Month: May 2026

Lesson from Today’s Hunt

We have a pool in our backyard and two ducks often hang out here. We also have a pool fence to keep out small children.

Today, before writing this email, I woke up and let Charlie, my English springer, into the backyard as usual. By nature, he is a hunting breed. Ducks especially.

As I followed him out I noticed the confrontation – he was chasing and attacking one of the two ducks who made the error of being on the wrong side of the pool fence.

So it began, me chasing Charlie, Charlie chasing the ducks. Each time I separated Charlie from the duck I hoped the duck would fly away.

Instead, the duck tried to lunge and fly toward the water, bouncing off of the pool fence with each attempt-and right back into the danger zone of the dog.

Luckily for the now-injured duck, Charlie did listen to my command to go back inside.

Charlie watched from inside as I guided the now-flightless duck and it’s mate out of our backyard on foot. Both ducks survived the encounter.

The Lesson – What Always Worked, May be the Thing that Bankrupts You

The first instinct of both ducks when Charlie ran outside was to try and get to the water. Safety would have been better sought by simply taking flight and getting above the danger.

As I reflected on this error in judgement, I realize that the ducks likely jump off into water all the time to avoid the occasional coyote or rattle snake (both live in the area near my home). That was the thing they’ve prob done 100 times to easy success (survival), but almost cost them their life.

But the Bankruptcy?? Let me explain

Right now many large apartment owners are teetering on bankruptcy, praying for interest rates to drop back to maybe 4% so all of the deals they’re currently stuck in will be able to refinance.

It was this one action, repeated 100 times with success, which placed these operators in their current difficult situation:

Buy a building, raise rents, refinance and pull out as much cash as possible to buy the next building. Repeat. Same strategy for BRRR investors.

The same thing that made them rich may actually make them poor. Or certainly a lot less rich.

Office building owners have experienced the same thing. And many other asset classes over the years.

In 2008, when values collapsed, it was the 10-100 house single family rental operator who faced the large evaporation of their wealth. Along with many developers.

What About House Flippers? & Brokers? What is the action You’ve Done with Success 100 times that might Bankrupt YOU?

It might be how you’re using the MLS to evaluate your After Repair Value & analyze the market.

For the past 15 years, we’ve enjoyed a mostly stable and increasing real estate market. This type of market will forgive mistakes around inaccurate forecasting of the finished value, the resale price, of your fix & flip deal.

If you think a house is worth $200K, and you’re wrong and it’s only worth $180K or $190K on the day of purchase, you might be saved in an increasing market. If that market increases at 5% per year, it might actually be worth $200K by the time your renovation is done.

In a declining market by 5% per year, the opposite can occur. You think the house is worth $200K and it’s only worth $180K or $190K on the day of purchase. Going the opposite direction, that house might be worth $180K or $170K by the time it’s complete.

Be aware the the way you analyze a market MUST change if your market changes.

How to Beat the Market

If you’re flipping houses, the 5% change in price is not a major factor for two reasons:

1. Superior Product – If you’ve done a nice job, buyers will pay more for a better product. Renovated houses usually hold their value long enough for you to exit before downward trends affect pricing. If your product is not superior, and you’ve done a marginal job on the reno, you might get hurt.
2. Speed of Sale – Get in & out of every renovation as fast as possible. If you can enter & exit a flip in 6 months or less, the risk of a downward trend in the market is greatly reduced.

In conclusion, what is that one thing you’ve done over & over, and it’s worked, that might stop working?  Being aware of this, looking for this, might help you spot the market change in advance and allow you to manuever your business to remain successful. Lest we need to take a moment of silence to honor & remember past success….

A good book worth reading on this subject is Who Moved My Cheese?

Here are 32 properties for sale, many work for fix & flip 

What is the #1 Requirement of a Deal?

