Here’s a guy who had poured his heart out for years on the blogs without obligation, just trying to help people. He deserves to be recognized as a team player first, then as a flipper showing the way:
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Jim Klinge
Klinge Realty Group
Are you looking for an experienced agent to help you buy or sell a home?
Contact Jim the Realtor!
- 682 S. Coast Hwy 101, Suite #110
Encinitas, CA 92024 - (858) 997-3801 call or text
- klingerealty@gmail.com
CA DRE #01527365, CA DRE #00873197
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Trustindex verifies that the original source of the review is Google. We sold a home with Jim and Donna and from beginning to end they were consummate professionals. Their initial walk through the property resulted in a list of items to be repaired or updated. They supplied a list of vendors and job quotes to do the repairs and updates. We originally wanted to sell ‘as is’ and just get it over with. They gave us a selling price for ‘as is’ and options for doing a few updates/repairs to doing it all with the selling price for each option. We agreed to do all they suggested and we sold for the exact price they predicted. For every dollar spent we got back more than $2 back in the selling price. And they got that price in a rising interest rate environment! Donna and Jim are extremely detailed and guide you through ever aspect of the sale. There were no surprises thanks to their guidance. We couldn’t be more pleased with their representation. Thank you Donna and Jim, Jerry and MaryTrustindex verifies that the original source of the review is Google. We have known Jim & Donna Klinge for over a dozen years, having met them in Carlsbad where our children went to the same school. As long time North County residents, it was a no- brainer for us to have the Klinges be our eyes and ears for San Diego real estate in general and North County in particular. As my military career caused our family to move all over the country and overseas to Asia, Europe and the Pacific, we trusted Jim and Donna to help keep our house in Carlsbad rented with reliable and respectful tenants for over 10 years. Naturally, when the time came to sell our beloved Carlsbad home to pursue a rural lifestyle in retirement out of California, we could think of no better team to represent us than Jim and Donna. They immediately went to work to update our house built in 2004 to current-day standards and trends — in 2 short months they transformed it into a literal modern-day masterpiece. We trusted their judgement implicitly and followed 100% of their recommended changes. When our house finally came on the market, there was a blizzard of serious interest, we had multiple offers by the third day and it sold in just 5 days after a frenzied bidding war for 20% above our asking price! The investment we made in upgrades recommended by Jim and Donna yielded a 4-fold return, in the process setting a new high water mark for a house sold in our community. In our view, there are no better real estate professionals in all of San Diego than Jim and Donna Klinge. Buying or selling, you must run and beg Jim and Donna Klinge to represent you! Our family will never forget Jim, Donna, and their whole team at Compass — we are forever grateful to them.Trustindex verifies that the original source of the review is Google. WeI had the pleasure of working with Klinge Realty Group to sell our home in Carmel Valley, and I cannot recommend them highly enough! Jim and Donna demonstrated exceptional professionalism, offering expert guidance on market conditions and pricing strategy, which resulted in a quick and successful sale. Communication was prompt and we were well-informed throughout the entire process. For anyone looking for a dedicated and knowledgeable real estate team, look no further! ---Trustindex verifies that the original source of the review is Google. Donna and Jim Klinge of Klinge Realty Group have our highest possible recommendation. From Donna and Jim’s first visit to our house through closing their advice and counsel was candid and honest in all dealings. They kept us fully informed throughout the process. The house sold less than three days after listing with a two-week closing. My wife and I have sold several houses during our lives. This was by far the best experience. Klinge Reality is a premium service realtor. You can’t make a better choice for someone to sell your home fast and for top dollar.Trustindex verifies that the original source of the review is Google. Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.Trustindex verifies that the original source of the review is Google. This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.Trustindex verifies that the original source of the review is Google. Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless. So grateful that I had them on my side!Trustindex verifies that the original source of the review is Google. We first found Jim through his blog at bubbleinfo.com, which really showcased his knowledge of SoCal real estate. Since then we've done three transactions with Jim and Donna, and they are an incredible full service agency, with Jim's deep market insight and Donna's deft contract and project management. We trust them implicitly in their analysis and strategy, which is based on years of experience. They're always available and on top of things, and we strongly recommend them to anyone.Trustindex verifies that the original source of the review is Google. The Good The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market. The Great Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them. The Outstanding We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time. The Truly Exceptional Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs. The Recommendation For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's bubbleinfo.com blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...Trustindex verifies that the original source of the review is Google. We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready. Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free. Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.Load more
Agenda.
