The Science of Flipping - Episode 4 – Is This A Deal Or Not? | Real Estate Investing Podcast

Episode Date: September 13, 2013

document.addEventListener("DOMContentLoaded", function () { podlovePlayer("#player-5eb5ab326e1f6", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/post/60", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/config/default/theme/default"); }); document.addEventListener("DOMContentLoaded", function () { podlovePlayer("#player-5eb5ab326e280", {"title":"Real Estate Investing Podcast u2013 Episode 4 | Is This A Deal Or Not?","subtitle":null,"summary":null,"duration":"","poster":null,"chapters":"","transcripts":"","audio":[{"url":"http://thescienceofflipping.com/audio/Podcast-Episode-4-Deal-Analysis.mp3","mimeType":"audio/mpeg","title":"AUDIO/MPEG","size":0}]}, "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/config/default/theme/default"); }); Many investors make the fundamental mistake of allowing someone else to tell them whether this is a good deal. You never want to listen to anyone who is making money on the deal if you buy it. You always need to do you own analysis and this podcast will help guide you on how to look at deals in your market that others are passing on.

Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. Hey guys, and welcome to the Science of Flipping Podcast number four. I am your host, Justin Colby, and I want to welcome you guys today. You know, if you're new to this podcast, make sure you guys go to our website, thescienceofflipping.com. We are giving away the number one e-book on the market today. The e-book is called the 15 most costly mistakes a real estate investor can make in this economy. Guys, this is the number one e-book out there. If there's any e-book that you need for your business to take your business to the next level, this is the e-book that you guys need to make. If Eddie, my business partner, and I would have known this and these mistakes before we got started, we would have made less

mistakes. We would have made more money in a faster amount of time. This is what myself, Eddie, other investors that we know that are flipping deals, these are the same hurdles and the same problems that all of us are seeing and these are the mistakes that are being made. Get this e-book, thescienceofflipping.com. It is free. Get there, download it, read it. It will help you make more money quicker. Guys, today's lesson is going to

be about deal analysis. How do you guys analyze deals in today's market and what to do with them? If this is your first time to the podcast, guys, welcome again. I'm excited that you're here. I can't believe we're on podcast episode four already. This thing is really taking off. I'm getting a lot of great responses from our listeners, so I'm very excited. But this podcast, guys, if you are new and this is your first time here, welcome. We here at the Science of Flipping Podcast are here to teach you how to develop and build the life that you want to live while flipping real estate, while being a real estate investor. You see, after coaching hundreds of students and being a real estate investor myself,

I've seen a lot of people work too much in their business. They're not working enough on their business. You know, they're the type of managers who are actually swinging the hammer rather than figuring out a way to outsource that, right? So this podcast, guys, is for the rookie investor who just got started, who needs to get their first deal done, all the way to the investor who's done hundreds of deals over the last couple years and just needs maybe a little golden nugget so that they're not working so hard in their business. That's why we created this podcast, guys.

It's really for everybody and it's meant so that everyone can live the life that they want to live, so that they can be in a different state. If they can be in a different country, they can be on the comfort of their own couch, relaxing with ESPN on and flipping deals and raising private money and acquiring deals every day and selling deals every day. And they don't need to be on the job.

Creating those systems. It's all about systems in your business and you need systems in a fix and flip business if you're gonna be successful. If you're gonna attempt to do any type of volume in this business, you need the systems. Every business is built around it. That's what we're here to teach you guys today.

Guys, if you're just getting to know me, my name is Justin Colby. I'm your host and we're here to teach you guys today. Guys, if you're just getting to know me, my name is Justin Colby. I'm your host. We sit here today having taught hundreds if not thousands of real estate investors across the nation, having flipped well over 300 deals over the last seven years, six or seven years or so, but it hasn't always been that way. You see, my business partner, Eddie and I, we started Phoenix Wealth Builders, but we never came from money. We never had a golden spoon in our mouth where we could just rely on, oh, we have plenty of funds, let's

go find a deal and flip it, or we didn't come from a family of investors. So we created everything from the ground up. So I don't know, I know a lot of you guys out there have shared that same story with me. So I just want to relate to you guys that we started from nothing and we took our lumps. You know, if you've listened to many of our podcasts, I tell you the same thing every time. It took us those nine months to get our first deal. It took us, you know, another six months or so to get the second deal. So it wasn't that quick. We took our lumps. We were both feed in. We had no other income. It was all day, every day. And we finally started to make it work. And now we can sit here and tell you we flipped 96 deals

last year. And this year we're working on 50 I think we're buying another one tomorrow I mean the numbers just keep adding up and and we're doing a development deal out here in Mesa Arizona and our business is looking good right now but it wasn't always that way and we had to go through some struggles and some hard time so if you're out there saying, you know, this is difficult and I'm thinking about giving up and I'm thinking about going and getting a nine to five and, you know, trust me, we've been there. We've gone through it. I've slept on my friend's couch. I've lost houses. I've gone to foreclosure. We've gone there. And now we've built it all back up over the last six or seven years, guys.

