first or maybe your next flip – legally – here in the DC area, you should join us at our Oct. WREIA meeting Monday, Oct. 16th in Bethesda.

Reserve your seat here.

Dozens of active and aspiring investors get together each month at our WREIA meetings to network, share resources and educate each other on tactics and practices that are working right now in the DC area.

We’ve been doing this every month since 2001.

And this Monday on Oct. 16th, we will cover so much more than wholesaling or FSBO’s.

If you want to learn how to make money flipping houses in the DC area – in 2017, ’18 and beyond – join us at WREIA on Oct. 16th.

I’ll give you a roadmap with action items you can take and put to use as soon as you leave the room. In fact, on your drive home, you might just find another one of these condo-conversion-diamonds-in-the-rough.

Enjoy yet another meeting with no sales pitch. Just tactics and info for members of our WREIA community.

If you are ready to get to work – Join me on Oct. 16th.

Reserve your seat here.

John Peterson
Founder, Washington Real Estate Investors Association

Re: R.E. Agents

“How do I find the right agent?”

If you are in the middle of searching for your first property to flip, finding the right agent can sometimes be a discouraging process.

More than likely, the “right” agent is busy with existing clients. Most of the time, working with investors with no experience or track record is left to the new agents in the office.

Welcome to reality. Your first flip isn’t going to be easy. Fast and easy is only on TV.

Which is OK. We all have to start somewhere.

Let me share with you a few things that I look for when I hire an agent to sell a property. You might be surprised to know – it has very little to do with the number of transactions.

1. Time in DC Area.
Did this agent grow up in the area, or did they just arrive from Dallas or Milwaukee due to a spouses job transfer? The DC area is very transient. I like building relationships in our business and someone who just moved into town is also likely to be moving out of town in a few years as well.

If you are serious about this business, play the long game. It will pay off down the road.

Sometimes people leave a profession and enter into real estate sales. I tend to prefer a person who has been an agent for at least 5 years and 10 is even better. But they must have been in the DC area far longer, and have a great grasp on the local “scene” when it comes to our market. Which areas are hot, which are consistent, and what part of town has gone soft – all great questions for an initial conversation. Their answers will tell you a lot about their experience.

2. Let’s talk marketing.
“Can you give me an address of one of your current listings?” This question usually cuts right to the bottom line of our discussion. While we are talking, I immediately pull up the listing on my computer or phone, like 99% of our buyers. If the photos are all hacked up, disjointed, blurry and/or the property description is boring – the conversation is over.

3. Reputation.
This is a big one for me. Referrals are a big part of my business. When I try to buy or sell a property that is out of town, I do everything I can to quickly find another investor who does a lot of business in the area and use their judgment on the best fit for an agent. Sometimes, it works in reverse. I find an agent, and ask if they have any investors who can recommend them professionally. Either way, talk to both people.

People are surprised when they first hear – even though I have a license – I hire or partner with other agents to sell property for me.

Why would that be a surprise? Every month at WREIA we talk about how important it is to spend time on what you do best. Higher-end, luxury DC condos are not my specialty when it comes to sales. So, when we have those projects, I hire agents who specialize in luxury condo sales.

When we purchase homes in other niches outside of my normal “bread and butter” DMV single family or townhouse flip, I immediately start looking for the pro in that out-of-town or niche market. It’s worth every penny to pay for professionals in those tight niches.

I use my license as a default. If no one is clamoring for my business, it’s easy enough to put together a listing for the property. However, sometimes an agent is hungry, wants the listing, and meets the three criteria above. In those instances, we usually pass off the listing to that agent so I can focus on what I really enjoy doing – finding the next project.

You should do the same.

Focus.

Don’t go into this process thinking you are going to do everything. It will take too long and you can kiss your profits goodbye.

For instance, should you paint the house? Is that what you do best? Or did you overpay for the property and now you HAVE TO paint the house yourself because you don’t have the budget to pay professional painters?

Plumbing, electrical, windows, roof repairs….. The list is endless. It doesn’t start or stop with the agent. The agent is simply one more person that you should hire to specialize in their craft.

If you are looking for a little more insight into doing your first or maybe your next flip here in the DC area, you should join us at our Oct. WREIA meeting Monday, Oct. 16th in Bethesda.

