In this 2022 YouTube video, seasoned investor, broker, and mentor Joe Homs addresses the four most frequent questions he receives from novice real‑estate investors. He explains that flipping is always a numbers game, emphasizing the need to calculate purchase price, rehab costs, closing costs, and target profit regardless of market cycles, and notes he flips more when markets are down. He discusses the pros and cons of out‑of‑state investing, recommending investors stay in markets they know, and if they must invest remotely, to rely on trusted local partners. He then walks through the process of buying properties that already have tenants, covering tenant communication, cash‑for‑keys offers, eviction procedures, associated costs, and how to factor these into the deal analysis. Finally, he defines turnkey properties, explains why they are generally unsuitable for investors unless used as an appreciation play, and advises against buying them for cash‑flow purposes. Throughout, he provides practical tips, cost figures, and actionable steps, while encouraging viewers to comment, watch related videos, and reach out for mentorship.
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In today's video, I'm going to talk about the top four things new real estate investors ask. Coming up next. Real estate is one of the most profitable investments that you can make, but it can also be the most costly and complicated if you don't know what you're doing. As a longtime investor, broker, and mentor, I've learned a lot along the way. Friends, peers, and new investors often approach me with the same question. Questions when considering investing for the first time. Let's get some of those answered. Are you looking to live the life you've always wanted through real estate? Well, you came to the right place. I have over 40 years of experience, so make sure that you subscribe so that you never miss a video. Is now a good time to invest? I get that question all the time, and a flipping business is basically a numbers game, and depending on the market, if we're high, we're low, You're just building in that equity position there so that you have enough room from the purchase price, the rehab, closing costs, to the end of the day, how much profit you want to make. Really doesn't matter if we're at the top of the market or at the bottom of the market. Flipping is still a profitable game. Do I flip as many properties when we're at the top of the market? Probably not. Because when it goes down to the bottom, I'm flipping 4 to 5 times more because I can buy 4 or 5 times more. So just remember, flipping is a numbers game, but make sure you know your numbers. Let's talk about number 2. Should you invest out of state? And I guess that's really kind of a personal thing. If I don't personally invest out of state, and the reason I don't invest out of state is because if I were to go out of state, then I would be like, everybody else. I like to be in an area that I know, that I'm the expert in that area. Anything comes up for sale, any properties, I pretty much know whether it's going to be a good deal or not. If I go to any other state, I'm not that expert anymore. I don't know what's going on in another state. That's number one. Number 2, really, do you know what you're doing? I would start in-state Trying to flip something close to you in case you run into any issues, you're able to go out there and take care of whatever issues they are. If you're flipping across country, that's an airplane ride. That's something that you know maybe you're not going to be able to address as quickly as you would if it was something local. So for me personally, I don't flip out of state. That's the decision that you're going to need to make and really up to you. If you do, I guess tip number three: if you do flip out. Out of state, I would look for somebody that is going to be your eyes and your ears. A family member, a college roommate, somebody that you know, that you trust, that lives in that area that can go by and take a look at these properties for you and maybe even manage the rehab for you as well long distance. So remember those kind of 3 little tips about investing out of state. Number 3, should you buy properties with tenants inside? I buy properties with tenants inside. I think that sometimes I get the best deal when there's tenants inside. But you have to remember, you have to know what you're doing. Okay? First thing I do is I approach the tenants and I ask them, hey, when are you moving out? You obviously get answers from, how about 3 months? How about 6 months? How about never? All those you have to deal with, okay? And I go through a normal process that I go through. I try to be as courteous and helpful as possible. Door knock, talk to them in person, let them know that you'd like them out as soon as possible, and deal with that situation. If not, then you go, okay, well, this is my process, okay? This is not adversarial or threatening or anything. This is just a process that I use. We're here having a nice Nice conversation. If you can move out, great. You can't move out? How about this? How about if I offer you some money? Cash for keys, we call it. So let's say they're renting in an area where they're paying $800 a month. I'm offering them $5,000 to get out. That's almost 6 months of rent. They're going to look at that, they're going to say, you're going to pay me 6 months of rent to get out like next weekend? Yes. I'm going to do that. Okay? Obviously I built this into my formula and I'm going to be good at the end of the day paying them their $5,000. But at the end of the day, sometimes people just say no. Okay? And especially after the COVID situation, and thank God we're out of that at this point in time, but they were saying no and they were staying in there and they were protected by the state, the federal government, city governments. All of them were protected, but all those protections are gone now. Okay, so my next process, and I tell them this, is I'm going to start an eviction process. Okay, the eviction process for me, I hired a professional eviction attorney. It costs around $1,000 and maybe a little bit more now, $1,200 to start that eviction process. The filing of the paperwork, the actual filing a notice with the tenant, All that's about $1,200. It's actually less expensive for me to file an eviction, but like I tell them, at the end of the day, if I file this eviction, that goes on your permanent record. If you're going to go from here, which you are eventually going to go from here someplace else, if somebody sees that you've been evicted before, do you think you have good chances of renting another place? Probably not. But again, that's up to you. And then we just go through the process there. 9 times out of 10, they're out before Before the sheriff comes over to evict them. But there's always that, you know, 10th time where the sheriff is really knocking on the door. And at that process, it's a lockout process. They take possession of the property. We literally change the locks on the door, and then we take care of everything inside the house. It's put into storage. They want it back, they have to come see me and pay me for it. Okay. So that's the process with tenants. So know what you're doing when you're buying properties with tenants. Okay, it's great when you have a seller that has a tenant that's not cooperative. So instead of offering up here, you're offering down here because you need to take care of this issue. Okay, you may be even offering even less, but you know you're professional and you can take care of this and make that much additional money on that profit, on that property in profit. Should I buy a turnkey property? Well, I guess let's define what a turnkey property is. A turnkey property is basically where I'm filming now. This is a product that we just finished and it is literally, you turn the key on the front door and you walk in and you move your stuff in. That's a turnkey property. So it's It's not something that I do. I make them turnkey to sell them at the end of the day because I know a lot of people like to buy turnkey properties. Most of those people are end users, what I call people that are going to live in the property. They're not investors. So investors are looking for this property that needs to be rehabbed and then turn it into a turnkey property. As an investor, honestly, there's really, in my opinion, there's no way reason to buy a turnkey property. The only reason to buy a turnkey property is if you're buying from a builder, let's say, and he's building 10 phases and you happen to get in on the first phase. Okay, you know, by the time that he builds the 10th phase, the property you paid for it, let's say $500,000, it may be worth $750,000. Phase 10. Okay, so that's a good time you can buy turnkey, but that's really kind of an appreciation play. And instead of buying an investment property, you're really betting on the appreciation from the time that you buy to the time that you sell it. What other questions do you have? Leave them in the comment section below. Good investing requires a knowledge of the market as well as dedicated analysis. Start today putting in the work to understand the different exit strategies and opportunities in your market. If you're new to investing and want to know if it's still a good opportunity to flip in 2022, click on this video right here. As always, feel free to reach out anytime. I'm always here to help.
