You Are Here: Home » Wealth » Grow Money » Lessons from a Flipper

Lessons from a Flipper

Being part of HiREI has many benefits, and one of them is being part of the women’s group, Hawaii Women Real Estate Investors (HiWIRE for short).

The October HiWIRE meeting was sparsely attended with Gary DeBose as the featured speaker.  Gary has done hundreds, if not thousands of deals, most of them using other people’s money and other people’s talents to find/purchase/fix great real estate buys, and sell at large profit margins.

Gary’s style of presentation borders on insulting, and he admits that from the very start.  You may decide to bolt out the door, but Aunty sat her butt down and stayed put.  It was a good decision even though Aunty’s strategy and long term goal is buy and hold, cash flow rental income from real estate.

Aunty’s notes were very sparse because he talked a mile a minute and his figures, calculations, and projections were presented in rapid fire.  The gist of it all was that you could make excellent money buying low, fixing and/or repurposing, and then selling high.

Cash flowing rental real estate is not his goal

His goal is to buy, fix, sell – quickly, cheaply, for as much profit as possible.

One current deal that Gary is working on is a hotel complex – Holiday Inn in a semi rural area on the mainland near a freeway.  This Holiday Inn was losing money because of poor occupancy.  Using $3,000,000 of investors’ money, Gary secured the title wrapping around the seller’s mortgage (strategy that Aunty has never done), is in the process of renovating the entire complex into a resident care facility (senior citizen home), renting out units until fully occupied and cash flowing at $64,000 per month, and then selling it for $23,000,000.  This will net his investors more than double of their money, and a very tidy profit for himself.

This was Wowza.  Very Wowza.

Gary has the vision, know how, and fortitude to max out profit, and he does it with a set of formulas and street smarts to get it done.

However, this was NOT a case of, “if he can do it, anybody can do it.” 

No, because Gary lives, breathes, and consumes real estate.  He puts in a lot of time, talk, and non stop thinking, planning, negotiating, implementing, teaching, growing, presenting, traveling, and juggling.  He has a team of hundreds working with him.  He is a bulldozer.  A very admirable, somewhat abrasive, brilliant bulldozer.

Two ways to join

One of the ways to join Gary’s team is to be a finder of deals.  This means you are doing a lot of research, knocking on doors, finding distressed situations, running numbers.  If it turns out to be an acceptable property that turns a profit, you get paid a nice fat fee after the property is sold.

Another way is to put money in Gary’s hands (via escrow) and ride behind the bulldozer with him.  Results are not guaranteed, but you do get to pick your deal.  In some cases, you get paid your portion back plus a tidy return in weeks.  In some cases, it may take a couple of years (the Holiday Inn example).

Aunty in the wrong strategy?

After hearing Gary’s presentation, Aunty’s world felt a little knocked over.  It seemed to make so much more sense to flip real estate rather than rent and hold.  The ROI (return on investment) can be SO much higher doing flips rather than rentals.  Why buy and hold for returns of 8%, when you could buy and flip and get returns of 20%, 50%, 200% or more?!

Aunty found herself in a quandary – a state of uncertainty.  Not a good feeling for Aunty.  Should we be flipping instead of going for cash flow?  Aiyaayaa (pronounced eye – yah – yah) – aiyaayaa!

The very next day, as if the sound of angels’ harps strummed through the air, a calmness came over Aunty, and her world was righted back to square.  It came after reading a quote in one of the many (many) newsletters that come into my email inbox last night:

“Everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.” – Marcus Aurelius

Aunty can buy/hold/rent and be okay.  Gary can buy/fix/flip and be awesome.  That was a very nice A-ha moment.

Stick to your guns, even if they are slow

There are several pros and cons for flipping or renting for real estate.  [note to Aunty (and please remind Aunty if she forgets..) – write a more detailed post on those pros and cons.]

Most of the speakers that have programs or a call to action for you to join are flippers.  Flipping is a rush.  It is exciting to buy low and sell high.  It is fast money – you get a return of you money PLUS a nice sized profit in a short period of time.  It works beautifully, until it doesn’t.  Robert Kiyosaki (Rich Dad, Poor Dad fame) calls it linear income – you do a deal, make money, and in order to make money again, you have to do another deal.

Buy and hold income, on the other hand, is not fast.  It is slow, but steady.  Successful rental real estate will continue to pay you with rental income month after month, year after year, whether the value of the property goes up or down.  It’s not exciting, but having cash flowing rental real estate in the right places helps you sleep at night.

Aunty learned not to share what she does with flippers

The reason is that experts who do short term flips can poke enormous holes in Aunty’s and Uncle’s portfolio and strategy.  They would be absolutely right in their analysis for their own intentions.  They would be not right for ours.

Besides Robert Kiyosaki’s sage advice, Aunty also pays attention to Jeff Brown of BawldGuy.com.  He builds a blueprint for clients ($3,000) – even for clients that don’t always follow his advice (ahem, perhaps Aunty needs to learn to listen to him better).  Please read an article he wrote for Bigger Pockets back in May 2012, “What’s your End Game?”  This was an excellent article about investing to grow funds rather quickly in order to be able to slow down later.

Flip to make money

Does Aunty ever do flips herself or with others in joint ventures?  Yup, you betcha.  The best way Aunty has found to do short term flips is in a checkbook Roth IRA because of $0 taxes, and zero tax filing requirements.  Zero!!!

We sometimes flip in joint ventures by forming an LLC in Hawaii (cheap – lucky we live Hawaii).  Our Hawaii LLC goes into a contract as a partner, or sometimes just as a lender, the controlling partner does all the wheeling, dealing, arranging, paperwork, etc. and at the escrow closing or other agreed upon time, we get our investment back plus profit or dividend (for which we file on our tax return and pay taxes).  Gary DuBose could be someone that we would invest money with – if and when we have enough to do so with.  His minimum investment criteria is $100,000 with potentially awesome returns.

