Getting started in real estate is always a huge jump compared to a normal, 9-5 career. There are a lot of hurdles along the way and the fear of losing money never really goes away until you’ve been in the business long enough. These are the fears that prevent Logan and Katy Ross, a young couple in Benton, Kentucky, from becoming full-fledged investors.
Today, Logan and Katy join me today to learn tips about financing your business and how to almost always guarantee profitability. I explain why private lending is better than taking a loan and the formula my team and I use in estimating cost. I discuss reasons why wholesaling is best when it comes to your first few projects and how to dominate the market they’re in. I also share some tips on how to make yourself attractive to private lenders as well as how to deal with family members as business partners.
“It doesn’t matter how profitable a project could be if you’re not capable of getting to the finish line.” – Don Costa
On Today’s Episode of Flip Talk:
- Logan and Katy Ross’ real estate background and why they became interested in this industry.
- Why private lending is superior to hard money.
- How to show private lenders you can be trusted with their money.
- A standard formula for estimating costs of rehab.
- Running the same or multiple crews for a variety of projects.
- The number of deals per year that determines your entity for taxes.
- The targeted minimum profit return per property.
- What I recommend for slower, more rural markets.
Don’s Tips for Getting into Real Estate Investing:
- There’s a fine line between acting as an agent or broker and as a wholesaler. As a wholesaler, you are marketing the contract only.
- Whether it’s family or a stranger, you need to treat lending as a business transaction.
- Even if your deal didn’t give you a profit, you still owe the lender 100% of their money.
- If you have a flipping business, you don’t qualify for capital gains tax. It becomes ordinary income.
- Wholesaling should be the first few projects because it’s the fastest way to a check.
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