And, you know, now if you took a picture of us, you would say we're really successful. And you're right. We are. But it started somewhere. And along the way, we built the systems to implement into our business so that we could sit here and have this beautiful office that we're out of and live in beautiful homes in Scottsdale, Arizona and drive great cars and have a knife lifestyle and go on vacation and be in Costa Rica and acquire three or four homes. We've built that because of systems, guys.

So welcome again. I'm actually really excited. Today was a really good day. It's almost 7 o'clock in the evening here. I've finally gotten around to being able to record our podcast for today. Primarily, I'm going to be talking about how to analyze deals so it makes sense for your business because not all of our real estate investing businesses are the same, right? Now, my business, Phoenix Wealth Builders, is really revolving around fix and flipping. Now, as I just told you, we're developing deals out in Mesa, Arizona.

That's a great addition to what we're already doing. And I love it and it's new and there's always something new to do or to learn and contracts to sign. It's a lot more people and a lot more zeros, but there's a lot of similarities between being a real estate developer and a fix and flip investor. And so we're able to use a lot of those same systems that we've built over time in our fix and flip business and use it into the development world. But that's just part of it. For some, you guys want to be buying fix, you know, hold properties. You want to buy it, fix it a little bit and make it rent ready. For others, you want to buy it and just sell it without putting any money into it. So it's all about how you analyze the deal. And so today, guys, I'm going to go over how do you analyze deals and how do you fit that into your business.

First, I want to tell you a quick little story. I know my business partner, Eddie, loves to tell this story. It happened while we were at auction. And we were buying a bunch of homes at auction in 2011. And for whatever reason, it was my day to analyze the deals and to be at auction. So we have our list and we get a list every single morning about the deals that are going to be at auction and we whittle that down to deals that we like that are going to be at auction. And so we simply analyze them and have our highest bid. They give us a starting bid and we figure out what our highest bid would be and we hope to get it. And we did very, very well. But there was one time, guys, and it happens to all of us, that

I didn't pay close enough attention to detail. That's really what I'm going to hit home here right now is you got to pay close attention to detail when you're analyzing deals. The story goes, it was my day and we started off the day pretty well and we got a deal and I felt pretty good about that. A little bit later in the day, the auction goes over a couple hours. So a little bit later in the day, we got another deal. Then this third deal comes up and we're looking pretty good and the starting bid was $36,000

and some change. So I started our bid there obviously and I had a highest and best amount I was willing to go. So we get the call that our opening bid is looking like we might get the deal. And so I'm on the phone with my guy down at the county courthouse steps and he's saying, you know, no one else is bidding and you're the only bid in there and I'm excited. And you know, it's closer to the end of the day, so I'm figuring maybe everyone already blew their money for the day. Maybe this is the reason why we're getting the deal is because everyone spent all their money, so we're getting this deal. It's in a great area of Phoenix, Arizona, guys. It's in the historical district or historic

district of Phoenix. This would be the steal of the day if I can get it for this opening bid. We get it and we win. I am thrilled. We just got three awesome homes. Two of them were out in Mesa and one of them was here in the historic district. go visit the home after we buy it and it turns out this home was built in the 1930s. Guys, Arizona is not a very old state. This must have been one of the first homes ever built here in Phoenix. You know what? It could have been the first home ever built here. That's literally the condition it was in. It had a makeshift upstairs built with plywood. I mean, you could literally push the exterior wall of the house and the whole wall would shake. It was crazy. So immediately I say, oh no. Now every other home around there has

already been brought up to code and rehabbed to a certain extent or is a little bit newer, is built in a newer time or in a more recent year. And this home happened to be the one home on the block built in the 1930s. I swear, guys, I think this was the first home built in Arizona or in Phoenix, at least. And so we had to figure out what to do. But the point of that, and we ended up actually selling it to a builder who had much better understanding of what was going to need to be done to this home because I mean it was basically a teardown and at the time we've never built from the ground up so we sold it to a builder we walked away we didn't take a loss we really just broke even and walked away from it and I think we sold it from $39,000 or something which would cover a cost of money in the fee we paid to buy it at auction.

