Category: Jewels of Wisdom Newsletter

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

The Greatest Power of Humankind

The Power to Choose. You’re probably thinking, “really Dan? You click-baited me for this?” Stay with me here today. I had that same thought when I read a book years ago on this topic. As the years have progressed I’ve witnessed the power of both wise choices & poor choices.

Let’s swap  “power to choose” for “decision” as we continue here.

Where does EVERY SINGLE DEAL you’ve ever done begin?

It MUST always begin with a DECISION about what price you are willing to pay. Then comes the offer.  Again, seems simple, but I can remember struggling for DAYS wondering,

“What should I offer? Is this too much and I lose money? Or is it too low and I don’t win the deal?”

Making an optimal decision when considering a deal is the KEY to making a deal. The wealthiest real estate investors I know analyze a deal and make a quick decision about the price they’re willing to pay. Then they make the offer. Speed wins deals. Quick decisions offer you speed.

Failures in the real estate business flounder with the decision of how much to offer. So they make NO offer and win NO deals. With no deals, there is no profit and one must flee to another profession.

Today’s lesson? Or reminder? Get good at deciding what you will pay and MAKE THE OFFER!!  

Here are 38 properties for sale which you can make offers.

Imagine a 12% Treasury Certificate

US Treasury Certificates are considered the safest place to park cash by the entire world.

Right now, a 6 month treasury offers 3.64% as calculated on an annual basis. So you buy the certificate today for $100,000 and in 6 months you receive $101,820.

If you could somehow buy a certificate that offered 12%, you’d invest $100,000 and receive $106,000 in 6 months. Much better return.

The truth is, a US Treasury Certificate paying 12% or more has not existed in over 40 years. They are not likely to return either.

However, there ARE places you can park your cash for 6-12 months and receive 12% returns. I am paying 12% on several million dollars invested with Diamond Equity this very minute on a few dozen projects we currently have in motion.

The safety of US Treasuries comes from the fact that the repayment of the principle and interest is guaranteed by the US government.

The safety of a Private Mortgage Investment into one of my deals comes from the fact that the repayment of principle and interest is guaranteed by me personally, and the volume of deals we successfully close. Plus, your investment is backed by a first position mortgage, promisory note, and lender’s title policy.

• Considering Lending me Money? Sign up here and review the documents found in the email you receive upon confirming your email address.
• Interesting in Building Your Own Network of Private Lenders to Fund YOUR Deals? Sign up here and review the Private Money Masterclass detailing the concept

The Best Deal I’ve done

Several of the partners here at Diamond Equity are currently going through this book. To properly “read” (prob better described “live”) this book takes 10 months. If you read it, you know.

I first read this in 2003 when I was selling cars. I remember suddenly hitting sales bonuses and higher closing % immediately as I began the habit of reading this book.

I bought a few used copies on Amazon-as I prefer Hard Cover books over soft & I love seeing someone else’s notes on the pages. Wabi-sabi

When this one arrived, I noticed it was old, but in great condition. I paid $11 plus shipping.

Upon closer inspection and with the help of Gemini AI, I discovered I am now the owner of a First Edition, First Print run copy of a book that has changed my life. Value, in this condition, is between $250-$400.  

Let’s call it $300 value. I paid $11.  ROI nearly 27X on my money. I have done no other deal anytime in my life with a 27X return on my money.

You think, “Ah, that’s small money Dan”

Here’s the real Return on Investment (ROI): “Today I will multiply my value a hundredfold” – Scroll VIII – Og Mandion. The habits of thought, belief, & action developed through this book is how I built the life I live today.

To accidentally own a First Print Run, First Edition of a book that has done so much for so many people, feels like a winning lottery ticket.

 Be the Best Partner Possible – Exceed Expectations

If you are partnering on a real estate deal with someone, or a team, it is best to setup expectations in advance about what you’re expected to do, and what each other person is expected to do. Even if you are just the “passive money” in the deal, you should still be aware of who & what is being done by the partners.

Once expectations are setup, the Best Partner Possible EXCEEDS those expectations. They try and step up and do MORE than they’re required. They surprise the other partners with great ideas and bring more value to the table than the promised.

