Ashley:
Today’s guest spun a $0 down starter home into a surprise 50 k profit, then turned those funds into a $92,000 tax-free payday,

Tony Robinson:
But then almost nearly lost everything to a nightmare flip. So stick around slurring the exact moves and the mistakes that can launch or sink a rookie investor.

Ashley:
This is the Real Estate Rookie podcast. I’m Ashley Kehr.

Tony Robinson:
And I’m Tony j Robinson. And today we’re joined by another Tony. Tony, thanks for joining us today, brother.

Tony Borman:
Thanks so much for having me. Appreciate it.

Ashley:
Okay, so let’s start off, when you first walked into that 1950s Jacksonville Fixer Upper, what hit your nose? What did the walls look like? Tell us about this property and how baroque you were feeling right when you walked in.

Tony Borman:
Yeah, absolutely. So this is a handful of years back. My wife and I were young, early in our careers and decided it was time to try to buy a property. So this was every bit of house we could afford, probably a little bit that we didn’t. And yeah, the place was in rough shape. We got it from a guy going through a rough divorce, and so it was like grimy, just needed a lot of TLC and a lot of love, so nothing super major. It was pretty cosmetic, but it just needed a lot of TLC.

Ashley:
So how did you purchase this property? What did the funding look like for it?

Tony Borman:
Yeah, so like I said, I mean we were young and broke. We actually didn’t even put any money into the down payment on this one. We did a three and a half percent down loan, but we actually borrowed that 3.5% from my father-in-law. So we had $0 into the deal. Like I said, the mortgage payment was everything we could afford, so it was scary.

Ashley:
So after you’ve got this property, tell us about you and your wife walking through it. You said that it was in somewhat disrepair. Describe it for us.

Tony Borman:
Yeah, it had really good bones and cool character. 1950s house in Jacksonville we’re kind of outdoorsy kind of people that had a big yard with really cool big trees on it, and so we really kind of fell in love with what it could be, but it had a lot of work to be done to get there. Really. The other thing about this house was part of us being able to just barely afford it. This house was actually right on the fringe of a pretty rough area, Jacksonville, so that was kind of another curve ball of this house that made us feel a little uneasy.

Tony Robinson:
Yeah. So you had location as one potential challenge, but you also mentioned several times already that you probably couldn’t afford this house when you bought it. So on the day that you guys actually closed, what maybe disaster scenarios were running through your mind and did any of those actually happen?

Tony Borman:
Yeah, great question. So when you buy your first house, there’s all kinds of unknowns. You don’t know what you don’t know, and it’s kind of just the overall, the overarching what could happen. As an example, one thing that we really struggled with at that property was it was on a well pump providing all the water to the house, and that pump gave us all kinds of problems, that whole system and whenever it went out, we didn’t have water to the whole house and no money to get the plumber out there. So those are kind of the times where you really had to grit your teeth and get through it.

Ashley:
I had a similar situation at a property where I had, and this is lucky enough, it was my business partner and he was going to move into one of the houses on the property and he was going to rehab it while he lived there. The day he moved in, we had no water, and it ended up the well was dry, which is not a very common thing to happen around us. And so he lived between there in an Airbnb, he’d go and shower and stuff, and he actually bought a Lowe’s bucket with a toilet seat, and that was his bathroom for a couple of days while all of this was being repaired. So I can understand your frustration of not having the water. And then once they kind of figured things out, they’d take the bucket of water from the pond and then dump it into the back of the toilet and stuff and got really crafty with it and it’s like, geez, thank you for taking this sacrifice for our business. I don’t have

Tony Robinson:
To do that. Where’s the social content with this Home Depot’s toilet seat?

