On this episode Holly is joined by Justin Williams. Justin has flipped over 600 houses and has most recently flipped 100 houses in a year using systems. Justin uses automation to flip his houses; he also coaches students and has programs to help people learn more about flipping on automation.
Justin got his start when he fell on some tough times and was selling satellite dishes door to door; it was then he decided that he wanted to go into real estate. When life threw Justin a few more curveballs he got into real estate and found that he was not making much money until he started selling the rental properties that he had previously bought. He made enough money to live on for a year in the rental properties that he sold. At that moment he decided to take action and get more into the real estate lifestyle.
Currently Justin operates with a small team that helps him to manage his systems business. To get the word out about his business Justin uses direct marketing. When asked about which direct marketing technique that he recommends Justin reminds us that how you market depends on your location and the capital that you have available to you. While there are many marketing option available he finds that he gets best results in marketing with direct mail and direct online marketing.
Justin is currently working on a flow chart, a choose your own adventure type chart, that will help people to decide which marketing technique is best for them given their situation. Marketing is similar to buying and selling; one size does not fit all. And if you pick something that doesn’t work for you make a change.
When it comes to flipping houses Justin offers this advice, be careful if you’re flipping and you are outside of your market. It is best to pick one area and get to know the market very well because you branch out to another market. This is because buying in other markets can increase risk. Risk is unavoidable in the real estate business but there are things that you can do to mitigate risk. Holly reminds us that you can get into real estate without risking your entire life savings by starting small and by finding financing opportunities.
Justin wants us to know that money is everywhere and if you don’t think that it is you have to work on your mind. There is always going to be someone who is willing to give you money whether that is private money, hard money, or a joint venture partner.
Justin got his start in wholesaling – getting another investor to finance your deal by buying you out – which eliminated his risk and also got him financed. After wholesaling he started doing private money, and then when he started working on higher volume flips he worked with a joint venture partner. After having a JV partner Justin started using hard money and some of his own money. He is now moving into eliminating hard money and using his own money as well as JV partner money because they do not have points and interest.
Both Holly and Justin remind us to not take money unless you have the experience and to use the same rules for risk aversion. This business is about getting your foot in the door – sometimes you have to give up some of the profit to blow the door open and to own your craft. Even if you know what you are doing you can still lose money, you need to know the risks that each investment takes. Finding someone who has experience to help you will be the best ROI you can get. Education is key to this business because people will take advantage of you if you are not educated about your decisions.
Justin offers several different learning opportunities to flip on automation. Justin and his team spend 50-60k a year in coaching education masterminds because he believes in practicing what he preaches.
The flagship program that he offers is called house flip formula and more information can be found on www.houseflippingformula.com
For serious investors Justin offers Seven Figure Flipping, which will cost $25,000, and this is a program that must be applied for and is not for everyone. More information on this program can be found on www.7figureflipping.com
Justin will also be hosting an event in San Diego, October 6th-8th called Flip Hacking Live, tickets can be bought on the website www.fliphackinglive.com
For more information about the systems that Justin and his team offer or to reach them you can get in touch at www.houseflippingHQ.com or 949-391-6527
On this episode of House Flip Masters Holly is joined by guest Jefferson Lilly. Jefferson is a mobile home park investor who currently owns 13 properties in 8 states and counting!
Jefferson says that the decade before he began his real estate investment business he worked in the high-tech business and was par of the .com world and was in it from the time of the boom to the bust. Having gone through that time Jefferson says that he became more interested in investment with the stock market and shortly after decided to diversify and take his investments into real estate. When he was looking into real estate he kept seeing mobile homes, a unique multi family niche that was showing a great return on investment and he knew he needed to get into this part of the business; although initially he was wanting to buy apartment buildings in his home of San Francisco, California. Jefferson said that it took him about 1 year to learn the mobile home real estate space and land his first deal. After his first deal Jefferson decided that this was where he wanted to be and continued to make his living in this very unique real estate space.
Holly asks Jefferson if while he was learning about mobile home real estate if he was working a corporate job or if he quit his job to pursue real estate full-time. Jefferson says that for about a year, during the time he was learning about the business, he overlapped having a corporate job and doing real estate. Jefferson says that he transitioned full-time into mobile home park investing over the course of a few years so that he could make sure that his plan was going to work out while he was still making money from his corporate job.
Holly asks Jefferson why he become interested in mobile home park investing. Jefferson says that most people are repulsed by the idea of mobile home parks so there is a not a lot of people working in this area, therefore there is less competition. Jefferson says that a lot of mobile home parks get a bad reputation because of the 1% that news and media like to showcase. Secondly, he likes this niche of real estate because it is the only area of real estate that is actually shrinking - other forms of homes and retail space, etc. is expanding. Mobile home parks have had a lot of changes in zoning against them making it impossible to build more mobile home parks - he estimates that 1% of parks get plowed over and a new strip mall is built on-top of where the park once stood. Jefferson says that while the parks are shrinking the demand to live in the parks is growing and that intersection of two elements mean that space rent goes up and in turn means more profits. Jefferson also mentions that in mobile home parks you only own the land and usually don’t own the homes and if he does he likes to put them on rent to own agreements. As a landlord he has a lower maintenance cost, all home repairs are the responsibility of the tenants which also makes for a better park because the tenant starts to become proud of their home and they will take better care of it which is why he wants tenants to own their own home. Lastly, when tenants become owners they are unlikely to move because of the cost to move the home from one area to another. If a tenant gets a job in another state or another city they are more likely to sell the mobile home and buy a new one rather than moving their existing home. Jefferson says that mobile home parks are a compelling niche because the cash flow is constant.
Holly asks Jefferson to share a story about one of his first deals with listeners and Jefferson recalls that when he had his first park he was buying homes to bring into the park and then when he went into the DMV in Oklahoma to get titles on the homes put into his name the woman at the DMV looked him over and exclaimed “you own more than one mobile home?!,” making Jefferson feel like a big shot.
Holly asks Jefferson how he ended up owning properties in 8 different states, when it comes to mobile home parks the amount of parks up for sale nationwide are much fewer than traditional homes that are up for sale which is why he has such a wide market place. With his parks spread out Holly asks if he has a park manager at each park and he says that he does because it is in his best interest to have a park manager who is close by because he is in Northern California and cannot get to the tenants and their needs in the same time that a park manager who lives in the park would be able to. Jefferson likes to pick his tenants by who has the best looking house and they will approach them about managing the park, including collecting rents, scheduling maintenance, etc. Aside from the park manager he will have a remote asset manager for instances when people abandon homes and there are bigger issues at hand that the park manager might not be able to handle.
Holly asks Jefferson to share the path of a mobile home park investor. Jefferson says that the path is the same as that of a fix and flipper and he says that Lonnie Scruggs is a great source for information on mobile home park investing. Lonnie’s book “Deals on Wheels” is a great educational resource for someone looking to be a mobile home park investor. Jefferson says that this business has a very easy onramp for people who are wanting to do this form of real estate investing.
If you are interested in learning more about mobile home park investing from Jefferson you can go to his website www.ParkStreetPartners.net where you will find valuable resources. You can also call (949) 415-4271 or you can email Brad@ParkStreetPartners.net for more information.