The failure of this principle is said best by Proverbs 25:12: 

“Like clouds and wind without rain is a man who boasts of a gift he does not give.”

The Best Partner Possible in a Real Estate Deal ALWAYS:

1. Identifies & secures a profitable deal
2. Overcomes all hurdles to getting that deal closed
3. Manages the deal through THE ENTIRE CYCLE until the property is sold & all partners are paid in full.

1. Identifies & secures a profitable deal  – No profit is made, and no partnership produces return if no real estate deal exists to be done. Obvious, but most real estate investors crave more deals than they’re actions product.

2. Overcomes all hurdles to getting that deal closed. Title issues, challenges with tenants, inaccurate financial statements-these are just a few examples of what might derail a real estate deal. The Best Partner Possible expects these challenges and handles them swiftly. Dead deals are often closed by that next, more persistent buyer-often at better pricing than that first, failed, inexperienced & lazy attempt.

3. Manages the deal through THE ENTIRE CYCLE until the property is sold & all partners are paid in full. – This is the hard part because the timeline is so long. Even a single family fix & flip deal runs 3-6 months on the short end. I’m a partner in a little more than a dozen large scale self storage developments. These are a large percentage of my net worth.

We’ve been working these deals since 2022-2023, and less than 5 are operational and being rented. There is still another 2-3 years on those deals remaining to fully lease/stabilize those properties and start enjoying cash flow. Glad I have the Best Partners Possible on these deals-many developers have gone bust in the past 3 years.

The lesson here? Choose wisely. Partnerships are like marriage-even if not necessary life long. Better to have difficult conversations up front – and walk away if expectations don’t align, instead of signing up for the long term pain and potential losses long term.

How is the Iran War is Affecting Real Estate

The following are my 3 observations from the 181 transactions I’m currently in the middle of closing. 

1. Investor activity is increasing
2. Interest rates are trending higher, again.
3. Business as usual

Investor activity is increasing – Anytime the stock market drops in value 10% or more, we see many investors who haven’t bought in a while back in the market. There is something wonderful about the slower, yet more predictable and often much larger paydays we enjoy in real estate when compared to the stock market.

While activity is up, I don’t see this being a level of activity that is pushing prices up the way we saw in Covid.

Interest rates are trending higher, again. War usually causes inflation as demand for oil to fuel a war causes prices to rise. This war is actually damaging many of the oil producing infrastructure which will take years to rebuild-once the conflict ceases. Additionally, the Strait of Hormuz being choked by Iran is driving up the price of oil

When oil costs more, that cost is passed along to the consumer. You’ve probably noticed the higher gas prices already. Higher prices make it difficult, if not impossible for the Fed to lower rates.

The Silver Lining – Since rates are not dropping, and might even increase, we are seeing buyer activity in a bit of a rush to lock in their deals under current rates-hoping to refi after things settle down.

Business as Usual – Rates skyrocketed back in 2022 and it seemed like the end of the world. Transaction volume has dramatically slowed, but most have found a way to continue operating their business under the new conditions.

This feels like business as usual. For us, here at Diamond Equity, business as usually has meant figuring out how to make deals happen no matter what conditions exist. We will not “sit out the market” and wait for lower rates, better deals, or the end of the war.

Every morning in Africa both a gazelle & lion will awake. Each has the challenge to outrun each other. The lion must win, or it will starve to death. The gazelle must win, or it will be eaten. The lesson? Wake & up run as though your life depends on it. This is business as usual no matter what geopolitical or economic conditions may exist.

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Currently Owned, and Buying throughout the US:

• Value Add Deals, Ideally occupied with below market rents
• Industrial & Commercial Property, 10K sq. ft. – 250K sq. ft.
• Mobile Home Communities (50 pad minimum)
• Well located Retail Development Sites
• Residential MFR & SFR

If you’re selling a property that could use some “value add”, reply to this email with details including the address, size, price, & photos, if available, and we can get the ball rolling.

