Table of Contents

  • Lukas Vanagaitis wished to flip properties but failed to have the money to do it. 
  • He commenced by wholesaling home and then started to buy and flip houses. 
  • But it was not right until he began to spend in St. Petersburg, Florida that he grew to become lucrative. 

Lukas Vanagaitis immigrated to the US from Lithuania in 2015 right after winning the eco-friendly card lottery. 

“I experienced $3,000 in my pocket and didn’t communicate any English. I landed in LA with a one particular-way ticket and a bunch of career interviews,” Vanagaitis explained. 

He experienced a degree in architecture that landed him his initial task in Las Vegas. He was earning $31,200 a yr, in accordance to an offer letter considered by Insider. But although working there over two a long time, he recognized it was an quantity that would not go pretty much.  A limited earnings in an costly metropolis intended he was paying more than he was building and racking up credit card debt. 

“I was barely generating ends meet up with. I was living in the apartment with actually no furnishings,” Vanagaitis reported. “The first place that I stayed in experienced bullet holes. So my start out in America was actually challenging.”

He advised Insider that when he labored his desk occupation, he’d pop on his headphones and pay attention to limitless hours of podcast material about actual-estate investing. Vanagaitis enjoyed the plan of purchasing and flipping houses. When he was only 15 years aged, he inherited a piece of residence from his grandparents that he expended several years correcting up with his allowance. And he preferred to make a profession out of it.

“Every solitary working day I was educating myself,” Vanagaitis explained. “At the similar time, I did not have any revenue. I was trying to occur up with a tactic [to start] since I was as broke as you can get.”

His 1st sale 

He read about wholesaling, a approach that failed to will need any capital to start. It just required securing a contract with the assets owner to resell their residence for a tiny share of the sale selling price in return. This is a popular and likely tedious way to get into true estate without having getting on far too much risk. 

The major impediment would be obtaining a residence owner who’d be keen to take part. 

Vanagaitis mentioned he made the decision to find absentee homeowners who did not reside at their addresses in the Las Vegas area. It was an notion and useful resource he took from the “More substantial Pockets” podcast. 

The downside of this procedure was to start with, the record expense $400, and 2nd, he experienced to reach out to thousands of owners just before he observed one particular that agreed to promote. 

“It’s pretty vital for someone who’s just obtaining began to not give up for the reason that it took me nine months. Every day I would occur again from get the job done and quite a lot from six to midnight, for 6 hours, I was writing handwritten letters and I was mailing them to these absentee entrepreneurs,” Vanagaitis stated. 

“There are companies who will mail them immediately for you. I was handwriting them mainly because I failed to have the cash to fork out for that company,” Vanagaitis reported. 

He last but not least observed an owner who experienced a distressed home they wished to get off their arms. Vanagaitis achieved with the operator and seen the home. They then negotiated for a pair of months right up until signing a getting agreement. 

Vanagaitis reported he then employed on-line resources this kind of as Craigslist and Facebook Market to find probable purchasers. And inside three weeks, he discovered a customer. His pretty first transaction netted him $5,000, a look at which he framed. A couple of months later, he give up his job.

But the conclusion to depart failed to arrive from a self-assured location. In fact, Vanagaitis hadn’t been in a position to stick to via with a second productive deal before he made the decision to forfeit his paycheck. 

“I could not relate to Vegas. I hated my position, I was getting worry attacks and I did not have any money to move,” Vanagaitis said. “It was extremely difficult on me to make that final decision since I felt trapped in Vegas. And I assume the inspiration to leave was way far more critical than the total of cash that I had at the time.”

He also resolved to promote the house he inherited in Lithuania. This banked him about $100,000, which gave him a feeling of economical convenience, he said. He then moved to Houston, Texas.

“And then after two yrs, so we are chatting about late 2018, I was broke yet again. I was again to square one,” Vanagaitis stated. 

High-priced problems

He experienced partnered up with a few other people today and they began flipping home that experienced been ruined by Hurricane Harvey. They applied really hard money loans to fund the method. But these properties experienced serious damages and needed a large amount of do the job. 

A second important oversight was that several other actual estate investors ended up undertaking the identical, flipping weakened homes. So by the time they concluded about 6 properties, there were numerous other homes for sale. 

The total of provide that abruptly grew to become out there intended that potential buyers had possibilities and could underbid the asking. 

“We did not have experience. We overspent for renovations since they were flooded residences. We had to employ the service of qualified companies to remediate these properties. We had to put new drywall, and do all of these extra points that we didn’t spending plan for,” Vanagaitis mentioned. 

He ongoing, “And then we offered them for undoubtedly considerably less funds than we originally imagined. Additionally our renovations took way lengthier than expected. So our interest gathered on this home. And we ended up paying out our personalized savings to fork out for our own living costs.” 

“I didn’t like Houston, just as a lot as I didn’t like Vegas. It was also a cultural change. I failed to vibe with the town. And I started off possessing stress assaults yet again,” Vanagaitis mentioned. 

Finally, Vanagaitis made the decision to shift to Florida where he experienced loved ones. He finally zeroed in on St. Petersburg, a metropolis that is surrounded by water. This means there is constrained source. He took all the classes he had figured out alongside the way and started to flip homes there. This time, he applied a distinct approach. 

Since he no for a longer period experienced dollars on hand, interested buyers would order the property and fund the rehab, even though Vanagaitis would put in only sweat fairness during the rehab course of action. When the house was completely ready, the trader would be certain 10% earnings, and just about anything previously mentioned that would go to him and his enterprise associates. This intended he did not will need cash or a loan to continue accomplishing what he loves.

In 2020, just one of the LLCs Vanagaitis co-owns with a small business husband or wife, which retains six homes and flips a number of residences a calendar year, attained $600,000 in product sales, in accordance to a duplicate of its tax return viewed by Insider.