So anyways, we got out of that deal clean. However, guys, the point is you got to pay attention to detail because I had that information in front of me when going through our list. I know Eddie loves to tell this story and he finds it to be incredibly funny. And at this point, I do too. But at the time, I was really frustrated with myself because I didn't do anything wrong except for I just didn't pay attention to the detail of the home. The square footage was right. The area was right. The price was right.

But it was too old. We didn't want to buy a home built in the 1930s. To this day, we still don't want to. We don't want to buy a home built in the 1930s. To this day, we still don't want to. We don't want to buy anything really older than 1960. If we have to and it's in the right area, 1950s will work. But you really need to pay attention to detail. Some of the things that you really want to pay attention to are obviously year built.

I just went over that with you. You want to know when that was built. And then you want to know in that surrounding area, what else has been built and what is the average year built. I just went over that with you. You want to know when that was built. And then you want to know in that surrounding area, what else has been built and what is the average year built. Square footage of the property itself, as well as square footage of the lot. You know, guys, we've made a lot of money buying a home that may not be the sexiest home to buy, but the lot could be divided in two or even three. The lot was huge. So that gave us room to, you know, maybe the home itself didn't make a lot of money.

Maybe we break even. Maybe we make a couple dollars, five, 10 grand. But then we're able to sell the second lot for 30 or $40,000 for just the lot. So you gotta really pay attention to the lot size as well. A lot of investors forget about that. Forget about the creativity of simply buying the home that looks like you could break even, make a dollar or two, but then you can sell off that lot. You want to know how many beds and bath it is. So it could be a huge house, but it still could be a two

bedroom, two bath. That is very common here in Arizona. So if you're a fix and flip investor, and you're really focusing on three, two and above, make sure you're looking at the bed and bath combo and whether you may need to add square footage. And that I'm going to get to the adding square footage here very shortly in our podcast, but really pay attention. That's the first thing when you're analyzing a deal. Figure out what subdivision it is in. Start looking and comping, and when you're running your analysis, look at that specific subdivision and the builders in that subdivision, what is being sold, what has been sold, what is pending, right? What is for sale and for what price? Pay attention to detail, guys. We learned our lesson. In fact, I learned my lesson. Now, this was years ago and trust me,

I've never made that mistake and I know Eddie is not either. He learned from my mistake, right? He's a smart guy. So, you know, when analyzing a deal, whether you're getting it from the MLS, whether you're getting it from a wholesaler, whether you're getting it from the auction list, as I was just explaining, no matter where you're getting the deal, you can't just rely solely on the numbers.

You know, a lot of times, let's just use the same example as the auction. A lot of times the auction, some of the numbers look really good, right? It looks like you could buy this home for $100,000 and it looks like all the comps are selling for about $215,000 to $225,000. Well, right away, you would think, oh, I want this deal absolutely all day long, but you can't just run it by the numbers. You need to have an estimate in your head of what the rehab cost is going to be. Now, I'm going to bring up a couple of subjects here about holding costs and overages and, you know, paying for your insurance, your cost of money, your cost of sale, meaning commissions and any type of concessions you're going to give. So all that gets built in to those numbers. So what we will typically do is we will take 10% of what we're selling it at and that's our cost.

So we need to reduce it by 10% immediately. So if we're going to sell it for $200,000, we need to reduce it by $20,000 immediately. So if we buy it, we know right away if we sell it 200, the real number is really going to be 180 because we're going to pay 6% commission, title insurance, concessions, so on and so forth, right? So just because the numbers look good on a piece of paper, just because a wholesaler basically says, you know, the comps are this, you could buy it at this and make $100,000, doesn't mean that's necessarily the case. Now, I brought up a subject about a wholesaler or maybe a real estate agent who sends you a deal. Guys, the number one rule that we live by here at Phoenix Wealth Builders, we never allow a wholesale or real estate agent, a wholesaler or a real estate agent to tell us what that home is worth. Never, ever do we rely on their comps.

