Mike Got Over the Fear of Failing and Mastered Rehabs AND FlipsReading Time: 6 minutes
Mike knows what stands in the way of individuals becoming investors… Fear. And he refuses to let fear stand in the way of finding Houston Investment Property or his path to success.
He is currently a part-time investor as he builds his real estate portfolio. Instead of focusing on one type of investment strategy, he finds a property and then decides what strategy works best for that property.
Whether Mike is holding on to a property for a long-term investment or selling for a quicker return, he knows the importance of rehabbing the property. He likes to “wow” potential renters or buyers and is willing to put the time and money into improving the kitchen, bathrooms, and flooring. And a fresh coat of paint is always a must.
Mike visits MyHouseDeals.com daily to search of potential deals. This is where he found his recent fix and flip. We recently sat with Mike to learn more about this deal, his experiences with rehabs, and his overall investing strategies.
Listen to our conversation with Mike during which he talked about this deal, plus…
- How to overcome the fear of getting started in real estate investing
- What makes a good rental property versus a fix and resell property
- Tips for accurately pulling comps on the MLS
NOTE: Since Mike is a Premium Elite member, he received a FULL refund of his up-front membership fee for simply doing a deal! Find out more about our Premium Elite membership here.
Read the full story here…
Tell Us More About Yourself…
Do you consider yourself now a part time investor, or a full time investor?
I still consider myself a part time investor since I still work a full time job.
How many hours a week do you think you spend on your investing career?
Probably 30 hours. It’s a whole lot of time. I work weekends.
What motivated you to be a real estate investor?
I was looking for mailbox money quite literally.
Was it difficult to take your first step?
It wasn’t too difficult since I actually had experience with doing a little bit of remodeling simply because I have a construction guy that has done work at my house.
How did you go about starting and educating yourself?
I found my first property in the 77015 area code, near Channelview. I simply researched the MLS to find it the first time. I wasn’t buying any type of wholesale properties. I just went willy-nilly and looked for the cheapest thing I could find to fix and rent.
Is that a strategy you would still recommend?
There’s investment properties everywhere. MyHouseDeals is a great one. HAR.com is still a great one. They’re everywhere. All you have to do is pay enough attention and do a little research. You can find them all over the place.
When you’re looking for properties, what are the parameters you search for specifically?
Yeah, no. The best thing you can do on the MLS is, if you are working with a real estate agent already, and you get the backdoor access that the real estate agents have, then you can actually search by square foot for certain regions and it will pop up the better deals.
Even though your primary strategy is buying and holding, what made you get into flipping houses?
Some areas in Houston are better suited for flipping where people seem to be more willing to buy than they want to rent. I flip properties in those areas instead of trying to rent them, which didn’t seem as advantageous. If the price of the house is too high, rents aren’t that great. It’s better to flip there. If the price of the house is low, but rents are strong, it is much better to rent there.
What do you do to build up your real estate investing education?
I still read books and I read all the material coming through the Internet. I browse all the time. I stay in close contact with my real estate agent. Above and beyond that, it doesn’t change too much.
In terms of your success, what sets you apart from other investors?
I think most people fail from fear. It’s just fear that holds them back. I know other people who have the money and have the time, but have the fear of losing the money. The reality is, in the property world, you really don’t lose money, especially in rentals.
What’s your advice for people who have fear?
You have to take a deep breath and move forward. Otherwise, you never go anywhere. Fear paralyzes. You just have to do it.
Tell Us More About This Deal…
What kind of property did you look for on MyHouseDeals?
Always single family residence. That’s all I ever look for.
How did you choose this deal in particular?
When I looked at it, it appeared to be financially sound. It didn’t need a massive amount of upgrades. With the dollars to purchase, the dollars to repair, minus the after repair value and all the fees, it still allowed me a reasonable amount of profit. I don’t know if people get this 30% I seem to hear about, but I’m living and happy at 15% to 20%.
Where the numbers accurate for this deal on MyHouseDeals?
For this property, the numbers were actually pretty close to very accurate. You can’t trust anything. You should always verify yourself. You can ask other investors to make sure that what you’re doing actually makes sense. But, don’t trust anybody. Do it yourself.
How did you pull comps for this deal?
That’s easy. Just go on the MLS once again. You can see the sold listings and the for sale listings. You can see the options pending and compare the houses on an average per square foot. Also, take a look at the upgrades inside the houses. If you’re going to build a house superior and sell it for just above those other markets, you should be okay.
What made this deal a good sale?
The purchase price plus the repairs left a lot value equity. The rent would have taken years to come out, so this made a lot more sense to go ahead and purchase and sell.
How much rehab did you do to the house?
It was about $40,000 worth of rehab. That’s labor and parts, kitchen, new cabinets, bathrooms, flooring, and paint. I like to touch everything. That way I know that when somebody walks in, they’re stunned.
For the most part, I don’t like to buy anything that I don’t do everything to. I like to paint everything. Paint hides a lot of ugliness. I like to do floors, paint, and kitchens, and bathrooms. I try to do it all every time.
Tell Us More About Your Strategies…
How has your financing strategy changed since you started invested?
I have actually always been able to use cash since I work a second job, I have been saving money for years.
How many properties do you look at before you find a property you like?
You have to look through 30 to 50 properties to find the one that suits you. I don’t know every area in Houston. I only know the areas that I know, so I focus on those. I pay attention to the houses in those areas.
What is most useful about MyHouseDeals.com?
I like to be able to sort by zip code and have a range of how miles away from the zip code I allow it to get.
If you were going to have a conversation with yourself today, before you did your first deal, what advice would you give yourself?
Look closer for termites. That surprise has hit me several times. I just went through it again here in Channelview. Nobody could have found these. They were in the wall. There were no signs until we pulled the wall apart to change the windows. All of a sudden we are re-framing a quarter of the house. It comes with the territory.