Competition!

FAR 140

Expected Air Date: 04/09/18

Opening

Hello everyone. Today I’m going to answer a question that has come to us hundreds of times from dozens of sources and seems like a recurring topic at every event where I speak. And the question is, “How can I start flipping some houses and buying rentals in my spare time while I keep my job.”  Now I know we’ve dealt with this topic before but it’s been awhile and we are adding new listeners all the time and besides, some information is so needed, it’s worth repeating. So in just a few minutes I’m going to deal with this topic and help you understand the big picture of what you need to make this happen. I started in this business while maintaining a demanding full-time job and continued that way for four years. I only switched to real estate investing full time because due to life circumstances that other job had come to an end.

 

The other question or comment I often get is a variation of this: If you are helping people enter this business aren’t you creating your own competitors and reducing the opportunity for everyone you train? I’m going to answer that question first right after the break. The bottom line is there are more opportunities than there are investors and this isn’t changing anytime soon. To paraphrase a famous quote about planting trees, “the best time to get into this business was 20 years ago. The next best time is today.”

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  • My upcoming speaking engagements:
    • April 21, FlipStarter Atlanta
  • Details on the website and at FlipStarterEvent.com

News:

Topic: The Competition

I believe in free enterprise, capitalism, private property rights, the rule of law, and limited government interference. I realize for a system like this to actually work, the general populace must not only agree about the rule of law but must also find common ground in agreeing about right and wrong. I also believe in Cooperative Capitalism. I do not believe that opportunity is a zero-sum game but rather that wealth can be created. There are those that believe that for anyone to prosper someone else must suffer. For anyone to win, someone else must lose. Games or competitions have one winner and all the rest are not winners. You might even quote a stupid Will Farrell movie by saying “Second Place is actually First Loser.” Although much can be learned in these competitive events, and we should relish competition for a number of reasons, it is possible for life itself to present multiple “winners.” Perhaps if you are keeping score in terms of quantifiable numbers such as “most money” there will be someone who finishes on top. But when it comes to money, once you reach a certain level, there’s almost no point in making more – there aren’t too many more ways you can spend it.

My point is this: You don’t have to make the most money in order to be a winner at life. If you make enough to take care of your family, meet your goals, maybe even have some luxuries, some toys, or some extras, you’re a winner. I’m absolutely convinced that it’s possible for me to help you achieve your dreams without taking anything away from me. I can show you how to become effective as a real estate investor and in fact, you may ultimately be better at it than me. Does that take anything away from me? Not at all. One of my stated goals each year is to help people. If I am able to help someone, that goal is met and is self-rewarding.

But let’s move away from the philosophical and talk specifics for a moment. Is it possible I could give you the skills that would put me out of business? Let’s go to the numbers. Last year 5 million homes were sold in the US and about 7% of them were flips from investors. That’s roughly 350,000. Is there room for that number to possibly increase? Well — let’s take a look at the vacant home inventory. The number of vacant homes in the US has held fairly steady in the past five years at between 15 and 18 million. I have a study from lenkiefer.com that looks into the reasons for these vacancies. When I look through the report, it appears that about 46% of all vacant homes are in a situation that would be available to investors. These categories include, “needs repairs” “extended absence” “storage” “foreclosure” “abandoned” or “other”. If you had a way to find these properties and contact the owners, surely some of them are ready to sell. There are 7 or 8 million of these homes nationwide, available to people like me. That’s more than the total number of homes sold last year. Investors accounted for about 350,000 sales across the country last year. Based on the inventory and the current level of investors there’s a 20 plus year supply of properties available RIGHT NOW. And more distressed properties and abandonments are surely on the way. It’s the nature of things.

If one investor can do a dozen houses per year and we wanted to sell the current inventory of vacant homes it would take close to 700,000 new investors.

—- I’d say there’s room for a few more, wouldn’t you?

Emails:

Questions@flippingamericaradio.com Tell us where you’re from!

  • Francine, Madison, WI, “How do you handle multiple offer situations when you are buying? It seems like every time I make an offer, they have multiple offers and want a ‘Highest and Best’ offer, usually within 24 hours.”
  • Michael, Spartanburg, SC, “Do you ever go above your numbers due to the fact that deals are so hard to come by these days? I’d rather make something than have my money sitting on the sideline.”
  • Melissa, Marion, OH, “We want to improve our deal marketing. What advice would you give us?”
  • Peter, Battle Creek, MI “How many offers do I need to make in order to buy one house per month and how much time will that take me?”