Because at the end of the day, guys, you have to remember that they're in it to make money also. A wholesaler wants to paint a beautiful picture of the value of this home and what it's going to be worth and how much spread is going to be in there so that you buy it because they're going to make their wholesale fee, right? Same thing with a real estate agent. They're going to pay a beautiful picture for what the home you can buy it for, what you could sell it at, and how much you're going to make because they work off commission. So always remember that rule when analyzing a deal, whether you got it from a wholesaler or a real estate agent, make sure you do your own analysis so you have the numbers that

you're really going to make on that deal. Never, ever trust someone else to tell you what that home is worth. All right, so the next thing I want to, guys, this is super important because the philosophy is you make money when you buy the home. So your deal analysis is incredibly crucial. Incredibly crucial. I mentioned briefly about you need to have an estimated rehab in your head when you're reviewing a deal. Now let's say you're a rookie investor.

Well, how am I going to know? I'm a rookie investor. I have no idea what these rehabs are. I've never done a rehab yet. Well, what I've suggested in previous podcasts, and I'm going to keep suggesting, is you need to first go figure out what the retail cost of materials are. Go to Lowe's, go to Home Depot, and figure out what it costs for carpet per square foot, what it costs for tile per square foot, what does hardwood cost per square foot, what does paint cost per square foot,

what do cabinets cost, what does granite cost per square foot, what does formica cost per square foot. Find out retail numbers of what the materials cost. Then you might need to do a little research and interview and sit down and buy a contractor some coffee and simply ask them what it would cost them per hour to do a rehab. Now the reason why you want to do that as a rookie investor or investor that doesn't quite have the systems down yet to just be able to estimate a rehab bid.

You want to know how much will a certain square foot house cost, and how quick can you get it done. You want to know how much per hour you're going to be paying these contractors. Now, the hope would be the contractors are going to get you a deal on the materials. So you want to know the retail first. So that way when the contractors say, my bid is this, you're paying X for tile, Y for carpet,

you're paying Z for the paint, you can compare that to what the retail cost is. Now you know whether you're paying retail or not. For those of you who have experience in this, for us out here in Phoenix, we know if we're going to buy a 1,500 square foot home, a traditional 3-2, we know the rehab bid for the most part

will come in around $30,000 to $35,000, give or take 10, most 15%. But let's say 10%. We have a 10% margin going either way. So $30,000, it could be closer to 35 or it could be closer to 25. We know that primarily because of our experience. We've been doing this long enough. But here's the thing. I spoke about a podcast previously about you never want to stop finding material guys, finding the better deal so you can save some money on your rehab. But now if you're an experienced investor, you would have a pretty good idea of what these homes are going to cost. You know what it costs per square

foot for all these materials and you really know what it costs per square foot for all these materials and you really know what labor costs at this point. So, you know, you need to have an estimated rehab and you need to have a little bit of slush in that estimated rehab so that you can have a little, oh man money, I like to call it. And that was a nice way of saying it. But oh man, I didn't think about this, right? Or oh man, I didn't know we were going to have to handle this part, right? So because of that, you need to figure out what about that house is important that I know I'm going to need to add value or fix or bring value to the home?

So, for example, pools are a great example for here in Phoenix. Pools are a great thing to have for a home, but they could add possibly $5,000 to $10,000 to your budget depending upon what you need to do to it. What kind of condition is it in? Roofs are another one. Don't forget about having a roof in there. You know, if the roof looks okay, that's fine. But nowadays, the buyer's lenders are so strict about what they're willing to accept,

you need to budget a little bit of money in there for patching a roof or repairing part of a roof and getting it signed off by a roofing contractor. If you have a carport or a garage, are you going to build that carport into a garage? See, out here in Phoenix, we have a lot of homes. A large percentage of homes have carports. So when we look at a home and we see if it has a garage, we maybe budget, or I'm sorry, a carport, we maybe budget for a garage. You need to have a little bit of that extra money in there to see if you can bring up the value of that home. Whether it's a car, a garage, a carport,

a roof, an air conditioning unit, that's another big issue out here in Phoenix. Now, I get it, guys. A lot of you guys are in Florida or Pittsburgh or New York or Chicago, and air conditioning units might not be the big ticket item, but out here, it's over 100 degrees half the year. These things are important. So you need to kind of budget those, and you need to be able to budget it for the square footage of the home because for roofs for example you need to know how much it costs to get squares for your roof or if you're in a tile use a tile roof or a wood shingle roof or whatever that may be. You want to add value. You want to have that money budgeted for your rehab. The next thing, guys, I never suggest buying a house without stepping foot