Real Estate is a HASSLE

1. Owning real estate is a hassle.
2. Selling real estate is a hassle.
3. Buying real estate is a hassle too.

That said, we all know & agree there are fortunes to be had buying, owning, & selling real estate!!

Owning real estate for rental income is a hassle because it’s actually NOT PASSIVE INCOME. In order to reap the benefit of rental real estate, whether commercial or residential, you MUST manage the deal closely.

Even when you have professional property management, you still must monitor their decisions & actions for effectiveness. When vacancy comes, especially in larger commercial & industrial property, the cost to bring in new tenants often runs multiple six figures not including the 1-2 year (or much more) carrying cost while the property is on the market for that lease.

Selling real estate is a hassle too. Many brokers read this email-and they’re handsomely compensated for each transaction because of their skill in navigating the market and getting the deal to closing. If it was as easy as selling a stock (click of a button), the brokerage business wouldn’t exist.

The difficulty in selling may also be the feature that saves you from panic selling on bad news-as so many stock investors are doing as you read this because of the war in Iran. The difficulty in selling builds a safetly into accidentally selling the real estate you wished you could keep.

That said, if you choose to sell me a property, I strive to make every aspect of our transaction much more like selling a stock. 

After closing, I want you to say, “Wow, I never knew selling that property would be so easy & I cannot believe how fast we got to closing!” (We have closed some residential deals same day, most commercial/industrial deals close in 75 days or less-usually environmental is the hold up)

Buying real estate is a hassle too. First you make the offer, then it’s accepted. Often you run around like a headless chicken to obtain a loan. Doesn’t matter if it’s a hard money or conventional lender-it’s a hassle. Then the insurance…

On distressed property, like vacant houses, or much more challenging, vacant commercial & industrial property, obtaining ANY insurance can be difficult. Many insurers simply will not insure a high vacancy commercial property. Again, when we are buying, we are already aware of this challenge and have the resources to get the deal to closing anyway.

Why Am I Complaining About the Hassle of Real Estate today?

I’m in the middle of closing out a small residential 6 flat I own personally in Chicago. I renovated the entire building, owned it for 5 years, and am earning about a 2% profit on the deal.

The buyer is getting a great deal and is a much better person to own & operate this deal. He and his wife will be a much better manager than me & my property managment company because he manages himself.

Even though I’m basically breaking even on the deal, I am happy with the transaction. The price is fair and I am being released from the burden of owning & managing that property. The scale of Diamond Equity is dramatically larger than it was 5 years ago and the deal is a distraction.

Additionally, the new owner will find better tenants than I could. Those tenants will be happier with that personal managment structure than I could provide there. I feel like I’m leaving the neighborhood & building in a better position than I found it and am giving a solid foundation for the new owner to prosper there over the next few years. Grateful to be part of this deal.

Do you (or any clients) own any property that’s become a hassle?  Here’s what I’m buying:

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Currently Owned, and Buying throughout the US:

• Value Add Deals, Ideally occupied with below market rents
• Industrial & Commercial Property, 10K sq. ft. – 250K sq. ft.
• Mobile Home Communities (50 pad minimum)
• Well located Retail Development Sites
• Residential MFR & SFR

If you’re selling a property that could use some “value add”, reply to this email with details including the address, size, price, & photos, if available, and we can get the ball rolling.

My dad has been here in Florida with me often this Winter. He just headed back home yesterday. Of course we were reminiscing about the early days of Diamond Equity and the birth of the name popped into my mind.

“Diamond Equity Investments”

I remember handing my first business card back in 2006 to Craig Marvel, (a volume flipper, landlord, & private lender) ,a few weeks after we met and he said, “I like that name!” Those words of approval seemed to ring out in my ears as he said them. Those exact words I still remember nearly 20 years later.

(At the time I was broke, had bad credit, and not even a car. How dare I declare myself a real estate investor…)

That was summer 2006, just a month or two before my first fix & flip deal. Since then I’ve been a part of more than 3,000 myself, and well over 1,000 of those with Craig, who eventually joined Diamond Equity as a partner.

So How did I Come up with Diamond Equity Investments?

