# Alex Hormozi's Advice on House Flipping

Channel: Real Estate Skills
Video: https://www.youtube.com/watch?v=16KycqZxUbU
Duration: 19 min
Language: English
Words: 4603
Transcript page: https://viewrankai.com/tools/youtube-transcript/16KycqZxUbU

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[0:00] A woman told me the other day that she made $200,000 on her first fix and flip then never did another one. When I asked her why she stopped, she said, "I needed more money to finance these deals." And that one sentence, it's the most expensive mistake in this entire [music] business. Because the money, it's never the hard part. I can point you to keyav.com right now, and these are lenders who will fund as much as 90 to sometimes 100% of all the costs on a real fix and flip. Now, say I got you the money. Now what? Well, now you need [music] a deal. And that right there,

[0:27] that's the bigger problem. Now, I've been part of more than 1,000 transactions over the last 14 years. I've trained over 6,000 investors. So, trust me on this one. Money is easier to find than great deals. Now, Alex Hormozi has given tons of great business advice that applies directly to flipping houses, [music] even when he is not literally talking about flipping. And most beginners think flipping is about paint colors and the flooring and the cabinets and the construction, but it's not. Flipping houses is really a deal flow business, and underneath that, it's a sales business, then an operations business, and a capital allocation business. So, I pulled [music] 10 clips

[0:59] of Alex Hormozi coaching real estate operators. Now, I'm going to react to each one. I'll tell [music] you what he gets right, where I'd actually add context from flipping houses, and what I'd do if I was starting a house flipping business today. Richard Ferris, Hormozi, I have a real estate development business. We do value add deals. How do I apply your principles from 100 million dollar series to this business? Okay. So, if you're in the development business, do you see your leads as the deals or do

[1:25] you see your leads as the investor? When he says value add real estate, that's exactly what flipping houses is. You buy an asset that's underperforming, it's distressed, mispriced, or outdated. You add value through repairs and repositioning it, then you sell it for a profit. That's a flip. That's the whole thing. So, when somebody tells me that flipping is, "I need to learn construction," they're thinking way too small. Construction is just one little piece. The real business is finding the right opportunity before everybody else, buying it correctly, and executing the

[1:51] renovation, then exiting with a profit. And that's exactly why money is usually easier than finding the great deal. If you've got a real deal with real margin, the private lenders, the hard money lenders, the partners, they're pretty simple to attract. But if the deal is bad, no amount of money is going to save

[2:04] your deal. Outreach would be my primary method of trying to attract deals. And as silly as this may sound, kind of like I was saying earlier with Sharran in the real estate industry, like he did 260 something events. Like in industries where it's super small and very aggregated at the top, the conference or shooting them in the barrel method is one of the most effective ways of doing it. But a lot of the deal stuff is like

[2:23] building out the broker network. All right. So, that's exactly right. If you want to flip houses consistently, you can't sit around waiting for a deal to fall in your lap. You need a deal acquisition system. And here's where I take what Hermosi said and point it to somewhere he doesn't. For us, that system is what we call the MLS offer system. And it runs on the MLS, the one

[2:41] place most investors overlook. Everybody's out there fighting for the 9% of off-market deals, those leads, cold calls, direct mail, paid ads, all those expensive channels. Meanwhile, there are distressed sellers sitting right there on the MLS underneath your nose, represented by an agent. And all the sellers are raising their hand saying, "I want to sell my house." Now, the mistake beginners make is they glance at the MLS and on-market and they go, "There's no deals there." But that's amateur thinking. The deals are right there. They're hidden in the bad photos, the stale listings, the price drops, the estate sales, the tired landlords, the

[3:09] vacant homes, the failed fix and flips. And the skill of knowing how to spot them and then analyze them and sell the agent on working with you, then making enough calculated [music] written offers, that's when flipping stops being luck and starts being predictable. We've been focused on, you know, one market particularly for like six years. And now like most of the brokers come to us with all their off-market deals first