Reserve your seat here.

Dozens of active and aspiring investors get together each month at our WREIA meetings to network, share resources and educate each other on tactics and practices that are working right now in the DC area.

We’ve been doing this every month since 2001.

And on Oct. 16th, we will cover so much more…..

If you want to learn how to make money flipping houses in the DC area – in 2017, ’18 and beyond – join us at WREIA on Oct. 16th.

I’ll give you a roadmap with action items you can take and put to use as soon as you leave the room.

Enjoy yet another meeting with no sales pitch. Just tactics and info for members of our WREIA community.

If you are ready to get to work – Join me on Oct. 16th.

Reserve your seat here.

John Peterson
Founder, Washington Real Estate Investors Association

Re: Advice For Your First Flip

If you live in the real world and want to be honest with yourself, it’s safe to say that on your first flip, you’re probably going to make a few mistakes.

In the next 60 seconds, let’s reduce that number of mistakes even more. And hopefully, tuck a few extra dollars into your bottom line.

Here is the number one thing that you have to get right if you are flipping a house here in the DC metro area:

The Price.

Ok, this is a little tricky, because there are actually two prices you have to get right.

There are two sides of this “Price” coin:

The price you pay for the house and the price at which you sell the house.

If you get either one wrong, there can be huge consequences. Spend too much when you buy it, or list it for too little and you won’t make a profit.

However, if you have a rising market and keep your mistakes to a minimum, you could actually walk away from closing with more money than you expect. (Lot’s of people think they are brilliant renovators, but in the last few years they have been the lucky recipient of a rising market.)

Back to these two prices. They can be tricky.

There are a lot of factors that go into flipping a property, but I’m going to assume you can get estimates on the paint, carpet and cabinets. So let’s get a little beyond those basics.

Beyond the cost of the materials and labor to have the proper repairs, where are the hidden expenses a lot of first-time flippers forget?

Let’s cover the top three items first time flippers forget that really take a bite out of expected profits.

1. Taxes.
Here in DC, we live in a high tax area. Period. When you buy and sell a property the transfer taxes and property taxes can eat into as much as 4,5 or even 6 percent of the transaction. Maybe MORE if you take a long time to turn the property around. On a simple 200k property, these taxes might add up to as much as $8, $10 or even $12 thousand dollars.

2. Insurance and Utilities
You have to insure the property, especially when you turn on electric and water. Even a small electrical fire or a cracked water pipe can cost hundreds or thousands of dollars. And we are not dealing with homeowner insurance rates when we flip property. The insurance companies are going to charge more than a homeowner because they know the house will be vacant a large amount of the time you will own it. Additional risk for them means higher rates for you.

3. Sales and Marketing
Sales and Marketing is one expense most people assume an agent will take care of. However, if you can add to the sales process by assisting in catered open houses or additional mailings to prospective buyers, you might be surprised how quickly you can get these properties sold. It’s a team effort, and when you offer to chip in for additional TARGETED marketing your sales team will be grateful.

These three items should always be factored into the price of buying and selling a property in the DC metro area. Especially the taxes. So many first timers are surprised how much it costs just to DO the transaction.

There are a few more tricky or hidden expenses we will quickly cover at our next WREIA meeting on Oct. 16th. Being aware of them will help put more money in your pocket at closing.

And on Oct. 16th, we will cover so much more…..

If you want to learn how to make money flipping houses in the DC area – in 2017, ’18 and beyond – join us at WREIA on Oct. 16th.

I’ll give you a roadmap with action items you can take and put to use as soon as you leave the room.

If you are ready to get to work – Join me on Oct. 16th.

WREIA 2017 Oct. Meeting
Monday, October 16th
Doors Open @ 6:30PM
“How To Flip A House In Any Market”

Reserve your seat by clicking here.

John Peterson
Founder, Washington REIA Network

Re: Donald Trump and Russell Simmons

Russell Simmons wrote the book “Do You! 12 Laws to Access the Power In You to Achieve Happiness and Success.”