Ashley:
You know what? I’m going to find a picture. I know there’s a picture of it somewhere. Yeah,

Tony Robinson:
That’s the stuff you don’t see much yet. Talk about a pretty situation. Well, Tony, I know you spent a lot of nights and weekends DIYing, right? You had the paint roller obviously dealing with the well issues. Was there any project that almost made you quit to just say, Hey, this real estate investing thing, it’s not going to work out for us? And if so, what kept you pushing when you were getting close to that point of giving

Tony Borman:
Up? Yeah, good question. Honestly, it was kind of the opposite. Thankfully for me, doing this work at that first house made me realize how much I enjoyed it. It’s not something for everyone. It’s not something everyone can do or has the time to do, but I really did enjoy it. And so that went a long way. You work your nine to five all day, and then you come home and you work six more hours painting your house. That’s not easy to do if you don’t like what you’re doing. So that is something that I realized during that first house was that, Hey, I actually do doing this and it doesn’t really feel like work to me. But with that question that brings up kind of a funny story, and I wouldn’t say a repair that almost broke us, but we were talking about how we could barely afford this house. Something that we did while we lived there was actually what I now know is house hacking, but I didn’t know at the time, but we had rented out a room and we actually ended up having to evict the roommate, which I don’t know if I’ve heard that on a house hack before.

Ashley:
That’s an awkward living situation.

Tony Borman:
Oh yeah. Oh yeah.

Tony Robinson:
Tony, I’m just curious, how do you deliver the eviction notice when they’re in the same house as you? Do you just tape it on the door to their bedroom or

Tony Borman:
Literally, yeah, yeah, exactly.

Tony Robinson:
Yeah, that is insane. What led to you wanting to evict that person? Honestly, I think that’s almost like a nightmare scenario for a lot of folks who think about the rent by the room or house hacking strategy where they’re in the same unit as you. What were the signs that made you say, okay, this is not going to work out having you live under our roof?

Tony Borman:
Yeah, it just kind of slowly deteriorated. It started with late rent, then no rent, multiple months with no rent. Again, we’re living together so I can see what you’re doing. It’s clear you’re not really trying to go get a new job or anything. So it was just like, obviously this isn’t going to work out.

Ashley:
That almost makes it worse that you can see, oh, they just door dashed of Amelia. That could have been put to the rent payment and they could have been eating rice and beans or whatever.

Tony Borman:
Yeah, it’s frustrating. Yeah,

Ashley:
There was this time that I did an eviction with a tenant, and it was the worst eviction I did because her grandfather lived with her, and when I showed up with the cops to actually do the eviction, he had a garbage bag around him used as a diaper. It was so awful and sad, and just the way she had her, actually it was her grandpa, her grandpa living with her like that. I just lost all respect for her in that aspect, besides the whole not paying rent thing. But I saw her a couple of weeks later after the eviction at my gym and I was like, you know what? Good for her. She’s going to work out. Maybe she’s getting her life together, whatever. No, she was bee lining it right to the tanning, and I was like, are you kidding me? You can afford to go tanning, but not pay your rent or buy a diaper for your grandpa. But yeah, so I can’t even understand your frustration.

Tony Robinson:
So Sony, this project just in general, quickly, how long did it take you from the day that you guys moved in until all of your renovations were complete?

Tony Borman:
So we ended up being in that house for almost three years. Actually when we bought it, it wasn’t our plan to do a live and flip, but we were kind of held to that geographic area through work. Those situations ended up ended changing, so we were able to kind of move on from there, and that’s when we decided to go ahead and sell it. So it was about three years that we lived there.

Tony Robinson:
And I want to talk about once the house hit the market because it sold in, or at least went under contract in two days, the wire shows up. And I guess how much did you make from that sale and how did that compare to the nights when you had that non-paying tenant living in your spare bedroom to try and make the mortgage?

Tony Borman:
Yeah, absolutely. So honestly, as we went through the process of, okay, we’re getting ready to sell, we’re going to keep on make these renovations before we do it, I was really projecting us to just get out of it alive, break even essentially. And so as it came together, we met with our realtor. He came up with a list price that honestly I thought was too high and thankful for him for talking me into it. Obviously it wasn’t too high, it went under contract really quickly, but it all just happened so fast and really kind of hit us in the face of like, wow, this is powerful stuff.

Tony Robinson:
And how much did you guys make on the sale?

Tony Borman:
Yeah, so we cleared 50,000 on that sale.