Most people probably jump to price. I know I certainly did for the first 10 years of my career. However, here is the absolutely, most important requirement for any Deal:

The Deal MUST Go to Closing

I have a friend who bought a apartment complex for something like $70M just before Covid. They accepted a contract for $150M in 2022 right as rates were jumping. Imagine, almost $75M in just 2-3 years. Best Deal Possible?

Because the buyer’s interest rates doubled right before closing, they  renegotiated and could close at $110M, which my friend boldly denied believing better offers would appear. Those offers never materialized, and he’d sell you the property at break even today if you are willing to buy it. The deal never went to closing, making the price completely irrelevant.

Always Underwrite Any Offer for Certainty of Closing 

My first question when considering an offer on the table: Will this buyer actually close on this offer? Or will they renegotiate they day before closing? or simply cancel?

If the buyer fails, will the market be as good as it is right now? That is NOT always guaranteed. In residential real estate, the Spring & early Summer markets net 5-10% more price than any other time of year. You may only have one shot to get that right, or wait one more year and try again.

In commercial real estate the market cycles measure in decades. Retail real estate is doing well at the moment, but was soft from 2010-2021 or so. Office is currently soft. Apartments are in decline-as rents are flat, or declining throughout the country.

How to Beat the Market

1. Don’t Be Greedy – Trying to set a record and extract every last dollar from the market can often be a trap. I’m sure you would agree with my buddy who denied that $110M renegotiation-$35M or so in profit would have been WAY better than the situation he is currently working himself out of – and it’s been a tough 5 years since this occurred.
2. Go FAST!! When it’s time to sell a property, I opt for speed where possible. There is a balance to this-I’m not suggesting simply fire selling.  I prefer getting to closing quickly rather than risking market changes occurring which kills my current deal. Remember how many deals cancelled when Covid hit? Or maybe in 2008 when the banks collapsed?

If you have a deal which needs a certain, quick, guaranteed sale, I’m happy to be that buyer. I buy value add residential & commercial real estate. We require the ability to push the value and create a profit by capital improvement and/or raising rents. Reply to this email if you have something like this.

Here are 35 properties for sale, many work for fix & flip 

How to Find Contractors for Flipping Houses

What is it they say about real estate? Location, location, location.,

Real estate is location bound. While you might be able to move the building to another location, you cannot “move” the property itself. Same holds true for contractors. Both are location bound.

Contractors are one of the biggest risks in flipping houses. You need to be able to buy their service cheap enough to make a profit, yet they have to do the job nice enough for you to sell the property. It’s a tall order.

To complicate matters, you need the job done on a tight schedule. Good contractors are often booked out months in advance & charge prices too high for us flippers to make a fair profit.

The Ideal Contractor

The ideal contractor is already working for other investors in the neighborhood your flip is located. If other flippers can make the deal work, their pricing is likely to be geared toward investors, not retail homeowners – who often pay more.

3 Sources of Contractors

1. Retail ARV Flipped Houses
2. Cash Sales to Investors
3. Referrals from Other Investors

Retail ARV Flipped Houses – Go on Zillow and search your area for houses that were recently sold in “renovation quality”. Call the agent who represented the seller (found on Zillow) and ask them if they have contractors who could work on your deal. You may also consider using them for the exit sale – as they know the market and may already have buyers who lost out on the last deal.

This is ideal when you’re working in a brand new market, especially if you’re only going to do that one deal there. Great for out of state flips.

Cash Sales to Investors – Using either the MLS, or Zillow if you don’t have access, you can look at the lowest price houses sold in the area. Review the pics to see if they are in rough shape. Here-you want the most recently closed deals.

Then go drive during work hours to see if contractors are working on the house. This is ideal because you can observe the way they keep the job. Are they working at 4:00? Or already gone? Do they keep the jobsite neat?? Or is it a wreck? When you approach them, are they rude? Or helpful? You can judge quickly whether you’d consider hiring them.

This is ideal when you’re flipping houses in an area you can drive, or a market where you plan to build momentum & contacts to do many deals over the course of several years.

