The Science of Flipping - Episode 40: 2 Reasons You Should Invest In Certain Cities | Real Estate Investing Podcast

Episode Date: July 11, 2014

document.addEventListener("DOMContentLoaded", function () { podlovePlayer("#player-5eb5ab31f198d", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/post/586", "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/config/default/theme/default"); }); <p> document.addEventListener("DOMContentLoaded", function () { podlovePlayer("#player-5eb5ab31f19e4", {"title":"Real Estate Investing Podcast u2013 Episode 40: 2 Reasons You Should Invest In Certain Cities","subtitle":null,"summary":null,"duration":"","poster":null,"chapters":"","transcripts":"","audio":[{"url":"http://thescienceofflipping.com/wp-content/uploads/2014/07/Podcast-40-2-Reasons-you-should-invest-in-certain-cities.mp3","mimeType":"audio/mpeg","title":"AUDIO/MPEG","size":0}]}, "https://thescienceofflipping.com/wp-json/podlove-web-player/shortcode/config/default/theme/default"); }); <img src="https://thescienceofflipping.com/wp-content/uploads/2013/09/itunes-justin-colby-150x150.png" alt="itunes-justin-colby" width="150" height="150" /></p> Justin Colby gives you his 2 main reasons to invest in certain cities or zip codes. Whether you are wholesaling, fix and flipping, a new investor, or a seasoned investor, these 2 ideas are what you should be thinking about when you choose a city or zip code to invest in.

Welcome to the Science of Flipping Podcast. I'm your host, Justin Colby. Welcome, welcome, welcome everybody to the Science of Flipping Podcast, episode 40. I'm your host, Justin Colby, the founder of the Science of Flipping podcast, as well as the scienceofflipping.com, the scienceofflippingacademy.com, and pretty much everything else that you can think of as far as the science of flipping. If this is your first time listening to this podcast welcome we love having you if you have not got over to the science of flipping calm yet get over to the website download your free ebook give us your name and email and we'll send you the free ebook on the 15 most costly

mistakes to make in today's market. And I'm also, once you register, I'm also gonna be giving away some really cool, just something I can't really talk about yet, but something very, very cool in the next coming weeks. For free, I will be giving everyone that registers a very cool secret tip that is gonna be coming in the next couple of weeks.

So make sure to get over there. If nothing else, get your free e-book, thescienceofflipping.com and register. But what's going to happen in the next couple of weeks is going to be very, very cool. So you want to register for sure. Again, welcome. This is podcast episode 40. I can't even believe it. We made it 40 already. I love doing these podcasts for you. This podcast is all about being able to create a lifestyle that you guys all want as fix and flippers and wholesalers out there. We all kind of see on TV this certain amount of lifestyle and the cars and the

houses and traveling. And quite frankly, that is exactly the lifestyle I have. We just got back from, I've just been on a world tour from San Francisco to Chicago to Punta Minta, Mexico. I've been traveling constantly and been loving life, but it really wasn't always that way. I got to make sure that that's very clear to all of our loyal listeners. For those who are just here and randomly came across podcast episode 40, it wasn't always that way. We put in our time and we put in our effort and we took our lumps to get to where we are today and where I am today. But that's what you really got to do to get to that point is you got to really get out there and put in the work and put in the effort. And then you can eventually get to a point where you create the systems and the organization to get to a point where you can go on vacation

and still do deals. And that's really what this podcast is about is to give you the systems in the organization to go out and create a true business so that you yourself can be on vacation and still do deals and still get paychecks coming in each and every week and each and every month so you can live that lifestyle because trust me, I've been on both sides of the fence where I've been working 60 to 80 hours a week and I was making a lot of money but I was pretty much miserable to where I am today which I don't work nearly 60 to 80 hours a week and I make very good money and I'm very, which I don't work nearly 68 hours a week, and I make very good money,

and I'm very happy because I get to spend the majority of my time with my loved ones, with my friends, with my girlfriend, with my family. It's important to me to have that time. So that's what we here at the Science of Flipping and myself try to do each and every podcast is give you the systems and organizations to go out there and create a business that you can work from wherever you want. The comfort of your own couch, I like to say. Again, that's really what this is all about. Right now, we're still working on our 79 unit development out in Mesa, Arizona. Right right now the most exciting news that we have going on in our business is we've really ramped up our wholesale division of our business.