I remember the name coming in a flash. Like the future suddenly became visible in that moment.

I liked the Diamond for the reason that when you find a diamond, it is rough and requires an artistic investment of time & money to become something beautiful and more valuable than it was when you found it.

This is just like profitable real estate deals. You must artfully improve a property within the constraints of the budget to create something more beautiful & move valuable than it was when you found it.

You can listen to this past podcast my dad & I recorded about the early days of Diamond Equity and his career as a Private Money Lender.

Here’s What Diamond Equity Investments Does

Remember, Diamond Equity is a MARKET MAKER. We will make an offer an nearly any property anywhere in the country. We provide liquidity. When you want out quickly, without the repairs, lease up, inspections, time on market, etc, you call Diamond Equity & just sell it as is!

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Currently Owned, and Buying throughout the US:

• Value Add Deals, Ideally occupied with below market rents
• Industrial & Commercial Property, 10K sq. ft. – 250K sq. ft.
• Mobile Home Communities (50 pad minimum)
• Well located Retail Development Sites
• Residential MFR & SFR

If you’re selling a property that could use some “value add”, reply to this email with details including the address, size, price, & photos, if available, and we can get the ball rolling.

Diamond Equity is a MARKET MAKER. We Buy & Sell Real Estate of all asset classes throughout the U.S. from our office locations in each Atlanta, GA, Philadelphia, PA, & Chicago, IL.

We don’t focus on one asset class, we focus on providing liquidity, a quick, private, direct sale for properties that usually have some type of problem: vacancy, needs work, under market rents, etc. We’ll buy it as is, in it’s current condition.

Here are a few examples of current deals:

(We occasionally offer Limited Partner participation on deals like this)

1. $20M Small Bay Industrial, Washington, DC– This is 90% occupied & under contract at an 8.5% cap rate. There are good tenants, including the US gov’t. This is a fair deal with upside in leasing the other 10%. There may be a small space remaining in the capital raise once we clear due diligence in the next 3 weeks.
2. 63 Unit Apartment Development, Edgewood, WA– We are currently working on an entitlement deal in Edgewood Washington which targets a $48K per unit exit ($3.024M) after getting plans approved (shovel ready). Based on past deals, the soft cost is estimated at $250K-$400K and likely to take 12 months or more. We would consider selling this parcel now for $1.217M in the event you’d like to work on this $1M profit deal.
3. 87,000 Sq. Ft. Self Storage Development, Lawrenceville, GA- 3rd floor is going up as we speak. We are shooting for a 5/15 certificate of occupancy date. This project will be rented & stabilized by the end of next year. Grateful to those readers who are my partner in this project.

Here are a few examples of recently closed deals:

1. 60,000 Sq. Ft. Shopping Center, Las Vegas, NV – Bought at 65% occupancy and sold at 95% occupancy 3 years later. We invested about $4.075M in capex, including tenant improvements. It sold for $16.75M.
2. 30,000 Sq. Ft. Warehouse, Memphis, TN – We sold this property on a rent to own contract with a 5 year lease and a 3 year option term. The price increased at the end of each year before expiring at the end of year 3. This incentivized the tenant to become the owner quickly, which they did in December 2025.
3. 37 Miscellaneous Residential Deals, throughout the U.S. – We have been aggressively scaling our residential flipping business throughout the entire US – even Alaska!! (a surprisingly vibrant & expensive market)

Here’s What Diamond Equity Does

Remember, Diamond Equity is a MARKET MAKER. We will make an offer an nearly any property anywhere in the country. We provide liquidity. When you want out quickly, without the repairs, lease up, inspections, time on market, etc, you call Diamond Equity & just sell it as is!

If you’re selling a property that could use some “value add”, reply to this email with details including the address, size, price, & photos, if available, and we can get the ball rolling.

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Currently Owned, and Still Buying anywhere in the US:

• Value Add Deals, Ideally occupied with below market rents
• Industrial & Commercial Property, 10K sq. ft. – 250K sq. ft.
• Mobile Home Communities (50 pad minimum)
• Well located Retail Development Sites
• Residential MFR & SFR