I was just reading through the previous post about this story and heard there were some negative comments about this man.What the heck is wrong with people.Here we have a hard working guy making some money and he’s the bad guy?Cmon people.These people are jealous they aren’t making the money.This guy has done the research and educated himself on this topic.He is more advanced than me as I have never bought at a trustees sale.It is a goal of mine and educating myself how to do it.Hats off to sd realtor who had the balls to take a risk.I am glad he is making great money.I hope he more success in the business.
Capitalism at it’s finest. Commend both Adam and Jim. For anyone complaining or bellyaching about the opportunities Adam is capitalizing on please zip it and get off your lazy asses or move to a 3rd world country or both…
Great stuff Jim!
Exactly, they are putting $600K on the line and is being rewarded. I don’t think I’d have the fortitude to do what they’re doing. He’s also putting in a ton of back-end work, so while it seems like buy a house make $100K if you take that and split it three ways and divide it over the work done it seems like an honest days pay for an honest days work to me.
I wonder if all the bureaucrats honestly thought they were helping anyone other than current owners with all their bailout programs.
The reason flippers are able to make $$$ right now buying on the courthouse steps is because banks haven’t been forced to show their hand.
Once the foreclosure floodgates open up it’s going o be much harder to make $$$.
Even SDR said the reason he’s able to do this is because of the limited supply.
Kudos to Adam, et al: More importantly than the work/risk, the pricing is low due to the zero financing available.
To put it in perspective, ask yourself how much home you could afford if there were no banks and everyone had to pay cash…how much could you afford? Not much I bet. Thus your down payayment of 20% would then become the full price you could pay and homes would drop 80%.
On the other end of the pendulum, we just lived through overly high prices due to 100% financing (and know how unsustainable that was). Thus you may think you have $1mm of risk, however, we’ve all been shown you really had NEGATIVE cash at risk when you pulled out your downpayment and then some.
Lastly, any buyer who had attitude against flippers can just not write them an offer…its that easy…just like turning off TV shows that you don’t like…costs you nothing to take your downpayment down the road to another seller.
You are not entitled to risk-free, cheap real estate…that is a holdover from the bubblerider days.
Either pony up the cash, take the risk, stress out the wife, and lose sleep by being a flipper..or buy retail through the MLS and enjoy your home on day 1.
I think people are just jealous. They should ask themselves, if they had $600K would they risk it on a foreclosure without being able to see inside? What if it had serious foundation or structural problems?
On a side note – Adam has submitted some offers for me in the past and he did a great job. He gave his honest opinion of the property without guiding my decision. My only complaint? That I don’t have access to these trustee sales because I only have 20-30%!
Shadash – don’t stop your thinking so short….if there were a flood of properties due to no gov bailouts, then the Trustee’s sales would experience a similar flood of properties further driving down the initial purchase price at the Trustee Sale below the market.
All boats rise, and sink, with the tide.
The trouble comes when the gov changes the rules in the middle of the game (i.e. after you buy a trustee sale at $500k then the next day the gov stops all programs and prices crash leaving you holding the bag). Hence, SELL AS FAST AS POSSIBLE!!!
Adam,
Take the day off and enjoy some turkey and fixin’s!
You deserve it!
Jim
Happy Thanksgiving to you and yours!
It seems the greatest problem w/ the trustees sals are the cash you have to have up front.Where do most of these guys get the money?Is it mostly from investor pools?
