T I P S + T A K E - A W A Y S

REALLYFLIP

Episode One: YA GOTTA KEEP THE

MONEY MOVING

The ReallyFlip team is passionate about removing the obstacles to successful real estate investing, so we designed these worksheets for every episode of ReallyFlip so you get the best take-aways to use in your own house �ipping endeavors. Every episode was created to show you what it really takes to grow and run and successful real estate

investing business. We’ve included a recap of key segments, quotes from the show and thought starters to help you apply the lessons learned from real, boots-on-the ground investors. This is real-world investing, so after you view each episode, take a minute to go over the worksheet, jot down your own thoughts, challenges and actions steps that

can start or grow your own real estate investing business.

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Hosted by Ross Hamilton & Steve Dutton

LEARN EXACTLY HOW TO:

+ Find the best investment properties not available to the public

+ Figure out the numbers. The value, rehab costs, and more

+ Fund your deals using OPM (Like Steve)

+ Fix it so it sells fast

And for those of you Allergic to hammers!!!

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Learn How to Flip Houses the Right Way... Fast, With Little Risk and Big Pro�ts.

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In this introductory episode, experienced house �ipper, Steve and Connected Investors CEO, Ross visit several completed �ip houses and talk about the time & �nancial commitments, risks and rewards, the missteps and the successes, and maximizing opportunities.

YOUR BUSINESS MODEL

“I hired a friend of mine and he and I worked six days a week over there and we were the chief cook and bottle washer, man. We did pretty much everything. I didn’t hire much, I didn’t have any money. I ended up doing, you know, two or three houses a year. Now I am doing 12 to 18 houses a year.”

Steve starting out doing 2-3 houses a year then ultimately grew his business to 12-15 houses a year. Every investor’s business model is unique in some form or fashion - typically driven by time, money, or resources.

Think about your business aspirations and consider if any of these business models �t your goals.

THE LOW VOLUME, HIGH NET INVESTOR

One of ReallyFlip’s producers follows this model. She and her partner are skilled DIYers - so they seek out what they call “home runs” - the houses that will net them at least $50-60k plus each. Since they’re mostly hands-on with repairs, they’re limited by time in the number of houses they can turn each year - but each one has a big back end return. This model is easy entry if you have the skills to DIY your properties - and the time to devote to the work. There’s risk involved - if one deal goes bad, you may only have one or two others in a year’s time to recoup losses.

THE HIGHER VOLUME, LOWER NET INVESTOR

This closely resembles Steve’s business model. He has multiple projects going at any given time, and has his own crews working at each property, and spends more of his time managing crews than swinging a hammer - though he gets his hands dirty on regular basis. With more projects in the works, it’s okay if the net is lower than the Low Volume, High Net Investor. This business model takes some ramp up time - unless you’re already in the home renovation business or a builder with crews on tap. This model does spread the risk across multiple properties - but also requires the investor to have lots of balls in the air and have excellent project management skills (along with a good source of capital to fund multiple ongoing projects)

THE PHONE CALL FLIPPER

This house �ipper doesn’t DIY and doesn’t have their own crew - they’re skilled at calling in the troops to do the repairs. The phone call �ipper relies on strong relationships with reliable contractors - as he or she may not be onsite daily. This business model is limited by the ability to �nd and manage quality contractors to complete the work on time and on budget. It’s fairly easy entry using this model, but does require some working knowledge of repairs and costs and a reliable source of capital since phone call �ippers often have more than one project in the works. This model also works well for the investor with out-of-town projects since their daily presence isn’t necessary.

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When thinking about your own access to TIME, CAPITAL and RENOVATIONS, which business model best �ts your ideal? Why will one work better than the other to meet your needs and desires?

THE REALITIES

”I probably spent three or four hours every single day managing the property among other properties that I’ve got going on at any given time and that was four months’ worth. So it took about four months to rehab it and just managing it was probably half a day’s work every day. So you know, 20 hours a week, about 240 hours.”

“Time is of the essence” is one of the most common phrases in real estate investing. And when it comes to making money �ipping houses, the amount of time you have to devote to �nding, �guring, funding, �xing and �ipping properties helps de�ne your business and the ability to “wash, rinse and repeat.”

