Wednesday, July 16, 2014

How House Flipping Can Increase Your Income

Yesterday evening my wife and I decided to do something out of the ordinary: go out on a Tuesday night.  It's not easy to go out any night when you have a one-year-old and a two-year-old.  We had to get our babysitter to do a double shift, go from her day job as a nanny and come watch our two children.  Jessica and I do our best to have date nights, but what a couple chooses to do during their time away from their kids is really up to them.  We mostly go out to dinner or to a movie, or if we have the time, do both.  Not yesterday evening, however.  We did something entirely new: spend four hours at the El Camino Country Club in Oceanside, CA networking with other investors and listening to speakers.

Both Jessica and I are social.  We like chatting it up with people we just met.  This is how the evening got underway at the monthly, North San Diego Real Estate Investors association: NSDREI Home
We are not members (though we should be), so how I came across this wonderful group was how most people come across things these days, Googling.  I'd known this association existed for at least two years, but never once considered attending.  And this is where most of us go wrong.  We don't do enough learning!  We don't do enough investing in our financial literacy by virtue of learning from others!  Most of what I've learned has been from experience and reading.  But let me tell you, your knowledge base grows exponentially by talking with others.  So get out of your shell, and go meet like minded people.  Go network, build connections, meet potential partners, and flip your mindset.  Did you know...the fees associated with yearly membership dues are tax deductible if they are part of your business?

After the initial time they gave us to meet with people, the meeting got underway.  We heard some valuable economic information (both local and nationwide) that would be positive and negative for the real estate industry, provided by hard money lender: Jerry Ryan of Crescent R. Financial, Inc.  Things like amount of inventory available in the San Diego area charted as a month-to-moth graphic were displayed.  We also learned about the impact of unemployment and the nebulous interest rate environment we are in currently as a nation.  Jerry's commentary was a summary of the information that is out there for all of us, but that very few of us do not care to seek.  That is the awful truth.  If only more people paid attention to what Janet Yellen is doing, or what Bernanke did before her.  Some of you may be saying, who?  And that's my point...not knowing lost you five years of opportunity to purchase assets (like real estate).  See my post: How you were screwed!

Look at us...we were smiling!  Life is great!

The Keynote speaker for the night was A & E reality TV Star and Real Estate Flipping expert, Chris Bedgood.  You may have seen his show on A & E:  Chris is on the right below:

Chris shared an incredible amount of information in two hours.  He shared a little of his life's story with us, making himself vulnerable in front of the audience.  This took guts.  But doing so allowed him to gain trust from his audience.  He also shared some of what he termed: "Bedgoodisms."  These are the principles he lives by.  Below are a few that resonated with me: (do not follow his order).

1) Make your own luck, i.e., create opportunities.
2) Network and have "Face Time" with people...since this business is really all about people.
3) Perfection can be your enemy.
4) Know your risk tolerance
5) Be a pessimist other words, be leery of things and try to anticipate what can go wrong
6) Hold yourself accountable
7) Learn to say No...especially on bad deals
8) Find a way around (be solutions oriented)
9) Share the wealth (give to others and thank your people with a little more $ for their hard work for you)

Chris also went on to describe the various real estate strategies that are out there: Prospecting or Bird Dog (finding leads and passing them on to RE investors with $ for a commission on your potential discovery), Wholesaling (Flipping the contract, not the actual property), and of course, Rehabbing or Flipping (and intricate process of re-doing a home you purchase at a low price and selling it at market value for a profit).  In 2006, I spent about $2000 on a two-day training to learn these techniques.  Chris' overview reinforced what I learned several years ago.

The benefit of attending this meeting at just $20 a pop per person was well worth it.  And as your financial literacy teacher, I strongly suggest that you do a meet-up search around your neck of the woods for an investor group.  Don't just network with people in your industry if you are an employee.  This is a sure way of reinforcing your "employee" mindset, instead of your "investor" mindset.  If you have been keeping up with my posts, the thought of escaping the rat race may have entered your mind, and this is good.  Cultivate it!  Stop making your boss rich or your company rich, putting ridiculous time and effort on something that will keep you enslaved.  Until next time, friend.

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