And it has been an incredible adjustment for one, because for the last seven years we've only fixed and flipped homes and we've been developing now for about a year and a half. And so we've really only known that world. But I set out to kind of prove a point to one of my students one time that you can create a business from scratch. And I set out to kind of show them that I can go out and get my own deals and all these things. And it really has turned into something pretty special. Last week we closed three deals just last week alone and we're on pace to close anywhere from five to 10 a month here in Phoenix. What's even more incredible is we're actually going to be opening up Colorado and possibly

Chicago here in the next 30 to 60 days. So if you're in Colorado or if you're in Chicago, make sure to email us at info at the science of flipping. We're gonna be opening up those markets to find deals and to wholesale deals, but also to rehab deals. Chicago's a great market right now. We have some friends and some colleagues out in Chicago just making a killing.

So we're going to be jumping into Colorado and Chicago. So to make sure, email me if you guys are in that market and see what we can do to put some business together. If you want to work a little bit closer with me or my team and maybe need a little bit of mentoring or coaching, again, email my assistant and go ahead and send it to info at thescienceofflipping.com. That's info at thescienceofflipping.com. I coach students all the way across the country in multiple different states. If you have an itch to take your business to the next level, if you're looking to just get started, I personally will be coaching you. If

that is something you have interest in, go ahead and go to the website, thescienceofflipping.com. There's a coaching tab or you can directly email my assistant at info at thescienceofflipping.com. Okay, the formalities are over. Let's get right into what I wanted to really get you guys going on today, which is for the most part, where, why, and how you start investing in certain areas. slightly about is one of my students who is actually out of California and it's a partnership is basically looking at the two markets that they're investing in and they're two different cities and they've been investing for quite some time and they make a very good income themselves but they're having some struggles because one market has kind of slowed down and another market has picked up and They don't want to leave behind one market just to go chase the hot market And so we've been talking a lot about what to do in a scenario where you know

Maybe the market that they're actually physically located in Isn't the market that's extremely hot right now But they know of another market where they either have some buyers already located or they have some colleagues doing really well or they have some feet on the street in a certain area and they know the market is picking up and really what to do about that because they're in one city, physically in one city with an office and that's where they live, but their investing business seems to be making a transition into another city, which isn't that close.

It's not that far, but it takes a little bit more of a commute. What I wanted to really go over with you guys today is whether you're first starting out and you're looking to become a wholesaler or buy your first fix and flip, or even if you're experienced investors like my students are, who are making a very good six-figure income, what happens, or I guess the question really becomes, where should you be investing? Okay, and I know on previous podcasts, I talk about where to find the zip codes and how to find all that, but this is really much more about where should you be investing. My first tip for you guys on this podcast is going to be one of the major ways to know where you should invest, and I've said

this on multiple podcasts, is go ahead and find where the cash transactions are. And the reason why I keep talking about that is you start to have multiple exit strategies, okay? And for all investors, whether you're a wholesaler or a fix and flipper, having multiple exit strategies is always ideal. And so what I would suggest doing is if you are a realtor, obviously go into the MLS and there is a way to do kind of an advanced lookup where you can find all cash transactions that have closed in the last six months or 12 months. So if you have access to MLS, that is very easy. If you don't have access to MLS, I highly suggest

finding a realtor who does and talk to them about what you are looking to do. Because at the end of the day, you really want to know where those cash transactions are because those are always investors. Now, some investors are looking for rental properties and they pay cash. Some investors are looking to fix and flip and they pay cash. So whether, again, you're a wholesaler and or a fix and flipper, you really want to have those multiple exit strategies, which you will have if you are dealing in zip codes or cities where there are multiple cash transactions.

That is probably the number one thing I would be looking for if I were trying to make a decision on where to invest. And the importance of that becomes, like myself, I've been a fix and flip investor now for seven years. And now that we have jumped into kind of the wholesaling business as a great side, I don't want to call it a side business, but it's another department of our business that brings in consistent checks, right? On top of the bigger checks, which is the fix and flips. We always want to know where are those investors playing. Because what you want to have,

especially if you're going to be going into a market that you may not be that familiar with, a different city that you've maybe never invested in, but you see all these cash transactions, you want to make sure that there's A, buyers there, but my second tip is you want to make sure you have some sort of feet on the street. You want to either have a wholesaler there that you know, you want to have another fix and flipper that you know, you want to have some real estate agents that you know. I highly suggest when you're looking at having multiple exit strategies or picking what city you want to invest in you have someone on the street again wholesalers real estate agents contractors other investors that way you can not only kind of bounce

ideas off them but make sure that you're doing the right thing in the right area, right? So I bring us back to my students who are in California, specifically in the Bay Area. And in their city that they're actually physically located in, there's fewer deals being done, but they're much bigger deals, right? And in the city where they see more cash transactions, they are having a great success finding more deals, but they're smaller. And so we discussed a lot about jumping into that market primarily because they know there's a lot of cash transactions happening, which means there's a lot of cash transactions happening, which means there's a lot