[3:29] cuz they know we can close. Now, this is one of the deepest things Hermosi says in all these clips and I don't think it gets caught. After years of doing deals in one market, the brokers, the real estate agents now bring him the deals because they know he can close. That's exactly how this business compounds. And everybody's asking the wrong question. They ask, "How do I get more leads? How do I find more deals?" The better question is how do I become the investor that deals actually find and come to? Now, in the beginning, sure, you're outbounding and making new relationships with agents and brokers, right? You're calling them,

[3:58] you're making offers, you're proving yourself. But, once you close cleanly, communicate, and do what you say you're going to do, that's pretty important. It reverses. It flips. Agents will start calling you. Brokers start sending you the off-market listings first because now they know you're not another amateur making fake offers. And building this trust on a call comes down to an ACCA framework. It means attention, connection, commitment, and action. You give the agent your full attention, you build a real connection, you make a commitment to them and the deal, and then you take action on what they and the seller actually need. Now, if you do this on every single call, you'll stop

[4:30] being a stranger and start becoming the investor that they call first. And this is why I love working with agents and brokers. One great agent will bring you another deal and another [music] and another. And over time, agents don't just bring you deals. They start actively looking for deals specifically for you because now you're their go-to buyer. So, your professionalism and reputation is actually a large part of your acquisition strategy. When you can close smoothly and you're someone that they can actually trust to close, your next deals get easier. When you waste their time and you make their job

[4:59] harder, your next deal will get harder. 10,000 cold calls will teach you significantly more about sales than any book ever will. Repetition is the mother of skill, and so if you want to get skilled, you got to do the reps. Repetition is the mother of skill. I agree with this 100%. Notice what he didn't say. He didn't say, "Go read another book and go watch another guru on YouTube." Hermosi said, "Do the reps." And I'll adapt this to how we do it. For us, it's not about cold calling random owners who may or may not want to sell. We call the listing agent on a property that's already for sale. That's

[5:29] a warm call and a hot phone call. There's already a seller interested in selling, already a property that is distressed, and already a conversation that's been started. So, you can study fixing and flipping for 6 months and still not know how to make a good quality offer, or you can start finding, analyzing, and submitting written offers right now today and learn more in 2 weeks than most people learn in two years. And I'm kidding. The game is reps. How many agents did you call? How many properties did you analyze? How many written offers did you actually submit? And I'd like to add one thing though, and I think Hermosi would agree

[5:56] with me on this. Reps alone don't make you a master. Somebody can make 10,000 bad offers. Somebody can analyze 10,000 deals wrong and just reinforce bad habits for years. We have to see it all the time. What you actually need are deliberate reps. And that's why inside my company we track our KPIs. We review the actual call recordings. We review

[6:16] the offers. We coach the objections. [music] Repetition with correction. That's what turns reps into skill. And that's the difference between guessing for years to actually becoming great in months. And if you want to see the free training on how I actually find wholesale and flip deals directly from the MLS. This is without spending tens of thousands of dollars on marketing or any money on marketing. I put the link in the description. And I'll walk you through the exact on-market system we use to find these opportunities, to analyze them, and start making offers today. So, go check it out and come right back

[6:42] because this next part gets good. A mediocre plan done for a decade beats a perfect plan done for a day. And most people don't do that, right? They continue to do a perfect plan for one day at a time and they continue to use the aphorism that you used earlier, like the half-built bridges, right? Like they start building a bridge, they get halfway across, and they're like, you know what? There's another part of the ravine that's closer. So, I'm going to build another bridge. And then they get to that one and they're like, actually, there's another part of the built the thing that's closer. The thing is if

[7:04] they never left the first bridge, they would have finished it by the time they were starting their fourth one, right? And they'd have dollars coming across it. And so, I think entrepreneurship much the same way is we get good by by learning the details. And the details come through the repetition. It comes through putting brick by brick,

[7:18] assembling the bridge. All right. So, this is one of the biggest reasons people fail in real estate. They start wholesaling, then they hear fixing and flipping is better, then rentals are better, then Airbnb because they're actually shorter term, then creative finance, then commercial, then multifamily. And you know what? They never finish the first bridge. Wholesaling, flipping, and rentals, they all work, but none of them work if you keep switching before you ever do the