Referrals from Other Investors – Go to real estate networking events and ask around to other investors who flip houses. These are the perfect folks to ask for referrals. To this day, we still use many of the same contractors who were provided by this method way back in 2006. Great guys.

Again, sourcing contractors this way is ideal when you’re flipping houses in an area you can drive, or a market where you plan to build momentum & contacts to do many deals over the course of several years.

Here are 39 properties for sale, many work for fix & flip 

How to Win Deals Over Competition

First things first, don’t run away from deals with other buyers, other offers, or even an asking price that feels outside of the range of your “deal zone” (the price at which you’d close the deal).

One thing I’ve observed (and been guilty of myself) post Covid 2020 real estate market: more sellers in this market are greedily trying to “shoot for the moon” when they market their property.  To be fair, some get lucky and get that high price. Most end up doing price drops and selling at a reasonable market price.

Lesson 1-If that deal catches your eye, make the offer which works for you.

Constructing the Strongest Offer

In the residential world there are 4 main Buyer Types in order of strength as measured by the offers ability to obtain a winning deal from a below ask price offer:

1. Cash Buyers
2. Hard Money Buyers
3. Conventional Mortgage Buyers
4. FHA Buyers

I’ve left off “Seller Financing” offers because they are usually difficult offers to get accepted by sellers – especially because we are focusing on offers which are accepted at discount to asking price.

Terms to include if you’re aiming to be the Strongest Offer

–Obviously, a high price would be helpful in every scenario below, so it is left off of the list. Know what you are willing and able to pay & present that amount in your offer.

Strong Cash Buyers 

• Large Earnest Money Deposit (EMD). 10% of the Purchase Price or More
• No Inspection Period, No Due Diligence Period, No Attorney Review
• Quick & Flexible Closing.
• This type of offer often gets accepted over higher offers with more risk of re-negotiation or cancellation. No one walks from 10% Earnest Money Deposit

Cash Offers are the Strongest because the Buyer who is supplying the cash to close is the actual decision maker.

*This is how I buy property personally. My offer is rarely going to be the highest, but it is THE MOST CERTAIN offer to ACTUALLY CLOSE.

Strong Hard Money Buyers 

• Large Earnest Money Deposit. 10% of the Purchase Price or More
• No Inspection Period, No Due Diligence Period, No Attorney Review

Hard Money loans are risky because the Hard Money lender who is supplying most of the cash is the actual decision maker, NOT the buyer. Large, non refundable EMD can go a long way in providing CERTAINTY of closing to the seller and earning the deal.

Strong Conventional Mortgage Buyers

• Large Earnest Money Deposit. 10% of the Purchase Price or More
• No Inspection Period, No Due Diligence Period, No Attorney Review
• Waive the Appraisal and/or Mortgage Contingency
• Buyer willing to complete any Lender required repairs

Conventional Mortgages are risky because the lender who is supplying most of the cash is the actual decision maker, NOT the buyer.

Large, non-refundable EMD can help strengthen Conventional Mortgage offers.

Sometimes, lenders require repairs to be made prior to closing. Any Buyer aware of this fact & willing to make repairs required by a lender in order to close will gain priority over any other offer NOT willing to do the same.

Conventional Mortgage buyers are viewed favorably when compared to FHA buyers because they are more certain to close. For this reason, Conventional Mortgage offers are often accepted below competing FHA offers.

Strong FHA Buyers

• Make the Highest Price Offer
• Non refundable Earnest Money
• Waive the Appraisal and/or Mortgage Contingency
• Buyer willing to complete any Lender required repairs

Most FHA offers are from buyers with limited financial resources and are at the highest risk of being unable to get a transaction to closing. For this reason, the two terms which carry the most weight are the Highest Offer & the Willingness to complete Lender required repairs.

Here are 39 properties for sale which you can make offers. 

Some are “Cash Offers Only” & Some welcome Conventional & FHA Offers