The Science of Flipping - Episode 13: Flipping Quick Tip – Holding Time and Holding Costs | Real Estate Investing Podcast

Episode Date: November 15, 2013

document.addEventListener("DOMContentLoaded", function () { podlovePlayer("#player-5eb5ab3258930", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/post/1499", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/config/default/theme/default"); }); <p>[podlovevideo src=”http://thescienceofflipping.com/audio/Podcast-Episode-13-Quick-Tip-Holding-Time.mp4″ type=”video/mp4″ duration=”” title=”Real Estate Investing Podcast – Episode 13 | Flipping Quick Tip – Holding Time and Holding Costs”]</p> This week Justin has given us a flipping quick tip regarding holding time and holding costs on your flips. He address’s the fact that there are many cities that the market has softened for one reason or another. He give you a couple of great tips on how to make sure your hand doesn’t get caught in the cookie jar. Don’t miss this.

Hey guys, this is Justin Colby, host of the Science of Flipping podcast. Welcome, welcome, welcome. This is episode 13. Today, guys, we are going to be doing what I am terming a quick tip. These are going to happen very sporadically. So the podcast, instead of just being audio, you are going to be able to see me. I'm here in our office here at Phoenix Wealth Builders. My partner, Eddie, is right next door in his office so these are sporadically going to come through as your quick tips and today guys at the science of flipping podcast we are going to be going over

length of holding your property in flipping guys we all know that markets can change and you know sometimes you list a property after you read how did it flies off the shelf is just gone yet 45 offers the first day that you get it for over asking well guys I have had students as well as colleagues in mind here in Phoenix in Las Vegas in California we've all been talking about not received a lot of questions about what's going on today's market.

The inventory is staying on the market a lot longer. Instead of putting a property on the market and getting multiple offers for at or over, the market has softened. So what do we do about that is fix and flippers, right? Because this is where a lot of fix and flippers can get in a lot of trouble. And I give you three or four quick suggestions that you need to always be mindful of when you are in the fix and flip business. So first, you need to find money that gives you six to 12 month notes, preferably 12 month notes. Now that same money also has to be calculated correctly. So even though you may get your 12 month note, you also want to make sure that you're calculating that money correctly. Meaning, if you usually hold a property from time of purchase, rehab, and time of funding the close for let's call it three, three and a half months, you now may need to up that when you're

calculating cost of money and holding costs. You may need to really be adjusting for closer to six months to eight months that you may or may not be holding that property. Why? Why would you even consider holding costs for eight months including your cost of money so you're not caught with your hand in the cookie jar so you're not in a position that a lot of investors are right now where they're holding property and they're gonna have to drop prices huge price drops so that they can get their home

sold instead make sure that you're buying the right deal that is first and foremost make sure you buy the right deal your buy price is how you make your money we all know that it's all on the buy but then also calculate your holding cost your cost of money make sure you have a 12 month note six is very minimum make sure it's a 12 month note but also make sure you have holding costs for six to eight months. Make sure your cost of money is within that holding cost. And then if it pencils, that's a good deal, guys. That's a deal that you want. Again, I've been your host, Justin Colby from The Science of Flipping.

If you have not seen our website or gone to our website, we give away the number one e-book on the market, guys. I tell you time and time again in our podcast, this e-book is the e-book I wish we were able to have when we first got started. It is the 15 most common mistakes by real estate investors today in this market. I wish I knew these mistakes before we got started. We would have made more money in a much quicker amount of time, guys. Get to the website, thescienceofflipping.com. Get your e-book. And again, I'm your host, Justin Colby, and this has been a quick tip for the science of flipping.

See you guys soon.