What Aunty learned

Gary DuBose is a certifiable and proven expert that knows how to make a ton of money flipping real estate.  He flips for his income, we do not.  Regardless, Aunty is grateful for the information that he shared with us at the HiWIRE meeting.

Of great value to Aunty are a couple of tools for evaluation that he gave to us:

bestplaces.net is a website that is free and very useful.  Enter the zip code of the area that you want info on in order to see tables listing by population overview, statistics, and info galore.  For real estate purposes, select the “Housing” link.   Make note of the information given for the average household size (HS) and average household income (HI).  These numbers are specific to the zip code that you input.

Apply these numbers to Gary’s formula of HI/HS x 1.85 x .31.  In human talk, that is Household size, divided by Household income, multiplied by 1.85, and then multiplied by .31.  Divide this number by 12 to get a monthly figure.  This monthly figure is what you could expect to get as monthly rental for an average 3 bedroom house.

Next, go to rentometer.com.  Enter the zip code or address of the property you are researching and input that number (expected monthly rental) into the rent/mo box and the number of bedrooms of the unit.  This website will compare your property to others in the same neighborhood and show if it is too low, too high, or just right.

Another great and very simple tool to find out what your mortgage payment will look like for any loan amount at a specific interest rate is Karl’s Mortgage Calculator.  This is an easy way to find out what your mortgage principle and interest payment will be – taxes and insurance are not included.

Mahalo to Gary and HiWIRE

Aunty did not go this month’s HiWIRE meeting with any expectations other than meeting up with Martha to give her a book (The Slight Edge by Jeff Olson), and to socialize with the other wonderful ladies.  It turned out to be a powerhouse meeting that had me wired (oboy) for hours after because of SO much information from Gary.

Gary does have a website:  thedealfunders.com with his contact info and upcoming events.

Aunty is very glad that she set herself down, put on her listening ears, and came away with much more than when she arrived.  Gary even sang his latest marketing jingle – what a great voice!

In retrospect, Gary sorta kinda looks like Honolulu Bulls head coach, Phil Neddo.  Both are bulldozers, both are fearless, both are sons of preachers.  Hmmmm.  I wonder if Phil can sing?

 

Gary the deal funder

Gary the deal funder

Phil the soccer coach

Phil the soccer coach

About The Author

Aunty is a new senior citizen and loving this phase of her life. Less responsibilities, less fear of being weird, able to do more of the things that I want to do! Older, yes, slower, yes, but life is even more wonderful in my golden years and I look forward to even goldener ones.

Number of Entries : 371

Comments (11)

  • Jessie

    It’s unfortunate that people have such a negative view. I’ve worked with Gary and his wife for years, and they are genuinely the most nicest of people that you meet. The problem with people is they cannot handle the truth. For him to speak truthfully from the very beginning should only leave you with a very open mind. To be negative about it is to be self centered wanting to hear only what you want to hear.
    He is a very intelligent man and a very hard working, loving family man as I have seen so many times. His intentions are only for the best for each person that he comes in contact with. It’s all about how much you want what it is that you want and how you’re going to get there. Either by applying his techniques or using the skills that you feel is right. He does not force anything on you, it’s ultimately you’re decision on the choices that you make. They are a very successful couple that worked hard for what they have and are obviously not greedy or he wouldn’t be sharing his knowledge gained thrum the many years of doing what he does.

    Reply
  • David

    Gary DuBose is a blow hard deceiver and a con man. He is an arrogant ass of the highest degree. Only a fool would listen to this conceited ass

    Reply
    • Aunty

      He is a bit hard and harsh, which can be a turn-off to people who take it personally. He talks a mile a minute, nonstop, and admits from the beginning that he is “in yo face”.
      btw, others have also expressed extreme negativity towards him in recent comments, but for the sake of keeping it “clean”, Aunty has trashed their comments since they were extremely mean and degrading.
      Hope your current and future deals turn out well,
      Aunty

      Reply
      • David

        Gary lied, deceived and showed his true nature in Texas in 2013. He stole privy information from the Murphy Oil company. He disrespected people. He is a rottin asshole. He is the biggest arrogant asshole on the planet. God damn Gary DuBose and God damn you for promoting him. May you rot in shit and die of AIDS.

        Bleep (Aunty’s edit) you and bleep (another Aunty’s edit) the entire Dubose family.

        Reply
        • Aunty

          Sorry to hear of your misfortune. Hope it gets better for you, truly.
          I write my opinions, you write yours.
          Peace be with you,
          Aunty

          Reply
  • Gary

    Thanks for the article and the fun.
    Aunty you are welcome to classes free any time and come hang for a day. Gary D.

    Reply
  • Peggy J

    Thanks Aunty. This was all very helpful. I especially liked the “What Aunty learned” section.

    Reply
  • jalna

    What Gary does is not jus’ Wowza . . . it’s Ballza . . . not for the faint at heart. Me . . . I still trying to decide if I should start wearing lipstick or not . . .

    Reply
    • Aunty

      Aloha Jalna,

      Yep, Gary has Ballzas. BIG ones, lol! Sometimes riding on those guys’ coattails can be very profitable. Risky? Just a bit. He does know how to do his research and get the biggest bang for the buck.

      Aunty ALWAYS wears lipstick – feels naked without it. If you do try the Color Stay one from Revlon, it really will stay and stay and stay. Gotta use my makeup remover to take ’em off! I kinda like that.

      Mahalo for your visit! I go to your photo blog site ALL the time to get my lift for the day.

      Aunty

      Reply

Leave a Comment to Peggy J

© 2016 HonoluluAunty.com

Scroll to top