Video Closed Captioning:
good morning good afternoon good evening
folks michael zuber one rental at a time
back with his real estate entrepreneur
omar alfaro how you doing buddy good
what’s up michael what’s up everybody
how much buddy so again uh welcome baby
girl number three mr girl dad oh yeah mr
girl that’s right there you go
congratulations to you and your wife uh
video number two is going to come
straight from your instagram page invest
with omar i’m so glad to see you spin up
this page and really post more and more
content
uh
let’s talk about it is flipping dead
because if you’ve listened to my channel
you know i have a pretty negative impact
on the housing market transactions
crashing rates going up it’s a disaster
so i gotta ask dude is flipping dead
it
um it’s it’s to me it’s not
um you know it’s is it it’s for the most
or for the for the majority of people
out there that are trying to get into uh
in flipping because i am specifically
talking not to the seasoned ones i’ve
been doing it for 10 15 20 years okay
i’m talking about the
flipping that is that just got started
the flipper that just got started as a
two years ago yeah as of 36 months ago
even a year before the uh before 2020 um
there’s been a lot of changes obviously
like you’re like you came you came in in
2019 like okay i’m brand new i’m a new
flipper
and then all of a sudden in 2020 you’re
you became a professional yeah
you could do no wrong you could do
exactly like i’m you know i’m grabbing
every single thing that you can get and
flipping it and making a crazy profit
you know the market helped you there so
i would say there’s two parts to this um
is flipping dead in some cases it should
be
it should be in people’s perspectives if
you’re not ready for it
but the other avenue is i think it’s not
dead because you’re still able to
provide the solution the seller uh
remember when you flip a property your
profits made at the purchase absolutely
your profits always made up the purchase
because you have to factor in
you know the the volatility of the
market if it’s going to go down if you
have more competition if it’s specific
area location whatever the case is so i
really want to say that um
it’s not
but you have to it’s going to be
asterick because you have to really know
like your exit strategy up front you
really have to know you know what margin
you’re at i mean if you’re if you’re
doing it for twenty thousand dollars let
me just take you down one road real
quick
if if you’re doing it for fifteen to
twenty thousand dollars on a flip okay
that’s a lot of capital that you’re
putting into to receive a small minimum
amount
and and i’m talking to the real estate
professionals the agencies out there um
if you hone in on your crap you can go
get a you know a 14 or 13 000 commission
check and go do two listings and that’s
a lot safer than a flip because the
minute you think you’re gonna do it
that’s where it’s gonna punch you in the
face and
guess what’s gonna happen you’re gonna
make five grand you’re gonna make a
negative and if you break even consider
that a win because
this is what’s happening right now in
this in in in my current area i can’t
speak for everybody else’s but
in my spot yeah so
i love this topic so i guess from where
i’m sitting kind of talking to all
different skill levels i want to be very
clear i think flipping is dead for most
of you
you know you don’t have to like that but
that’s what i think
uh i’m lucky enough to talk to four very
successful flippers on my channel every
week yourself included
this is my
kind of summary
of what all of you are doing
one you have all tightened up your buy
box
right some of you
over the last couple of years you
started going farther and farther away
because you had too much competition at
home
all of you seem to be
tightening up location
second i am not currently talking to
anybody who’s flipping above the median
half of the guys half of the teams that
i’ve spoken with
about half their business was above the
median in 2020 and 2021
all of them have cut that out all of
them have projects a couple of them are
finishing projects they won’t touch it
again so everybody’s going super safe
three
they are they’re in buyer
most of most people now when they are
designing their their their end product
their target is an fha buyer yep all day
right so again an fha flip is very
different than a
you know dual income high income net
worth you know buyer very different
fourth
um most of the flippers i’m working with
now in their arv calculation
are now including
three percent seller credits on the exit
100
so like hey if my arv is 300 on the exit
i have to whack ni i i’m planning to
spend nine grand and if you don’t it’s
profit but they’re all penciling this in
and then lastly