[7:39] deliberate reps and develop the skill. So, at Real Estate Skills, we teach multiple exit strategies, but our acquisition engine stays the same. Find a discounted property on the market and with a real estate agent, analyze it correctly, make the calculated offer, control the deal. Then you pick the exit. Maybe you fix and flip it because it's a no-brainer. Maybe there are no comps, so you don't fix and flip it, but you wholesale it with zero risk. And maybe you keep it as a rental because we see it can cash flow from day one after we analyze it together. So, the exit

[8:06] changes, but the core skill, it doesn't. And the core skill is finding and controlling good real estate deals. Better yet, you know it, I know it. This is called acquisition. Maybe Hermosi's onto something by naming his company acquisition. So, don't chase a new strategy every single week. Master the acquisition engine that feeds every

[8:23] single strategy. I'll zoom out for a second before giving the immediate like, "Cool." Which is the problem that we're solving is just deal flow. Right? And so, kind of like I was saying earlier, like thought leadership is a path. It doesn't have to be the path. If it's the path that you want, cool. But, when I think about this, I think about basically what is the the highest reward, lowest risk way of accomplishing whatever the problem is, right? And so, I think where the quote analysis paralysis kicks in is that you're like, "Which one is best?" And I

[8:49] call it the fallacy of the perfect pick. Is that you think that there's a perfect pick and there just isn't one. There's tradeoffs on all of them. So, a guy on track for 14 million in revenue comes to today's smartest business coach expecting some advanced strategy, and Hermosi zooms out and says, "The problem we're solving is just deal flow." That should tell you

[9:05] something. Same problem at every level. And then he names the thing that traps people, the fallacy of the perfect pick. Now, I watch people lose money in real estate all the time before they ever find a property because they sit at the bottom of the mountain trying to find the perfect path. Should I flip it? Should I wholesale it? Should I do creative finance? Should I wait for the rates to drop? Meanwhile, somebody else is already making calculated offers on a

[9:25] daily basis. There is no perfect path. Every strategy has tradeoffs. Flipping has bigger profits, but more risk and more moving parts. Wholesaling has way less risk when done the right way, but smaller paydays in general. And rentals, which I love, they build long-term wealth, but you need capital and patience. The skill was never picking the perfect strategy. It's choosing a proven one and committing long enough to it to actually get good at it and making enough offers to let the market give you

[9:49] feedback so you can actually improve. And that's exactly why we always start with deal acquisition. Once you know how to find deals and actually get them under contract, you've got all the options in the world. But when you don't have this dialed in, you're sadly out of luck. So, you're in the deal acquisition

[10:02] business as a fix and flipper. Stick to what you know. Don't try and be the next Gary Vee or the next next me or the next whatever because like you're not going to beat me at being me, but you will beat me at being you. And so, I would just only talk about the things that you have the track record for. That will necessarily narrow the content that you talk about, but like just don't be afraid. If you see you have like 100 views, I see tons of videos have 100 views, 200 views, 500 views, and I'm

[10:22] exactly who they want watching. Now, this applies directly to building a flipping business, especially if you want agents and brokers and lenders and sellers to take you seriously. You do not need to become a motivational influencer. You need to become known for what you actually do. So, [music] if you flip houses in Portland, Oregon, talk about Portland deals. If you buy outdated properties, show what makes one a good flip. If you renovate houses, show the befores and afters. Your content should build trust with the exact people that can bring you deals or capital. And I love what he says about small view counts because this is the

[10:54] part a lot of beginners get wrong. You do not need millions of views or hundreds of thousands of views to make money in real estate. One agent, one broker, one lender, one private money partner, one seller can literally be worth hundreds of thousands of dollars to you. And this is why your brand reputation is also part of your deal flow. But I do want to add one thing for our real estate world because some of you are going to be thinking from this, I need to become a thought leader, and you're going to think that you need to be on TikTok before you actually close deals. You do not. The first authority