A lot of aspiring house �ippers don’t have the experience to recognize everything that goes into pro�tably taking a �xer upper to the retail market for resale. As you start (or continue) building your business, identify the resources you have - or can access - in each of the phases of a residential house �ip

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FINDING PROPERTIES - what tools do you have to help you �nd good properties for �ipping? The Connected Investors Marketplace is one. Connected Investors Cherry Pick is another. List at least THREE more (agents, online, local network, other?)

1.____________________________________________________________________________

2.____________________________________________________________________________

3.____________________________________________________________________________

FIGURING THE NUMBERS - one of the most important aspects of this business is knowing and sticking to the numbers. The Connected Investors BPO app puts real world, local valuations on properties nationwide. What other resources can you tap into to evaluate the numbers on a property?

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FUNDING YOUR DEALS - there are a lot of different ways to fund a �x and �ip property. There are private money lenders in your own network - but you have to tap into them. What sources of funding can you identify?

1. CiX.com (the Connected Investors Lending Network)

2. Self-directed IRA (Look into this if you or someone you know has a retirement account)

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4. ___________________________________________________________________________

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FIXING - Renovations get costly. Having the right plan and the right team to get the project done is critical. Connected Investors offers members two Apps to help house �ippers make even more money. The Contractor App puts quality contractors into your network. The Community Buying Group gives Ci member investors signi�cant discounts at vendors nationwide.

What resources can you tap into to get the job done and improve the bottom line?

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FLIPPING - this is where the rubber hits the road and your property goes to market. How will you market your property to your end buyer? If you haven’t thought of your own marketing, you should. Connected Investors DealinSite web system is a comprehensive website that investors use for buying, selling and renting investment real estate. What other strategies can you employ to get your property sold fast?

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THE RELATIONSHIPS

Ross: “How did you fund it? “

Steve: “Private lending. I’ve got relationships with several, I call them business partners. If you had to be technical, hard money lenders. They are like friends of mine and I’ve done a ton of business with these guys. The money is expensive but I’ve got such a solid relationship that I can be like, “Hey buddy, you know, I need $135,000 in two weeks right?”

No matter business model or level of experience, every successful house �ipper nurtures and manages a good number of relationships in order to keep the ball rolling. Steve mentioned his relationship with his private money lenders and how those relationships are bene�cial to his business. Clearly, he manages a number of relationships - from funding partners to renovation helpers and more.

What are the key relationships you need to develop, nurture and further to take your business to the next level?

DUE DILIGENCE AND YOUR REPUTATION

“You have to do what you say you are going to do with your sellers, your buyers, your lenders because the minute you fall through on a promise to any of them, you’ve just damaged your business model.”

Steve, as all smart business people should, takes his obligations very seriously. It goes back to developing and nurturing relationships. One of the keys to every aspect of house �ipping is due diligence - and not letting enthusiasm and inexperience drive your decisions.

A Private Money Lender _______________________________________________________

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A House in a Marginal Neighborhood____________________________________________

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A Contractor__________________________________________________________________

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A Property located in a Flood Zone ______________________________________________

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Materials Vendor ____________________________________________________________

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Real Estate Agent/Broker ______________________________________________________

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A home built before 1950 ______________________________________________________

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A Seller ______________________________________________________________________

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A Buyer ______________________________________________________________________

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Take a minute to challenge yourself. We’ve listed relationships and tasks that are the keys to longevity for any house �ipper. Jot down the vetting process you might undertake as you approach a house �ipping project for each of these. What do you need to know? What are potential pitfalls?

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AVOIDING MISTAKES

You know, in real estate, �ipping houses, I think what often gets overlooked is the extreme risk that can be involved. And as much as I hate to admit failure, I’ve lost money on some deals and we just happened to be at a property where I lost the most amount of money. I lost as much on this one deal as a lot of people make in a whole year. I really was in very serious risk of becoming a statistic. Almost went out of business.”

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2. ___________________________________________________________________________

3. ___________________________________________________________________________

4. ___________________________________________________________________________

5. ___________________________________________________________________________

What are the lessons learned?

Even though Steve is a very successful real estate investor, he’s not immune to mistakes. During this segment of the show, he talks about the challenges of one deal in particular - and is able to point to where he made his mistakes. He recovered and took some valuable lessons with him. Take a look at the segment and see if you can list the key lessons learned. We counted at least �ve.