This month, we caught up with Cedric Williams, a real estate entrepreneur in Colorado who’s worked with Groundfloor on several projects. We chatted with Cedric to learn about his journey into real estate and what his biggest piece of advice is for prospective flippers.
How did you get into home renovation/house flipping? How long have you been flipping houses?
I first entered the real estate industry about five years ago. I was initially just renting out properties, but when one of my tenants inquired about buying my property, I started thinking more about flipping. I asked my realtor how much I’d make selling that property and was blown away by the answer – even without having put a ton of work into it, I was looking at a $70,000 profit! I knew I’d stumbled upon a great way to grow my real estate business. After that, I began learning all I could about flipping properties. I networked, took seminars, and did everything I could to educate myself. It wasn’t easy, but it’s definitely been worth it!
Fast forward to now, and I have a thriving renovation business in the Denver area (my hometown) and in Atlanta. These two markets continue to grow and properties to renovate continue to become available, so I’ve stayed busy! I’m fortunate to have found great people to work with in both locations.
How many projects have you completed? How many are you currently working on?
In the last five years, I’ve completed over 30 projects. I’m currently working on seven – two in Atlanta and five in Colorado.
What is one of the most important things that you take into consideration when you are completing a real estate project?
I’m numbers-driven first and foremost. With each project, I’m looking to make at least a $50,000 potential profit. Additionally, I’m always looking out for ways that I can add value to a property. Because I’m currently focused on flipping, I want to make sure any property I renovate will sell well. I prefer homes that have at least three bedrooms and one or two bathrooms, and where I have the opportunity to create an open layout.
Has the recent housing shortage affected your business? If so, how?
I’ve been lucky in that I haven’t seen much of an effect on my business. Since I am a full-time flipper, I have built a business reputation and pedigree that makes me stand out in the markets in which I work. I’m also constantly looking for deals in both locations – my team puts out an average of 50 offers per week between the Denver and Atlanta areas – so I’m always in the game. Anything that’s a potential deal, I want to have an offer on it. People are paying more money for the fixer uppers in both markets, so it’s really about being prepared and consistent so you can find the deals you’re looking for.
In the end, regardless of whether the market is up or down, I’ll still find a way to bring in more business. I’m a strong believer in vibration, in the idea that what you put out into the universe is what you get back. As long as we are consistently hustling and putting in the work, we will find more deals.
You operate your business in two different markets. Is it more difficult flipping out-of-state vs. in-state?
Definitely! Since I’m not physically in Atlanta, I have to make time to travel out there frequently to check in on my team. I typically like to go out a couple of times a month to monitor the progress of my projects and make sure everything looks good. But if you invest the time and energy in getting the right people on your team, you can take your business anywhere.
How did you find Groundfloor?
As I was growing my business, I was on a serious hunt for a lender that could scale with me and that I wouldn’t have to constantly come out-of-pocket with. After a lot of online searching, I found Groundfloor. I couldn’t believe what they were offering! Groundfloor was able to provide me with 100% financing through their Loan100 product, which was a game-changer. Instead of waiting 5-6 months for deals to close, I can complete two or three deals at the same time using Groundfloor and maximize my profits.
What has been your experience working with Groundfloor?
Working with Groundfloor has been great, very smooth – they have all of their ducks in a row to make things easy and seamless. I also really appreciate that Groundfloor is willing to work with you to get a deal completed. A lot of lenders out there will simply bow out of a deal if any issues crop up. By contrast, the Groundfloor team is much more focused on finding a way to make the deal happen in spite of any issues encountered. They truly have a positive outlook and a can-do attitude, which I resonate with.
I also appreciate how easy the draw process is with the online portal. Groundfloor does a great job getting inspectors out in a timely manner so you can keep the project going with minimal interruption. Jeff [Seal, Director of Originations] in particular has been great to work with and is very communicative.
What are some of your goals for your business in the next few years?
My goal for Atlanta is to flip at least six houses per year, and my goal for Denver is to do at least ten a year. Once I build up my portfolio, I’d also like to dive back into developing rental properties and Airbnbs using the BRRR (“buy, renovate, rent, refinance”) method. Finally, I’m aiming to expand my business into markets in Florida.
If you could give a newer flipper one piece of advice, what would it be?
First and foremost, get yourself a mentor that’s actually out there flipping. You can take all the seminars and get all the education in the world, but there’s nothing that beats actually shadowing someone. Those training courses won’t teach you how to communicate with contractors or make sure they aren’t taking advantage of you.
Additionally, it’s important to keep in mind that this business is much harder than how it looks on HGTV. If it was that easy, everyone would be doing it. So you need to be mentally prepared for the inevitable headaches that you’ll encounter. Be sure you’re ready to problem-solve quickly when (not if) you run into a problem. And to help with this, it’s important to be liquid!
Finally, make sure you’re buying right. You don’t make money when you sell; you make money when you buy. Don’t let your margins become too tight, and make sure you have a good grasp on your comps and the valuation of potential properties.
Thank you so much, Cedric! It’s a pleasure to partner with you!