[11:20] you need is becoming [music] the investor that agents trust because you actually close deals consistently. So, closing deals creates that trust, and the content will just amplify it later. You could run paid ads and say, "Hey, this is my experience, this is my background. If you're an accredited investor, check us out. Or you could be making content, or you could do the outbound method. Like, those are the options, right? There's only so many ways to get to like have people find out

[11:40] about your stuff. So, this is a clean way to think about flipping. There's only so many ways that deals come to you. You can pay money for attention through ads. You can earn attention through making content. Or you can create attention for free through talking to real estate agents and brokers. [music] So, that's the whole menu that we're talking about here. And this is where I'll just respectfully push back on Hermosi a little bit because he coaches business just in general. He's not flipping houses for a living. In another one of these sessions, he tells a developer to just run paid ads to motel owners. And look,

[12:08] for a private equity style type of operator, that works perfectly fine. But, this is where beginner flippers get in trouble. When you're new to the game, you haven't learned how to consistently identify [music] a profitable deal yet whatsoever. You have no idea. And I'd much rather see somebody master acquisition through the MLS, build relationships with active agents and brokers, learn how to analyze deals correctly, and make hundreds of offers for free before they spend tens of thousands of dollars a month in marketing. Because the horror stories are real of people spending tens of thousands of dollars a month on marketing that have no ability to close

[12:42] with the leads that come across their plate. Marketing, it can amplify your skill, but it doesn't automatically make you skilled just because you spend $30,000 a month in marketing. You could absolutely run an ad that just says hey, if you're a motel owner and you're looking to sell, um I'd love to talk to you. And you could just generate

[12:57] leads that way. It works fine. For us, the cleanest starting point is the MLS and working with agents because the inventory, it's already public. The sellers, they're already active. The agents are already involved. And you can start without spending thousands or really anything in marketing. [music] And relationships and content and capital, it all matters, too. But, when you're starting out, the fastest path to learning [music] is to find deals and make offers and opportunities that are already right there on the market. And this is the belief that costs people the most. Beginner flippers usually think the bottleneck is money for the deals, but it's not. The real bottleneck is

[13:29] becoming a real estate investor who can consistently source profitable deals and actually get them under contract literally every week or month depending on how big you want to scale your business. And this is why I spend so much of my time teaching acquisition. Let me show you the proof. Robert just did his first fix and flip and he came in initially believing that money had to come first. But he watched our content, he realized that you can actually get started in real estate without your own cash. Instead of waiting around, he wholesaled first. And wholesaling actually built his credibility with those around him and got him trust with

[13:57] lenders because he started to get transactional experience. Now, Robert's next potential fix and flip that we worked out together proves the other half of this. The deal we looked at had no comparable sales, which means you couldn't really value anything against it. So fixing and flipping it was a gamble. I told him this. So instead of forcing it, he wholesaled it. He made $15,000 in a week with no risk. He wasn't buying it and fixing it. And the alternative would have been to fix and flip it and maybe break even in 6 months. So this is the velocity of money and what I want to tell you, what I tell

[14:26] my students all the time, if you're thinking about fixing and flipping, there's always a better deal around the corner. Do not just romanticize this deal that's on your plate right now because it's your only deal. This is how you can get in trouble. So learn multiple exit strategies. So if you're a fix and flipper, if you do put it under contract and it's not a great deal, you can still monetize it through a

[14:44] wholesale. I would probably hit the conference event stuff because that's where it's just super high leverage. You typically want to be face-to-face with investors. They I mean not I mean it's just like the speed to trust is so much faster. So this is dead on for real estate because house flipping, it's a trust business. People bring deals to people they trust. Agents send opportunities to

[15:00] investors they believe they can close. And private lenders fund people that are competent and good contractors will always prioritize the people that pay on time. If you're hiding behind your laptop, that could be a mistake. Yes, you can find deals online. Yes, you can find deals on the MLS. Yes, you can analyze property from your couch, but face-to-face speeds everything up. So go meet the agents in person. Go meet the brokers in person. Go meet the lenders,

[15:21] the title reps, the [music] contractors. Go to your local real estate investor meetups, because this is also exactly where you're going to raise all the money, because these rooms are full of lenders looking for good flip deals to fund. And one relationship can change your entire business. So, when you combine real relationships with a real acquisition system, this is when