and most importantly
every flipper i speak with
is taking current arvs which they’ve
counted on for years and whacking them
15
all day
great spot
so again think about all and now most of
you heard that list and you’re like
michael i can’t make my deals work
go back to point number one
most of you should not be flipping today
you can’t do all of that stop
you’re good why why do a flip to lose
money
it’s not worth the aggravation there are
many of you that are in flips right now
that you are going to lose money and you
won’t take the small loss the biggest
mistake a lot of my flippers who were
making big money last time
a couple of you didn’t take the 20k loss
and you ended up losing 100k
oh
100 and you think that like okay
michael you know what maybe you haven’t
lost a lot on any flips you which but
you do have norris drive which is your
alligator oh yeah
i made plenty of mistakes i’ve only
flipped for two years and they were the
best years and the market made me
straight up right okay
i got caught obviously and i’ll be
honest with you this whole arv thing
okay my arb was only at like five or ten
percent under uh this was you know four
months ago
and
i saw something coming but i also saw
like okay well there’s still no
inventory in this specific area
so
long story short now i’m on the market
and i just cut one of my properties by
20
and it’s still not moving so you just
mentioned taking this small 10 or 15 000
loss to move the product to move your
inventory and then readjust and make it
up on the next one that’s exactly what’s
happening right now and that and i’m not
gonna lie that when it comes to
investing over the last you know 12 15
years
you want to get to a point where you
where you lose hundreds of thousands
because you’ll make millions
you’ll lose thousands to make hundreds
of thousands does that make sense and i
want you guys to really pinpoint that
well michael was saying just now about
the arv
everybody i’ve been factoring closing
cost credit
before this thing even like had uh you
know
the the it had the the workings of like
something’s happening right so i started
giving away closing costs credit people
were asking me why i’m like because i
want my product to be gone yeah i bought
it off the books exactly right and some
of them now i’ll tell you this right now
if i didn’t give them closing cost
credit they i would still be on the
market
exactly and then
in a problem
and i got out still making you know
close to the the the six
six digits but
on on a couple of these
but if i didn’t i’d be you know 45k
yeah again you’ve again i want to go
back to the question in the hand is
flipping dead and i’m going to be very
clear for most of you the answer is yes
90 yes and the second
you guys you guys are not changing
you’re buying it is all made at the
purchase
if you are not factoring in again i want
you to these are the best and the best i
had the best flippers in my market on my
channel last weekend of the week before
evc homes shout out aaron and cletus
they’re like michael a we’re not doing
million dollar flips anymore which again
in my market is 2x the median these guys
are rock stars they’re doing a million
dollar like one and a half million
dollar flips like not doing that again
two michael we are factoring in three
percent closing costs every time into
our numbers three we are taking our arvs
which we are really really good at
really really good at and we are
whacking them 15
and if we can’t get the numbers to work
we’ll just wait
so again the last thing i would say
about flippers if you are going to keep
moving forward like omar
make your portfolio smaller
don’t risk as much
the next 18 months are going to be very
very interesting in housing
again your market dude you could see a
50 crash in transactions easy
and and that right there is gonna be
insane
yeah think about that does to your day
business your flip business and again
the beauty of all of this
is you the real estate entrepreneur you
will come out of this stronger you will
take a couple of l’s
because you got as it pivoted you will
be much better through this and you come
out the other end all these wannabe
flippers these one and dones they will
be long they will be baristas at
starbucks
you’re calling it yeah so it’s gonna be
a lot of fun watching you man
it’s it’s cool i i definitely want to
add another you know view to the
portfolio this is where creative
financing is going to come into play
absolutely
you know and that’s something we can
talk about in another video there you go
thanks buddy where can people find you
and what’s your id ig page that had this
great topic
uh invest with omar that’s the new ig
page go follow me there and um look for
all the real estate info there you go
thanks buddy you’re welcome