Ashley:
And how long did you live in the property?

Tony Borman:
Three years.

Ashley:
Three years? Yeah.

Tony Borman:
So again, we didn’t put any money down on the property. We kind of just worked on it as we had little money over time, so really didn’t have much into it. And then to walk away with a $50,000 payday really, really kind of latched us onto this real estate thing.

Ashley:
And how much was your mortgage payment every month?

Tony Borman:
I think it was only about 1100 there.

Ashley:
And then you had your tenant paying some of that?

Tony Borman:
Yep. Yeah.

Ashley:
So basically you lived in that house for free, you got the mortgage payments backed, the principal, the interest.

Tony Borman:
Yeah. Yeah. And then onto the next one.

Ashley:
Yeah. So I guess for anyone eyeing their first live and flip, which upgrade do you think made that resale value so high? What would you recommend that someone should be doing for cosmetic or a big repair to really add value?

Tony Borman:
Yeah, it’s funny because looking into that is actually when I first stumbled upon BiggerPockets, the big things you typically hear about kitchen and bathroom, which we did certainly work on. But something I’ve kind of realized in my experience so far is I really think that there’s potentially a lot of weight behind lower upgrades, but more kind of character items. So a couple of the things we did at that house was I put some new planter boxes outside and we had a nice fire pit area, for example. Those are pretty inexpensive things, but as people come onto the property, they can kind of see themselves living there. So I really think those kind of homey characteristics go a long way and don’t really get talked about that much.

Ashley:
Today’s show, it’s sponsored by Base Lane. They say Real estate investing is passive, but let’s get real chasing rents, drowning in receipts and getting buried in spreadsheets feels anything but passive. If you’re tired of losing valuable hours on financial busy work, I’ve found a solution that will transform your business. It’s Base Lane, a trusted BP Pro partner Base Lane is an all-in-one platform that can help you automate the day-to-day. It automates your rent collection and uses AI powered bookkeeping to auto tag transactions for instant cashflow visibility and reporting. Plus, they have tons of other features like recurring payments, multi-user access and free wires to save you more time and money, spend less managing your money and more time growing your portfolio. Ready to automate the busy work and get back to investing. Base Lane is giving BiggerPockets listeners an exclusive $100 bonus when you sign up at base lane.com/biggerpockets. Alright, Tony, so after you did that first live and Flip, you rolled that first 50 K straight into house number two. Why’d you decide to fix up house number two before you even moved into the property? And how was this different than flip number one?

Tony Borman:
Yeah, so something we learned on that first house was we didn’t finish all of the work making the house nice and pretty until right before we sold it. So we didn’t really personally get to enjoy the fruits of that, obviously, aside from the payday. But so as we were looking into this next live-in Flip, it was top of mind that let’s do the work first and actually enjoy the niceness of the product when it’s done. So we actually ended up just renting a place, a small place month to month after we sold that first house and then worked on this next house for a couple months before we moved in.

Tony Robinson:
So Tony, break down the numbers for us. You renovated this house and you said it took a couple of months, but you made the decision to refinance this property after you guys made those renovations. So break down those refinance numbers for us. How much did you actually spend on the rehab? What did that property appraised for and how did you turn that into again, that $92,000 tax free check?

Tony Borman:
This property, we paid 292,000 for, we put about 47,000 into the renovation. So we were about 339 into it and then went into the refinance process and had the property appraised for 500,000. So we were able to get a new loan of 400,000 and still have 20% equity in the property.

Tony Robinson:
Tony, that is amazing. So there’s a few terms I want to break down there, but before we even do that, how did you get this property at such a steal? Because to get a property at 2 92 that with only $40,000 in rehab appraised for 500, that’s a really, really strong margin. How did you find such a good deal?

Tony Borman:
So I got to give a little credit to the COVID pandemic, so we got some lift from that certainly. But honestly, this was, I guess this is my, but this was another divorce. Sea House had fallen out of contract a couple of times. This was a great example of worse house in the nicest neighborhood. It’s a mile from the ocean, great schools, just a great area and a house that just needed some love again. And I think the combination of how long it had been on the market and how many times it had fallen out of contract, the sellers were just ready to get rid of it. So it was definitely a steal for sure.