In the foreword to the book Donald Trump writes this:

“But while I could talk about Russell’s entrepreneurial acumen all day, this book is about so much more than just making money. That’s because Russell understands that the true definition of success can never be measured in dollars and cents. This concept might not seem to be something I would normally promote, but I couldn’t agree with it more. In fact, I’ve always said that while success is good, success with significance is even better. And I think that you’ll find that the kind of success that Russell is promoting in this book is very, very significant indeed. “

Donald immediately goes on to say this:

“That’s because it’s a success that’s based on sharing instead of hoarding. On staying open to new ideas, even ones that might seem strange at first. On making the right choices, even when they don’t seem to be in your best interests. It’s the kind of success that we should all strive for.”

Now turn to the first chapter of Russell’s book and what does he start with?

Vision.

In my last post for you (the one about Dr. Phil) I talked about taking action.

I appreciate people who take action. There comes a time in business when it’s simply time to stop talking and start walking.

But here’s the thing. Some people start walking, and they don’t know where they are going!

That’s horribly dangerous. You waste our most treasured resource when you start off without the destination in mind. TIME.

But it doesn’t stop with you. You waste the time of people around you when you don’t know – with certainty – where you are going.

I don’t want you to do that to yourself or anyone you plan on working with.

Russell Simmons is a legend in the hip-hop community as well as the business community. He started his company Phat Pharm and sold it for $120 million.

Back to Vision –  without even leaving the first chapter of his book, you will find Russell saying this about hip-hop:

“Hip-hop is all about believing in your vision. In its original form, hip-hop was about one person grabbing a microphone and telling the world how great he or she was. It was about a poor kid who probably didn’t have much creating an all-powerful vision of himself in his mind and then sharing it with his friends, his block, his borough, his city, and then ultimately the world.”

In our business, we need to have a vision as well.

We need to figure out how we are going to help people and make a profit at the same time.

Are you going to focus on people who have lost control of their house and that house now needs major repairs?

Or are you going to focus on people who have lost control of their situations, and might be going through a hard time on a personal level, like a divorce, job loss, or loss of a family member?

I’m simply going to suggest here that if you focus on the houses you will find profits and success. But if you focus on the people you will find success with significance – the kind Donald Trump and Russell Simmons talk about.

At our next WREIA meeting I will show you steps to take that will let you flip a house in any market.

You should join us.

If you want to learn how to make money flipping houses in the DC area – in 2017, ’18 and beyond – join us at WREIA on Oct. 16th.

I’ll give you a roadmap with action items you can take and put to use as soon as you leave the room.

If you are ready to get to work – Join me on Oct. 16th.

Reserve your seat by clicking here.

John Peterson

What can Dr. Phil teach us about real estate?

Re: How To Flip A House In Any Market

I’ve met with a few “new” people recently who tell me they “want” to start investing in real estate.

The sad thing is this is so common these days. SO many people want to get started, but just never take any real concrete action.

Let me tell you – watching a few HGTV shows and following it up with a couple free Youtube videos is not going to turn you into an active real estate investor, let alone make you financially independent by next Friday.

The reality is that so many people are having trouble because they don’t know the next steps to take to 1. find a house and 2. get it under contract at a price that will allow them to make a profit.

You don’t need a real estate license or a MBA from Harvard to do this stuff. It’s not rocket science or brain surgery.

In fact, it’s simple – but it does require work.

Dr. Phil has a quote that is just spot on:

“The world couldn’t care less about thoughts without actions.”

No one cares if you “want” to be a real estate investor.

Nobody cares if you are getting ready to retire next year and don’t have 10k in savings.

No one is going out of their way to help the person that simply wants to sit at home in front of a computer, mouth wide open, waiting for inspiration to suddenly fills their bank account with profits.

What I DO care about is the person that WANTS TO and then follows it up by TAKING ACTION.

Specifically – there are steps that show me if someone is serious about this business. They provide EVIDENCE if someone is serious or just a wanter. I’m going to lay those steps out for you at our next meeting.

You should join us.

If you want to learn how to make money flipping houses in the DC area – in 2017, ’18 and beyond – join us at WREIA on Oct. 16th.

I’ll give you a roadmap with action items you can take and put to use as soon as you leave the room.

If you are ready to get to work – Join me on Oct. 16th.

Reserve your seat here.

John