Is anyone familliar with a good hard money lender?I guess this would be a temporary loan and then refinance.
Doesnt FHA have a 90 day seasoning requirement?
Happy Turkey Day to everyone!
Just like with Jim’s cute blonde investor, I have no problem with what Adam’s doing.
I will say that the government & banks are certainly creating the opportunity for flipping by minimizing the number of trustee sales.
Shadash you nailed it. The only reason we decided to undertake this is ABSOLUTELY due to the limited supply. That can be traced back to the snails pace of the foreclosure process, the shadow inventory, etc… Also again this is not just me. I am one of 3 people and they have worked really hard as well.
I was incorrect in my measure of exit strategy. I earlier mentioned interest rates will be the measure of when we bail but it will not be that alone. If we finally do see a spike in inventory then we will be out. It is not an if, but when. At some point things will roll over and undoubtedly we will be holding a home or a few when it happens and we will have to slash and burn.
This entire market is a charade. It is not an if but a when in terms of rolling over. We just got tired of watching it on the sideline.
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Seasoning IS a requirement. None of our homes can sell with FHA financing. Even CONVENTIONAL is a chore. Many conventional lenders will use FHA overlays even though the loan is not FHA. Seasoning is not an FNMA guideline… YET. That will also chase us out.
Alot of the big guys buy and hold properties for 90 days or 120 days (in the case of IRS liens. We are not comfortable doing that.
Where do we get the list of trustee sale homes?
This site has some:
http://www.lpsasap.com/
What about land trusts? Someone told me you could buy at auction and then transfer to a land trust to avoid the 90 day rule.
What a novel idea — you need deep pockets to flip properties. And to think a few short years ago all you needed to flip houses was the desire to flip houses. This a good thing. He’s helping to lower comps along to way, too.
But now that there’s a whiff of money, the competition will be tougher, and the chances of racing to buy a dud will be higher.
The planning on the exit strategy has got to be rough. As more homes hit the courthouse steps, prices paid by flippers “should” be less, right? But you’re worried that the greater inventory could leave you holding the bag (or taking under purchase price).
It really does seem like a gamble, of when do you say when? After the first time margins go under 5%? After the first time you get unlucky on deferred maintanence needs?
More power to you. $600k seems like an awful lot of money to put on the line just to clear $60k.
Cara and Mike yes the exit strategy is nerve racking. I keep a very close eye not on the courthouse as much as the market itself. As we know the market is so heavily manipulated right now, what should be happening and what is happening are two different things.
The 600k to earn 45k is not what was planned. Also we have 3 closings under our belt so we are playing with SOME house money. Jim featured just 1 of our homes and recall we have 7 of them. In fact that 45k is a perfect illustration of our strategy. Actually when we close it will be about 55k. So we had a higher profit margin targetted but after a very short time on the market with no acceptable offers we slashed the price by 30k to be consistent. Our goal is to NOT get caught with property and to stay liquid. So if we don’t get what we want quick we cut and run.
So yes on the outside looking in a 600k investment to make 45 or 55k is an idiots game, but if you look at the whole story it makes more sense then holding a depreciating asset hoping for someone to come in and then getting killed right?
As I said, we are not expert at this but I do feel like we are adhering to a strategy that will help us avoid getting hammered. It is absolutely inevitable that we will be holding properties when the bottom does fall out but we are trying to minimize the probability and reduce the fallout when it does happen.
Definitely the short hold time is key to surviving at this on a small-timer basis. What you’re trying to do is essentially arbitrage but with added lien/liability risks on an illiquid asset. So, to minimize the non-liquidity you are smartly listening to the market when it speaks (or stays silent) and rapidly adjusting your price.
How overlapping are your properties? How much cash are you leaving out there at any given time? That’s got to be the key decision. That and how long this arbitrage opportunity lasts is going to determine whether you end up making or losing money overall. Though I assume you have a baseline scenario in your head for just how fast you think the market could fall in a worst case scenario, and that’s probably not as bad as getting a house that has $50k+ of issues that take time to repair.