[15:38] flipping can become scalable for you. If you truly believe in what you sell, selling is actually very easy. The problem is that people are either selling stuff they don't believe in, or actually it's really just that. [laughter] Yeah. Like they sell all this stuff they don't believe in. It's either their own stuff or it's somebody else's. But either way,

[15:52] they're not wholeheartedly convicted. When you refer a friend to a pair of pants or like a a shoe that you like, you sell the right way. Yeah, I love it. Cuz you believe in it, right? And also, cuz if they don't do it, you don't really care. You're like, I'm just telling you. I mean, like, you want it, awesome, right? And so, if you truly believe, which is where I would put night like my where I put my attention on a sales team, is on the conviction more than anything. Because if you get that right, the tonality, where they pause, their demeanor, the frame they

[16:17] hold on the call, is the right frame. So, this directly applies to making offers on houses. And it's the perfect note to end the lessons on. When you know your numbers, you sound completely different, in a good way. When you understand the repair costs, the after repair value, the holding costs, the closing costs, your profit margin, and where you need to offer, you don't sound like you're guessing, because you're not. You sound like a pro. And this matters more than people think. An agent can feel when you don't know what you're doing, and you're throwing in a random lowball offer that's not justified by anything whatsoever. And a seller can

[16:47] feel when you show up to an appointment and you're not confident, because you didn't practice your script. And a lender can feel when you don't actually understand the numbers of a deal. So, conviction comes from preparation. Anyone who knows their numbers down pat can hold this positive frame. And this is why having a deal calculator matters. This is why knowing how to run comps matters. This is why knowing your KPIs matter. You're never ever trying to manipulate anyone. You're always communicating clearly from a position of certainty. So, when you know the deal works, you make the offer at the numbers that work for you. You stand behind it

[17:14] with confidence, and then naturally, others will follow in the process because this is what leaders do. So, put all of these 10 clips together next to each other. A motel developer doing a figures, a guy who needs deals, not investors, and a coach telling you to just do the reps. Different levels, one answer every single time, deal flow. If you add it all up, you get that. Now, if Alex Hormozi started a house flipping business today, he wouldn't start with the tiles and the flooring and the paint and HGTV, he'd start with acquiring deal flow. He'd ask, "Where are the best opportunities? Who controls them? How do

[17:43] I get in front of those people? How do I make enough offers? How do I build trust? And how the heck do I make this consistent?" Because the goal should never be just one deal, the goal is building a machine that can find, fund, [music] fix, and flip profitable deals over and over again. And this all comes back to the line that I opened up with, money is easier to find than great deals. If you have a great deal, the money shows up relatively quickly. If you have a bad deal, the money's nowhere to be found. And if you have no deal flow, then you do not have a house

[18:07] flipping business, you have a hobby that's costing you money and time. So, the only question left is, what type of machine are you building? One where you pay for leads from an ad account costing you $5,000 or $10,000 per deal, or one where the leads cost you nothing because the distressed houses that are perfect for fixing and flipping are right there on the market waiting to be put under contract. It's the same discipline, different acquisition method, completely different machines at the end of the day. Now, Hormozi gives you the business principles, I just showed you how they apply specifically to flipping houses, and if you want the actual machine, this

[18:37] is what I teach at Real Estate Skills. Our MLS software system for finding the deals, analyzing the numbers correctly, raising the money for fix and flips, how to run the renovation process, so with the scopes of work, and this is the templated line item by line item work that you need to do to a house and give it to the contractor, the project management schedule that keeps your project on time and on budget, it's pretty important, and how to protect yourself with the right legal documents during the renovation and when you sell, and then most importantly, how to sell your finished fix and flip for top

[19:03] dollar on the market. Click the link in the description, watch the free training, and I'll show you how the MLS acquisition system works step by step. And if you want to see me break down how to find your first profitable deal from the MLS with real estate agents, just watch this video right here. Alex Martinez with Real Estate Skills. See

[19:17] you in the next one.

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