On this episode of House Flip Masters Holly is joined by guest Andrea Arciga. Andrea is a broker from Irvine, California who has ventured into real estate investing by doing a handful of wholesales and now she is here to share with us.
Andrea shares that her most important job is being the mother to 4 children ages spanning from 13 to 24. She also shares that she has been working since the age of 16 and that she has always been in some sort of sales role during her time in the workforce. Andrea was in the tech world until shortly after September 11th when she was laid off, during her time in the tech industry Andrea shares that she taught herself a lot of graphic design and such to stay within her advertising budget at her position. With the graphic design knowledge Andrea created postcards which were used for direct mailing. Andrea shares that after she was laid off a friend, Tina Estrada, who was a Caldwell Banker franchise owner asked her to come in and to help break Andrea into the real estate market. Andrea helped to get Tina going and they got 3 deals together. Shortly after Tina’s husband offered to show Andrea how lending works. Andrea says that she started working with other agents, by helping to brand them for their loans and that is how she got her break into the real estate world. Andrea did loans for about 5 years, and after that was when the bubble burst where she continued to work on loans for another 3 or 4 years. When the market crashed, Andrea got involved and was a founding board member of a group to help teach families how to keep their homes during that terrible time when so many people were losing their homes and ending up homeless. Andrea says that while she did do some retail real estate it was not something that she loved to do but there was a time when it was her bread and butter. When the market crashed Andrea saw the error in her ways by living high on the hog and not saving money while there was money to be had. While a lot of her friends, after the crash, went out and got jobs again in the corporate world Andrea kept fighting the real estate fight because she knew that she was not going back to a corporate job. When real estate began to dry up again for Andrea she knew that she had to reinvent herself again and that is when built herself a brokerage in Belmont Shore, California. Fast forward to now Andrea says that she took the 60-day challenge with Invest Club for Women with Iris. Andrea credits Iris for teaching her how to be a real estate investor. Because of her past and having experienced losing a home Andrea decided that she wanted to be in the business of helping people who are in a time of distress or need to sell their homes quickly for whatever reason.
Andrea says that she hopes that people see from her story that it is okay to reinvent yourself time and time again when things are not going exactly as planned; and in doing so you can make a lot of money.
Today’s show features a little different formatting than what listeners are accustom to. Instead of Holly asking questions, Andrea will be asking Holly questions since Holly has a bit more experience in real estate investing. Today’s show will be somewhat of a coaching call where Andrea and listeners can gain insight from Holly’s years of real estate investing experience.
Andrea’s first question to Holly is about when Holly gets into a contract when she knows she is ready to fix and flip a home, what do the first 5 days look like for this contract; start to finish. Holly shares that first there are the non-physical stuff such as checking titles and such. On the physical aspect of the deal Holly and/or her husband will go and check the home out and see if there are things that need to be fixed, opportunities to change different areas of the structure. Holly shares that in the beginning it is common for flippers to have contractors go and look at the property and get several bids on the things that need to be changed about the property. Holly recommends hiring a professional home inspector because they will tell you what is wrong and be able to estimate how old things are on the home. After you’ve had enough experience having contractors and inspectors come into your properties Holly says that you can start doing it yourself, she recommends having a contractor come to the first 5-20 homes until you feel completely comfortable not having that person there with you.
Andrea asks about when it comes non-physical elements what are the due diligence items that Holly takes care of to make sure that everything is lined up accordingly. Holly says that when it comes to the financial aspect of the home she makes sure to have finance covered as soon as she knows that she wants a property because she wants to make sure that everything is taken care of. Holly likes to line up the money using hard money lenders and private lenders so that she can use the least amount of her own money as possible. Andrea asks how Holly keeps all of her information and files organized and Holly says that she loves technology so she uses Dropbox and Google Drive a lot to keep organized and for convenience because the files can be accessed whenever and wherever she might need them. Holly stresses the importance of making sure to check your titles because there may be a lean on a home that you might not know about; there may also be leans that might not fall off of the title which could impact the sale of the property. Andrea asks Holly if she goes to the city to check the history of the home to check difference elements of importance. Holly stresses that depending on the area of the house you might need to do this sort of thing because sometimes you might buy a home and end up having to tear something down because it wasn’t built to code.
Andrea asks after money is funded how does Holly manage the accounting part of it. Holly says that after 8 years of doing this business she mentions that she uses QuickBooks. Holly says that paying the contractor has always been a problem for her and her husband and recently Holly has come up with a way to pay contractors that works for her business. Holly and her husband were once paying contractors by the day until one day they paid $70,000 for a job that should have cost $30,000. After that mishap, Holly created a Google Sheet to share with her contractor that is listed line by line with all of the plumbing, kitchen, etc. and each week when Holly pays her contractor he needs to allocate that payment to each line item listed on the Google Sheet. This Google Sheet allows for Holly to not get a head of the contractors so that they stay motivated to finish the work because they will not be paid for the entire job before it is finished. In this week’s downloads, you will find a copy of Holly’s Google Sheet she uses for her contractors so you can see how she manages paying them.
Andrea asks Holly some great ways to get referrals for handy men or insurance for each county and area outside of the norm such as Yelp, etc. Holly says that she has used multiple avenues to find contractors. Holly shares that when they are driving around in her area if they see a work truck they will pull over and strike up a conversation with the contractor to see if they are looking to do more work or if they might know someone else that offers what Holly might be looking for. Another tip that Holly has is to go to the stores where contractors hang out at or might be picking up supplies at. Holly says that one of her favorite contractors she has they picked up at a glass store and they have been working with him for 8 years. Holly mentions that when you are talking to contractors let them know you are an investor and that you have a lot of work and have friends that will have work for them as well. Contractors will give an investor a better price than a home owner because they know investors are not as picky as a home owner might be. You can also check out Facebook for recommendations or for referral groups.
Andrea asks where Holly found her deals in the beginning and where is she finding them now and what happens when Holly finds a deal that she just doesn’t have room for on her plate what does she do with them? Holly says that she has never wholesaled anything, they fix and flip everything that they purchase. The first 100 or so houses that they got were from auctions. When hedge funds pushed the small fish out of the auction area Holly says that she started networking to find her deals. Holly says that she networks with real estate professionals as well as everyday people.
Holly and Andrea talk about insurance policies and the importance of making sure you know what policy covers which homes because you cannot put all houses on the same polices. Holly emphasizes the importance of making sure that you trust your insurance person and that they aren’t doing anything wrong with your properties. Holly highly recommends her insurance person Karen McMasters who is located in Norco, California. You can reach her by email at KarenMcMasters@DFIInsurance.com or by phone at (951) 735-5335
Holly asks Andrea to share any advice she might have for someone starting their real estate investment journey or someone thinking about getting into the business. Andrea shares that if you are a non-professional real estate person aside from the DIY shows you watch on HGTV the number one thing to do would be to change your mindset and get yourself ready for a big experience because it is very different than the real estate that you are accustom to doing. Andrea emphasizes getting educated about the change that you are about to make because you cannot make big money if you don’t get your mind ready for that. Andrea says to find a group that you trust to network with because we all work together to make things happen.
To get the Google Sheet that Holly uses for paying contractors and tracking expenses you can download it at www.HardHatHolly.com/50
If you are interested learning more from Andrea you can check out her website www.BlackLabelBrokers.com they deal with homes from Los Angeles to Mexico and all the places in-between. You can reach Andrea by text or phone call at (714) 501-9155 or you can email her at firstname.lastname@example.org