in it. If you don't step foot in it, make sure someone you know does step foot in it. We won't buy a home from a wholesaler unless myself, Eddie, our project manager, one of our real estate agents, or the wholesaler themselves can give us a detailed picture album showing exactly the home. But really, we want to be stepping into that home. We want to know exactly what we're going to need to be doing for that home. Now again, we have a pretty good idea of square footage and what's really going to be entailed there, but still, we really suggest get someone into that home. Someone that you trust. Someone that is not going to be making a commission or a dollar when you buy it. That really is our huge suggestion there. Make sure you see it. The reason being is you might be able to have a different set of glasses

on there. I use this a lot through our podcast, and you'll hear it a lot from me, but change the viewpoint of the glasses. A wholesaler or a real estate agent, they may just give you one set picture of that home, but you might be able to walk in there and say, you know what? We could probably add a bathroom, add a bedroom, increase the value by this, and get it sold for this much more. That is huge when you're analyzing a deal, guys. Being able to take a deal that looks like you could sell it for $200,000 as is after a rehab, and then adding a bedroom to that home for, let's say, round number five grand for a bedroom, but then you can get an extra $15,000 to $20,000 out of your resale price. Now that's how you analyze a deal. And you would not have known that because the realtor or the wholesaler, or maybe you're buying at the auction, you're not going to get that

without stepping inside that home. You want to be able to be creative when you're analyzing a deal. I just got a deal today. It's a 2-1. I'm telling you now, we do not buy 2-1s. We don't buy 2-bedroom, 1-baths, but it's in a good area. And so we're taking a harder look at possibly making it a 3-2. Add 2 bathrooms or maybe 1 bathroom and add a bedroom. Add 2 rooms to that house, add the square footage, get it permitted, and we might have a better deal there. Now, most people would simply just let that deal fly by. Oh, I don't buy two ones. That's not my ballpark. That's not my sweet spot. I'm going to let it go. Put on a different set of glasses, get into that home, and see if you can create the value.

Add a pool. Add square footage, right? That is really how you can create some really good spreads in your fix and flip model. Adding square footage. You might be able to walk into a place, and it is a dump. And you might say, you know what? It's going to be cheaper for me to tear this down and rebuild it from scratch. And I'll make more money because everything will be brand new.

Because all these other comps, you know, half mile away are brand new subdivision. Excuse me, brand new subdivisions. You might be able to look at it with a certain set of eyes. So you got to get your feet in that building. Or your project manager. Or someone that you trust and that is not going to make money based on what they're telling you the home is worth. Not to mention, guys, you want to know what you're dealing with. I do not suggest buying a home that you've never seen. Get out there and

see it. If you're an experienced investor and you say, you know what, I've been doing this now for 5, 10, 15 years. I know exactly what a 2,000 square foot home is going to cost. I know what it is. It was built in the 1980s. I know all that. Okay, fine. I can respect that because when you have the experience to go along with it, that's fine. But still, I highly suggest it because you may not make a huge mistake being that you know certain things, but maybe you're not seeing the added value that you can add. I really suggest everyone get out there. And lastly, guys, let's talk about what your exit strategy is when you're analyzing a deal.

I actually want to talk about exit strategy and then ultimately, when you're analyzing a deal, who are you selling it to? Let's talk about exit strategy. I'm a fix and flipper, so I want to be fixing it to the best of my ability. I don't want to hold any costs. I don't want to half-ass it. I want to get this thing pimped out. This thing's got to be shining. I'm going to spend the money to do so.

But that's because I want to find the retail buyer. I want the family who's looking to upgrade or downgrade or buy a second home or whatever that may be that wants to pay retail. So that's my exit strategy. Now, here's the next point. We traditionally stay in a price point that if the worst case scenario and the economy falls apart again, I have a rental model strategy that these homes, because of their price point, would be good rentals. They're not always going to be 10%, 12%, 15% rentals in a bad pinch, but we'll still get a good rental where we're either offsetting our cost of money or maybe making a little bit of money. So my exit strategy is 100% to retail that home. But at the same token, when you're analyzing

