Real Estate Secrets: How Jonathan Hayes Flips Houses to Grow Wealth
On this episode of The Closing Table, we sat down with Jonathan Hayes!
To watch the full episode, check it out on YouTube below. In the meantime, here’s a summary of the conversation…
Here’s what you missed from Jonathan Hayes…
Jonathan’s journey into real estate was not a straightforward path. Starting as an electrical apprentice, he found early on that he enjoyed hands-on work, often saying, “I always liked working on houses.” However, a serious setback — tearing his ACL — left him rethinking his financial future. While recuperating, he found inspiration in Rich Dad, Poor Dad, a book that sparked his interest in financial freedom. This turning point led him to pursue real estate, motivated by the prospect of self-sufficiency and investment opportunities.
Jonathan’s first foray into real estate was a cabin that required significant repair. Despite his enthusiasm, the project resulted in a financial loss. Undeterred, he made his next move by purchasing a foreclosure at an auction in Windsor Locks, Connecticut, which proved profitable. “I did really well on that one,” he reflects.
Building on this success, Jonathan has completed six real estate transactions within a year and a half since obtaining his license, mainly focused on renovating and flipping properties. His background in various trades has given him a unique advantage. “I know how to do most things,” he says, an attribute that also strengthens his community ties, especially through martial arts and local involvement.
Next, Jonathan believes that financial literacy is a cornerstone of successful home buying. Advocating for a disciplined approach, he encourages clients to save consistently, explaining that “tithing to oneself” is key to achieving financial freedom. Long-term client relationships are essential to him, and he cautions buyers to consider their financial realities carefully. Reflecting on the advice he once received from agents, he notes, “I refuse to do that to someone else.” His goal is to guide clients toward sustainable decisions, ensuring they avoid the pitfalls of overextension.
When advising first-time home buyers, Jonathan encourages them to think beyond immediate costs. “Are you content with getting up at 7 a.m. every day?” he asks, prompting clients to consider the ongoing responsibilities of homeownership. Jonathan also highlights hidden costs, such as property taxes, reminding clients that these obligations persist even after a mortgage is paid off. “It is what it is,” he says, underscoring the reality that certain costs, like taxes, are inevitable.
For first-time buyers, Jonathan recommends Connecticut’s Time to Own program, which offers financial assistance. This grant, initially $10,000 but now $8,000 after September 3, can go towards closing costs or the purchase price. One client, for example, was able to have their earnest deposit covered, resulting in a zero out-of-pocket purchase, with only monthly payments. Jonathan dispels the myth that buyers need a large sum saved, emphasizing that income, credit, and employment history are often more critical factors. He advises consulting with a mortgage broker to explore the various programs available.
For new buyers, Jonathan suggests considering a multifamily home, as tenants can provide additional income, transforming a home from a liability into an asset. This approach, he notes, reduces the financial strain of homeownership and can improve mental well-being by alleviating the anxiety of meeting bills. It’s a way to make the most out of homeownership by incorporating investment benefits early on.
Jonathan’s advice to sellers centers on timing and patience. In competitive markets like Connecticut, he encourages sellers to wait for multiple offers, allowing buyers to compete. Conversely, he notes that in markets like Florida, sellers might need to consider any reasonable offer due to different market dynamics. By adapting strategies to market conditions, Jonathan guides sellers to make informed decisions.
When it comes to property flipping, Jonathan cautions against buying on the open market, where competition can inflate prices. Instead, he advises focusing on off-market properties, such as foreclosures or bank-owned listings. Auctions are another avenue, offering opportunities to negotiate directly. Jonathan stresses the importance of remaining unemotional, keeping an eye on numbers and potential profits rather than becoming attached to any specific property.
Following that, Jonathan emphasizes conservative cost estimates for profitable flips. By analyzing comparable sales data (comps) on platforms like MLS and Zillow, he ensures that each project has a viable profit margin. While personal involvement in repairs can yield significant gains, he warns that flipping is labor-intensive and requires substantial time and effort. A clear margin is essential to justify this investment.
An honest tradesman is invaluable, Jonathan believes. He recommends relying on referrals from friends and family rather than online listings, and he stresses the importance of understanding potential repair values. This approach helps avoid unexpected expenses, ensuring that after-repair values align with both initial investments and repair costs.
One of Jonathan’s core lessons is not to let emotions drive buying decisions. He advocates for thorough due diligence, noting the importance of having knowledgeable support, such as someone skilled in repairs, present at showings or auctions. Jonathan also cautions against working with realtors focused solely on their commission, reminding clients that reliable support is crucial to a successful transaction.
A common misconception is that buyers need significant savings to purchase a home. Jonathan points out that various financing options, such as hard money or flipping loans, make homeownership accessible even with limited funds. However, he stresses the importance of financial stability, highlighting that a strong credit history and consistent income are fundamental to securing favorable loans.
Physical activity is also a central part of Jonathan’s success. Rigorous workouts help him manage daily stress, while the endorphins released improve his overall mental health. Music is another outlet, and public performances bolster his confidence, which he carries into his real estate dealings. Jonathan believes these hobbies contribute to a well-rounded life and enhance his ability to engage with clients.
For Jonathan, multiple hobbies foster balance and provide life skills that complement his real estate career. “When you learn how to fight, you’re going to be better at music,” he notes, recognizing that skills from different areas can enhance each other. The discipline from martial arts and creativity from music add layers to his approach in business and personal growth.
Recently, Jonathan encountered delays with a foreclosed property purchased at auction. Despite court approval issues, he prepared by lining up contractors and organizing a cleanout. “Even when you’re stalled, when you have no route forward, there’s other things you can do to prepare,” he says, a testament to his proactive approach to overcoming obstacles.
Looking ahead, Jonathan plans to complete renovations on his current property, a hoarder’s house, while also aiming for additional flips. His long-term goals include owning rental properties to build a steady income. For him, each flip is a step toward financial security, not just short-term gains.
Check out Jonathan Hayes:
https://www.instagram.com/jonhayesrealty/
https://www.zillow.com/profile/jon%20hayes5
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