Cara are you sure you are not doing this as well? No need to comment on strategy because you called it exactly.
The overlapping is random and is simply based on liquidity we have. Right now we are full or RE and have a little cash if we wanted to buy a cheap condo… which we are trying to. Although 2 of the homes are in escrow, one is past the contingency period and one has not. One home got listed today and one will be in another 2 weeks. Right now we are actually trying to push escrow closings to after Jan 1.
The question you asked is one I would pay for an answer to. I could not tell you how fast the market can roll over but I think within 2-3 months in the case of something rather cataclysmic. As you would agree what we are doing is terribly risking and not recommended at all. We have been lucky and I only wish we started at the end of 08 instead of the middle of 09.
SD – what about capital-gains tax?
You are rolling the equity from closings into other properties, and deferring the capital-gains tax.
But once the music stops, you’ll end up owing fed and state tax on the net profit on every deal. Does having an LLC help greatly, or just a minor benefit in reducing income taxes?
Jim don’t confuse equity with profits. We are getting absolutely hammered on taxes. Here is the worst case scenario, all of the net profits we make are taxed at full income. Our biz is structured as a corp. The corp will pay each of us as employees. Now yes we can defer some of the taxes using a SEP but that is it man. We can also issue dividends rather then pay salaries but you have to watch out for that. You go to far and you get screwed. So even though each investor is reinvesting profit back into the company to increase equity shares, each investor still is getting pounded hard. Normal income man. Both the corp and investor are paying normal employment taxes as well.
Can we play it more aggressively? Yes we can however I am not a fan of messing with the IRS and have more to lose then gain. So that will cost me a few more thousand in taxes. Not good. I am not a tax expert, we use an accountant who is very risk averse.
Sorry if I didnt answer your question directly. The corp doesn’t do much taxwise, it is simply a liability protection purposes. We are paying for taxes at both state and federal levels. Equity is not taxed but profits are. So think of it this way. You invest 100k to buy a home. You make 140k on it. Even if you invest the 40k back into another home, you pay taxes on that 40k this year. It is not at all like 1031 exchanging.
I have neither the money nor the stomach for this, so, no.
The taxes are a killer. That 40k isn’t 40k it’s 70% of 40k or whatever your bracket determines.
At least if you were playing black jack then all your gains and losses would be in a short timeframe such that you just have the net gain to pay taxes on…
Can you even apply your future losses to your current gains? Is that the logic of moving the closes to after Jan 1st? Such that when the music stops it will be in the same year as as many of the gains as possible?
Yikes. The only motivation I can see for putting in this much effort for such a risky venture is (a) because the big boys are making money at it, and you want in. (b) the transaction numbers are so few in SD that you aren’t making enough as a regular Realtor right now…
Cara the taxes are such a killer it is ridiculous.
This business is no different then any other small business. Your losses are your losses are your losses but they only apply to each year they occur in. These sales cannot be treated like capital gains. They dont qualify as 1031 exchanges. Yes the logic of moving our current escrows to close after Jan 1 is due to the income we have already made this year.
As for the reasons I am doing it, it is because I see it as an opportunity. Is it risky? Yes but I don’t view it to be nearly as risky as someone on the outside. The other two investors are electrical engineers as I am as well. My income from real estate transactions this year, (not from my flipping) is very good as well. As I said at the very beginning, what was hard for ME to stomach was to have a couple hundred thousand sitting in a 2% cd. So after taxes I was making what… a little over 1%? I knew with hard work and diligence I could at least minimize the risk, and participate in a market that while manipulated at least I understood the manipulation. I could have dumped the money into the stock market and done great but I don’t have control over that market.
So the risk premium while not pallatable, (or advised) for most people was for me. I will repeat, I do not advise anyone else to try this.