Tony Robinson:
So it was just on the MLS?

Tony Borman:
It was on the MLS? Yep.

Ashley:
What was it originally listed for?

Tony Borman:
I think like three 20?

Ashley:
Yeah. And then you got it down to 2 92.

Tony Borman:
2 92, and we even got a full 3% seller credit. So that covered all the closing costs on that one.

Tony Robinson:
So I want to break down the math here for the rookies that are listening. So Tony bought this house at $292,000. He then invested another $40,000, or you said $47,000 into the rehab. So you’re all in for 3 39 on this deal and it appraises for $500,000. Okay, so now the difference between Tony’s all in costs, the 3 39 and the 500, what is that? $161,000 spread between those two figures? So Tony, the bank was willing to give you the 400 K. Your initial mortgage balance was somewhere south of 300, and that’s how we landed on that $92,000 tax free. And guys, for all of our rookies that are listening, when we talk about the Burr strategy, this is the burr. You buy a property undervalued, you put money in to increase the value, and then you get to keep the difference tax free because it’s a loan, it’s not income, it’s a loan. You get to keep that difference tax free, and we’ve seen many, many people build their portfolio time and time and time again. Attorney, last question from you on the refi piece, oftentimes there’s called a seasoning period where after you purchase a property, a bank wants you to wait a certain time period before you do the refinance. Were you subject to that seasoning period? And if so, how long was it?

Tony Borman:
Not that I am aware of, probably because it was our primary, but we did purchase this property with the intent of selling after the two years so we could avoid capital gains. So we had waited that long, but at that point, loved the house so much, decided we were going to stay and just do the refi instead.

Tony Robinson:
Okay, so you had waited two years before you did the refinance?

Tony Borman:
Yeah.

Tony Robinson:
Right. Gotcha, gotcha. Ash, I think most banks, at least what I saw, was a six month minimum.

Ashley:
Yeah, six to 12 months. Okay. So now that money has hit, did you feel like freedom or was this like a $90,000 wait on you and what kind of stopped you from adding any lifestyle creeping?

Tony Borman:
Great question. I think it just comes down to what your goals are and what you’re working towards. Super important to whether you’re doing this on your own or with your spouse. In my case, my wife and I do this together and we do annual meetings together to talk about what we’re working towards, where we’re going. And I think just that alignment of understanding we’re working towards something bigger. It’s not about this $90,000, let’s go spend it. So it wasn’t money we felt like we now had. It was like, okay, here’s for the next one.

Ashley:
Well, congratulations on not feeding into that lifestyle creep, I guess. Now that you’ve done this deal, what was next for you after that when you decided to stay in this property and not sell it?

Tony Borman:
At this point? We’re really ready to get into a purely investment property. Up to this point, we’re doing kind of quasi live and flip kind of thing. So really wanted to get into more of just an investment property, wanted to start building a rental portfolio. So our next step from getting this $90,000 windfall was looking for a rental property.

Tony Robinson:
And where did you guys go, Tony, to find that deal?

Tony Borman:
So just about 45 minutes away from where we live is a little bit of more of a BC class area, working class, and just a lot more affordable prices and numbers that worked for rentals

Tony Robinson:
And for all of our listeners. Tony, what market are you in?

Tony Borman:
Yeah, so I am in St. Augustine, Florida, which is kind of part of the greater Jacksonville area. So I’m in St. Augustine, and then our rental is in Palatka, Florida.

Tony Robinson:
So on this palatka rental, you take the funds from this refinance. How much did you put down and how did your initial underwriting compare to what actually happened?

