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Pipe dream? Or valid plan? Flipping in Orlando, Fl
My husband and I are looking to get into fix and flipping this year, once we move up to Orlando, Fl from Miami, Fl. We will have 100k in cash to invest in our first project for purchase and repair costs. My husband is an elevator mechanic apprentice, and will be on the union bench likely for six months, once we get up there in three to four months. We will have enough savings for living expenses for a year set aside, so the plan is to go full steam during that time that he is out of work. I am a licensed realtor, and will be joining the Orlando MLS soon. The plan is to start out with one home, and see if we have what it takes, and snowball our initial investment from there. Am I crazy, or is this feasible in the current market conditions? Also, with that budget in mind (100k cash for both purchase, repairs, and closing costs), what are some of the best areas of Orlando to look? I've been doing a lot of research and looking around a lot of Orlando, and outside, and just want to narrow it down with some experienced opinions. We will be residing in the Davenport, fl area, and would ideally like our project to stay within an hour in any directions of there, if possible?
Any guidance offered is much appreciated. I'm having a difficult pregnancy, and stuck in bed a lot, so doing a lot of research right now, and just looking to be as educated as possible.
I wouldn't make investing plans while your income sources consist of planned unemployment and non-salaried work
Are your living expenses part of the $100K or separate?
You could leverage the $100K to protect yourself and gain access to funds needed.
Originally posted by @JC Gauthier:
Are your living expenses part of the $100K or separate?
You could leverage the $100K to protect yourself and gain access to funds needed.
The $100k is completely separate from the year of living expenses, and a sizeable 6 month emergency fund. In your opinion, would it be better to start in all cash on a small project, and learn the process, before starting to leverage funds? Or would it be better to try to attempt a larger project immediately through leverage?
Always leverage if possible. Even if you self fund, there are still holding costs. You never know about overruns. Also what happens if you are all in and a great second deal presents itself.
Well, welcome to Orlando! Or soon to be. Opportunities abound in the central Florida area. Flips, buy and holds, short term vacation rentals. The market for investor here is very strong. A lot of our investors are from other states, but they are taking advantage of the deals in Orlando and central Florida. If there is anything I can do, or anyone to need to be introduced to, please let me know.
Originally posted by @Nikki Harmon:
The $100k is completely separate from the year of living expenses, and a sizeable 6 month emergency fund. In your opinion, would it be better to start in all cash on a small project, and learn the process, before starting to leverage funds? Or would it be better to try to attempt a larger project immediately through leverage?
I echo the sentiment of others who have replied that leverage is usually the better route to take then going all in with your own cash. You don't necessarily need to invest in a larger project because your using leverage (keep in mind most lenders have a minimum loan amount of $50k). You can still work on the small project and keep actively looking for new ones and if a great deal presents itself you have the means to jump on it.
Leverage the funds regardless of the size whenever you can.
JC
Good luck with everything.
If your interested, the south of Kissimmee and North of Tampa areas are areas that have lots of cash flowing rentals.
@Nikki HarmonWelcome to BP! I am about an hour from Davenport towards Tampa. I currently invest out to Lakeland in your direction. If you look to do deals this direction let me know how I can help. I recommend finding some REIA meet ups in the area. Have you two thought about the multi unit "house hack" idea? If you found the right one that one unit is move in ready you live there while rehabing the others then flip it and move out. I imagine that could be hard with a newborn though?
Thank you for your feedback everyone! You have definitely given me something to chew on and research further with the idea of leveraging.
@Nikki Harmon, I completely disagree with those who are saying to leverage as much as possible. Do me a favor and reach out to all the people who used as much debt as they could back in 2006 and 2007. I have a feeling you know what the responses will be already. That's the extreme end but still... with no flipping experience the last thing you want is additional upfront costs and a payment weighing you down every month. It will only add increased pressure and could really hurt in the end. I don't understand how people are recommending this to a beginner, that is really terrible advice. After doing a few I would look at how you can use leveraging to your advantage but as a novice I would focus on the basics, like all the aspects that go into flipping a house (it's always more than you expect).
Also, Davenport is definitely not Orlando. Talk to Adrain S. above, he can probably lead you to some good spots in the Lakeland area where you can be all in for under $100k. Whatever you decide to do, expect to spend 20%+ more on repairs and 20% more time than you originally estimate.
Good luck!