deals, understand you need multiple exit strategies. What if scenarios happen? They just happen. It's real estate, guys. You can plan, plan, plan, but what if does happen? So what if the economy crashes again? Well, I don't want to be holding the bag with homes that are a million plus. What happens then? You got to get foreclosed on and everything else because the home dropped in value to a point where no one's going to buy it. So we buy homes typically in a price point that could be turned into rentals. Now, of course, being in the position we're in, we do take on some of the bigger deals at higher price points. But for the most part, we stay in a price point that will traditionally be a great rental in great areas. You need to know your exit strategy. What if you're more of a buy and hold,

meaning you're just going to be throwing on some paint, making sure that the home's a good rental, updating some stuff, but you're not going to be dumping 40 grand, 35 grand into the rehab. You're going to be dumping 5 grand, 10 grand. Re-carpet and re-paint. Okay. Well, that's your exit strategy. So you get to analyze a deal in a certain way. You would probably buy a deal that maybe I wouldn't because you're not going to try to go get top dollar. You don't need to go spend 35 grand for your rehab. I do as a fix and flipper. So understand that when you're analyzing deals, understand your exit strategies. Who are you selling to? Are you going to buy a home with the intent to sell to a buy and hold investor? Or are you going to buy a home intending to sell top dollar?

You're going to dump a bunch of money into the rehab and you want to sell top dollar. You're going to dump a bunch of money into the rehab and you want to sell top dollar. I can tell you there are plenty of times, guys, that we'll analyze deals and it will be close, but it's just too thin. We won't want to do a deal for less than $10,000. We just don't want to do it. I understand here in Arizona here in Arizona, the price point, and there's hundreds, if not thousands of you guys listening on the East Coast and in California, where you crack up when you hear you can buy a 1800 square foot home for $150,000 out here built in the 1990s. You think it's the funniest thing ever because you're buying that same home for five, six, $700,000. I get it. I get it. That's why

we're investors out here. You know, but you need to have those type of exit strategies. We stay to a certain price point because of that. We want to know if we're going to sell it. We have two different ways of selling it if something bad happens. This is crucial. And there are times where it is too thin. It would absolutely make sense for me to take a property that didn't pencil, we say, for the fix and flip and just go find a rental buyer for it,

an investor who wants it as a rental because it pencils all day long for that. There's just so many times when we're analyzing deals, it's just too thin. We're two, four, $5,000 off. We won't take the risk because it puts us under that $10,000 price point. It doesn't make sense to do a deal for us for less than $10,000. Our price point is so low that we can do deals, $100,000, we get $10,000 back. We basically run at a 10% model. So when we analyze deals, guys, we are running at a 10% model. If we're going to invest $100,000, we want to make $10,000. If we're going to invest $200,000, we want to make $20,000. If we're going to invest $300,000, we want to make $20,000. If we're going to invest $300,000,

we want to make $30,000. Now, above that $300,000 point, that's where it gets a little iffy. That's where it gets a little shaky for us because no longer is it a 10% model. If we're going to dump $400,000, $500,000 into a fix and flip, we want to be making substantial money. We want to be getting close to a six figure return because there is not a lot of exit strategies when you get to that point. When you're analyzing deals, for those of you who are in California or on the East Coast or in an area where you can't buy $100,000 homes and all you have are $500,000, $600,000, $700,000, $800,000 homes, million plus, there would be no way I would do that deal if I couldn't see six figures in it. No chance. Because you don't have the same exit strategies that I was just talking about

that we have here in Phoenix, Arizona. That's another reason why we started investing here in Phoenix, Arizona is because you do have multiple exit strategies. Not to mention it's the fifth largest city in the nation and there's a ton of professional sports teams and a ton of added value to the city. And it's a sprawling city and very wide. So, you know, again, you guys are probably laughing when you hear me talking about a $100,000 deal. I understand, you know, I get it. But if I'm doing a deal for above $400,000, $500,000 here in Phoenix or elsewhere, I'm probably not doing it unless I'm going to get a six-figure return on it, guys. You don't have the exit strategies. So make sure you know what you're doing and you know the numbers that's going in. If you're going to buy something high, make sure there's enough

numbers in there. All right, guys. Well, that's about all I got for you for deal analyzation. They're going to hear a lot more about deal analyzation in future podcasts and other podcasts. And we're going to get it really pinpointed on certain things that we do when we analyze deals that are meant to sell to an investor versus meant to sell to a retail buyer. But guys, this was a pleasure for me to give you guys this information. I'm sure you found a nugget or two to take your business to the next level. Go check out the website. Get that e-book. It's at thescienceofflipping.com.

And I will see you guys on our next podcast. I'm your host, Justin Colby. Peace.