Tony Borman:
Yeah, so we did a traditional investment loan on this, so they wanted 25% down, so we did 25% down. I think the purchase price on this one was 165,000, and we also did some repairs on this property. One quick tip I would say in that regard is looking back on how I managed that, it was definitely a very inefficient use of cash, combining the 25% down and a property that needs work. That’s just a lot of cash to use on a single property. Had I done it again, I probably would’ve just bought turnkey rentals, maybe for example, I could have bought a few of those. So definitely a learning lesson there. But in terms of how the numbers worked out, this one penciled out to where we were expecting about $200 in cashflow a month. This rents for 1550 after accounting for repair expenses, property management taxes, we were expecting about $200 in cashflow. The curve ball that got hit with us here on this one though, was the tax increase on the property that got assessed after we purchased it. So I’m not looking at the numbers right now, but the original tax amount that I had projected based on the county records was call it $150 a month, and I think almost tripled per month. So it essentially wiped out that cashflow that we had.

Tony Robinson:
And I want to talk about that because we’ve heard that multiple times on the podcast here where the property taxes end up changing significantly from hey, when you underwrote it, and then what it actually is when you take ownership of the property, and I’m no property tax expert, so take this with a grain of salt, but typically the way that it works is that counties will assess, if you look up a property’s address and your county assessor’s website, there’s an assessed value of that property, typically not directly related to the market value. They have their own assessment process, but they’ll have an assessed value and sometimes they’ll assess that on some regular cadence. It could be annually, it could be every five years, whatever that cadence is, it varies from place to place, but it also often gets re-triggered on the sale of the property.

Tony Robinson:
So if the part property hadn’t been assessed in quite some time, maybe it hadn’t changed hands in quite some time, that assessed value might’ve been incredibly low. And then once the sale happened, it triggered a reassessment which increases those property taxes. So one of the things that I like to do when I’m looking at properties is trying to understand when was the last year that was assessed? And that’ll give you a better sense of, okay, well what should I expect going into next year? And sometimes you can call the county and say, Hey, what is your calculation for property taxes? When we bought our hotel, that’s what we did. We weren’t sure how the property taxes were going to change. We just called them and said, Hey, we’re looking at buying this property, walk us through the math behind what the property tax will be if we buy it X price. And we were able to back into it in that way. So I’ve heard it many, many times that the taxes have hit folks Ash, have you ever had a similar jump like that in your portfolio?

Ashley:
Not anything crazy like that. Not huge significant, just small increases, but you get the letter ahead of time letting you know what your current assessment is and what it’s going to change to. I’ve actually had it where the tax rate changes. So even though my assessment went up a little bit, the tax rate decreased. So I actually was paying a little bit less in taxes so it could go the other way. I have to say that’s probably pretty, pretty rare. And it was a very insignificant amount of money, but even though it was assessed more, because I’m always looking like, should I dispute this? But then I looked and I was like, oh, it’s actually less I’m going to be paying this year.

Tony Borman:
Another thing I would mention, just while we’re on that topic, is to make sure you look out for any kind of homestead exemptions as well. If the current owner has a homestead exemption, you’re not going to have that exemption when you turn it into a rental.

Ashley:
That is such a great point. There’s also, in New York, we have a star savings. We have a VA discount, which is probably across the country. And then there’s also a senior citizen discount too. I don’t know what they call that, but that could be on there too. And you’re right, that is, you have to actually read the tax bills, just don’t go what it says on Zillow or what the owner is telling you, actually look up the physical tax bill, which would be on the county website. Sometimes if you’re paying school taxes, they’re on the school website and get those physical copies or just ask the seller of the property for the physical copies of them.

Tony Robinson:
So Tony, if you were underwriting that same deal today, I guess, what line items would you look at and just as you think about your next deal, what is the one thing that you’re like, okay, I’m always going to check for this, and I’ll give you a quick example in our portfolio, because we had a rehab that we did that we turned into a short-term rental, and we had this sewage smell that we couldn’t fix in one of the bathrooms, and we did all this stuff. And turns out that my contractor, when they did the rehab, didn’t put a P trap. And now anytime we do a rehab, we say it’s the P trapp there. Did you do the P trapp? There’s a million other things that are happening in the rehab that we’re obviously checking, but one of the questions we always ask now is, is there a P trap? So what is your P trapp for property taxes as you look at your next deals?