of investors in that area, which means they know that they can start creating a consistent stream of income that will then feed their bigger beast, which is their home territory, their home zip code, which they are finding few and far between, but bigger deals. And so I'm speaking to those rookies who may have never done a deal. And I'm also speaking to those experienced investors when I give you these two tips about you really need to find where those cash transactions are. Now, I know there's software out there. We're developing our own software to show you where those cash transactions are, and there's others that you can buy, but also the MLS does that for want to be going is going to be find where those cash transactions are and get into that zip code. The next thing would simply be is have feet on the street in whatever zip code. Now that zip code could just be five or 10 or 15 minutes

away from you. And, or that zip code could be two hours away from you. And if you are a virtual real estate investor, that could be a state away from you, right? It doesn't always mean it has to be that close. So if, again, if you're making a decision on where you should be going, chase the buyers. Find those cash transactions and chase those buyers because you know your deals are going to get done and that there's deals moving, right? So if you're fixing Flipper, you're thinking, man,

there's definitely wholesalers out there because these buyers are finding those deals somewhere. So at least I know I can get those deals and there's probably some wholesalers I can network with to buy some deals from. So chase the buyers, chase those cash transactions, but then also rely on the fact that you probably want to have a couple feet on the street. And if you don't have feet on the street, it can make it a little bit more difficult. However, if you don't have feet on the street, but there are high cash transactions, I would still make the argument that would be a good zip code or city to start your investing or to continue your investing or to move your investing into, right?

The same way I mentioned at the beginning of this podcast, Phoenix is an incredible market to be a real estate investor. Like I told you, I just closed three deals last week on the wholesale side of our business. But it doesn't mean it's the one and only market that I'm willing to invest in. We have a great opportunity in Colorado. We have a great opportunity in Chicago. So we're taking our business and we're implementing the same systems in those cities, which happen

to also be in other states so i really advocate again whether you're just starting out or you're an experienced investor start looking or dealing with one of two things you either need a team around you in an area or a zip code or a state that you're going to be investing in, or you need to know that there's other investors buying cash deals in that area. And that's really what I would highly suggest focusing on is making sure that you have one of the two things in that area. Because at the end of the day, if you have one of those two things, you have multiple exit strategies that you can use, right? You have realtors, you have contractors, you have wholesalers.

You have some sort of feed on the street that will give you multiple exit strategies. And at the same token, if you have cash buyers buying a bunch of properties in a certain zip code in a certain city, you know that you can either buy it yourself you can wholesale it out you'll have multiple exit strategies to deal with so really today guys that's what i wanted to to kind of hit home with you is to make sure you focus on those two things in your business when making a decision on what type of or you know what city or zip code to jump into because I can't tell you how many times I've had conversations with students

who they just jump into a zip code because they think it's a good market to be in. And I say, well, why do you think that? And they say, well, it's a really expensive zip code. People just wanna be there. Well, that's fine and dandy, but that doesn't mean it's a really expensive zip code. People just want to be there. Well, that's fine and dandy, but that doesn't mean it's a great zip code to be investing in or wholesaling in or flipping in.

You want to make sure that there's solid reasons and there's solid data that shows you why you want to be in that market. The same reason the Phoenix market is so hot. There is solid data on why people want to be here, right? We went skyrocketing up in 2004, 2005. We also came crashing down in 2006 and 2007 and 2008. And it went to all-time lows, so a bunch of investors came in here. When the investors come in, that's showing you the data that this is

a great market to be in. And that's also what's happening around the country. There's certain markets in St. Louis I know of. There's certain markets in Ohio I know of, Chicago, Colorado. I know of certain markets that are absolute great markets to be in. But I know that because I would either A, have the data to show it or B, have feet on the street that can tell me and support me and give me some of that data that says, okay, I need to be in that market. So again, that's what I got for you guys. I really want you guys to focus on those two things when deciding on what zip code and or city and or state to be investing in. It doesn't matter if you're a rookie and you've never done a deal all the way to someone like

some of my students who are making well into the six figures, have a very good business, but have had to make a decision on where to focus their attention. So we've had a lot of phone calls regarding this subject. And I keep going back to look at the data. Do you have people there to help you? And if so, go after those cash buyers. So that's it, guys. This has been the Science of Flipping. I have been your host.

Again, what an incredible podcast. The real estate market is red hot. It is the best time to jump in. If you need a little help, if you need a coach, go over to the website, thescienceofflipping.com. There's a coaching tab there. Click on that, put in your name and your email, and I'll make sure we get right back to you. Or you can personally email my assistant at info at thescienceofflipping.com, and I will personally handle your call. I look forward to

talking to all of you guys and that is all we got today for the science of flipping. I'm out of here. Peace.