Tony Borman:
Yeah, I mean, I think it comes down to being conservative. You don’t want to, I think we all can get into a place of where you kind of number yourself out of a deal. So you don’t want to get too conservative, but you always want to be conservative with your numbers. Certainly, obviously in my case, next rental I buy in Palka, Florida, I’m literally just going to triple the rate. And the reality is, worst case scenario, it doesn’t go up that much, and I’ve just got that much more cashflow, right? The other thing is something I don’t hear a lot of people do when they’re starting out is the whole going with property management. That’s something that I would definitely recommend and do again myself, but from a budgeting standpoint, I think that that also gives you a little bit of a cushion. I’m still using property manager on that property. I think it’s worth it to me, but in the event that cashflow goes down even more, I still have kind of a break glass option of doing the property management myself and getting that cashflow back.

Tony Robinson:
Alright guys, stick around because up next is the $2,000 tuition flip. There were ghosted contractors, flea bombs, and a nine day fire sale exit. So we’ll hear what happened right after. A quick word from today’s show sponsors. Alright, Tony, up next. You got a $60,000 house that looked like a steal, but I guess it kind of quickly went off the rails. So give us the kind of quick and dirty, what were the kind of blinking red signs that maybe you missed before you signed the deal?

Tony Borman:
Yeah, so now we’re coming into this past year. So obviously with interest rates, the rental market isn’t as great or buying rentals, the numbers aren’t as great. So I was looking into more of a flip in the meantime to kind of generate some funds. So I’ve been getting deals from wholesalers. This is one I got from a wholesaler, went and looked through it. I actually ended up originally going under contract on it at 80,000 and got cold feet after walking the property some more and as it set into me of how much work this place really needed. So we actually fell out of contract originally, and then the seller contacted me again a few weeks later and said, do you want it for 60? At that point, having already kind of gone through the motions and trying to make it work at 80, I was like, oh, it’s 60. I can definitely do this. Let’s do it. Yeah, I mean, just to kind of paint a picture, this is a 1940s concrete block house. You walk into the house and there’s no ceilings, no drywall, no floor, no electric. I mean, it’s about as far gone of a place as you can get.

Tony Robinson:
So Tony, let me ask Greg, because you had done a few rehabs already with the live and flips some minor cosmetic improvements on the rental property. As you walked this one, what gave you the confidence, whether justified or unjustified, what gave you the confidence to walk into a house in such a disrepair and say, I think this is a good next step for us? And let me ask some concept. The reason why I ask that is because I do think that it’s important for investors to maybe challenge themselves to take on projects that are a little bit more challenging than what they’ve done before, because I think that’s how you get better as a real estate investor. But I also think that maybe there’s a point where you step too far outside of your existing skillset and knowledge base where you end up jumping into maybe a deal that could be dangerous for you. So how do you gauge when you’re in that growth opportunity versus a dangerous opportunity? So as you were walking the deal, what was going through your mind to say, okay, I think this is a good next step for us?

Tony Borman:
Yeah, I think my big blunder, to be honest with you is that I did not as far gone as the property was. The whole structure was still there. And so I was originally thinking that it was still work that I could do myself, which I was used to doing. I know I’ll put in the hours, it’ll get done as fast as I can do it kind of thing. But after getting into the nitty gritty, walking with a couple contractors realized that it needed some significant structural work, which needed a licensed contractor, permits the whole shebang. So that was really the big hiccup was all of a sudden my reliance on an outside contractor to get the work done.

Ashley:
When did you start to realize that you’re going to lose money and you need to exit this property?

Tony Borman:
It was really kind of just as the timeline kept getting pushed out, just kind of based on my W2 work. I’ve done a lot of project management. So from a rehab project management, I’m really organized. I have a whole timeline out. So as I continued to struggle with contractor after contractor and the house was sitting, I’m now projecting a finished date out into the fall, getting into the holidays when you don’t want to be trying to sell a house. So that’s when I really started to think I might want to get a different exit here.

Tony Robinson:
Can you tell us really quickly, Tony, about I guess some of those challenges? I know that there was a Mercedes driving pit bull breeder, you had GCs ghosts in you flea infested inspections. I guess how did each of those obstacles impact and adjust both the budget and the calendar

Tony Borman:
From a contractor perspective? It’s rough out there, and I think we’ve all heard that, but I didn’t realize quite how rough. So yeah, one of the examples, I had a contractor out showed up in a nice Mercedes, kind of said the right things, got down to the nitty gritty of asking what paint colors I wanted in the finish. Ended up sending me a formal bid online asking for a deposit. But one of the things you can obviously do and I would recommend is to look these people up on social media. So this guy, for example, you go to his Facebook page and it says he’s a dog breeder. Nothing about contracting. There’s no pictures of work he’s done. So I got a bad vibe from him and just told him I was going to go a different route. A couple months later, I saw in our local investing Facebook group that somebody had in fact paid him a deposit and he disappeared. So I dodged a bullet on that one, but I went through, I think seven different contractors on this house. None of them actually ended up swinging a hammer.

Tony Robinson:
So Tony, let me ask, right, because that’s a lot, and I think that there’s a lesson in there. What do you think was the common denominator amongst all seven of those folks that you now know to look out for before you hire someone else?

Tony Borman:
I think part of the challenge with the sourcing a contractor is the reality is the good contractors don’t need work. So when you put a post on Facebook in the investment group or whatever the case may be, you’re trying to find a contractor on your job. The guys that are coming out and saying, yeah, I’ll be right there. There’s probably a reason that they don’t already have work going on, at least in our market. From what I see, the good contractors are just going from job to job and they don’t need to market or look for new work. So ideally, I think the best way to get a good contractor is through word of mouth. Somebody used them and hopefully just doesn’t happen to need them right at this time. So you can use ’em kind of thing. But I would say once you do find the good contractor, make sure you take care of ’em.

Tony Robinson:
So let’s talk through how you eventually walked away from this deal, right? Because I mean, honestly, Tony, you had two really three successful deals. You have the first live and flip net at 50 K. The second live and flip, you refinance and get almost a hundred grand. You get the long-term rental, which even though it’s not giving you the cashflow you want, there’s still some upside there in terms of equity and depreciation and all those different aspects. And then you kind of get your face punched in on this last deal. So how did you walk away from it? Did you see it all the way through? What was your actual exit strategy?

Tony Borman:
Like I said, as I kept looking at the schedule and it getting pushed out and another contractor falling out, I decided it was time to at least try to sell it just for sale by owner, put a sign out front, put a QR code on there with some information sheet, and just put it up for cash. I listed it for 85,000 cash, and my thought there was, I can still work towards what I’m doing. I can still try to get this property done, but in the meantime, if somebody’s willing to just take it off my hands for 80, 85 K, then maybe it’s better for me to just walk away at this point. And I’ll say it’s one positive about the whole kind of working at W2 and doing investing on the side. I didn’t need to make money from this flip. I wasn’t dependent on it. It wasn’t paying my bills or anything. And so I was perfectly okay with this just being a learning lesson in the end.

Tony Robinson:
But Tony, I think it also illustrates how critical it was that you didn’t buy that deal originally at the 80 k and that you got it at the 60 k because had you bought it 80, instead of losing two grand on the deal, you would’ve lost 22,000, $22,000 on the deal. So I think it goes back to if you can buy at a really good price that oftentimes can offset other things that go wrong on the deal, and this is a perfect example of that.

Tony Borman:
Absolutely.

Tony Robinson:
Yeah. Agree.

Ashley:
Well, Tony, thank you so much for joining us today. Can you let everyone know where they can reach out to you and find out more information?

Tony Borman:
Yeah, absolutely. Instagram’s probably the best spot. You can just look, Tony Borman my name, and feel free to reach out if you’re in the area or you’re investing from out of state. I’m happy to connect.

Ashley:
Well, thank you so much. We really appreciate you taking the time to share your story with us today and to give some lessons learned. I’m Ashley. He’s Tony, and we’ll see you guys on the next episode of Real Estate Rookie.