Week 2: First Offer

So yesterday I made an offer on a property to flip for $30,000. I think my wife's head nearly exploded when I said I made my first offer.

She asked me the following questions:

• So how do you plan to pay for this?
• How much was your offer?
• How long will it take?
• When do we get paid?

Do you like how these questions de-escalated down to "when do we get paid?" I thought it was pretty good. I merely described my thought process, my plan, and how to execute.

So week two of being a real estate investor has lead me to putting in my first offer. Are you still with me? Yes, I said WEEK TWO, I put in an offer on a property I want to flip.

I guess you want to know my process don't you? I'll take you through it step by step.

Step 1: Learn your market!
OK, so I started by learning my market. I focused down on what I wanted to do (flip/wholesale). I focused down on a few neighborhoods nearby. I live in a pretty blue collar area. Small track homes built in the 1940s to 1960s. Usually about 800sq ft on the first floor, might  have a finished basement, usually doesn't. A lot of these homes are already rentals. I found a market in a price point that I was comfortable with. That range for me was $50,000 to $100,000 with an After Repair Value (ARV) of $140,000 - $160,000.

Step 2: Set up alerts through your agent or an online syndication like Zillow!
This seems like a no brainer, but I live in a market that moves slowly. So I set up alerts for property that was listed from $0-$100,000. There's a lot of junk in there, mobile homes, a few condos, and some really rough houses. Just through a few sites I was able to find a property that met my initial criteria based on price and what I know about the neighborhoods I'm looking at.

Step 3: Run every single property through the BiggerPockets calculator!
This will give you a rough idea of what the potential profit will be. The nice part is I can specify how much I want to make on a deal. This gives me the number I should look at for my offer. Get good at analyzing properties to see if they make sense for your strategy.

Step 4: View the property!
Now go look at the property if you can. In my case, the house is severely damaged, what appears to be burn damage and has a no entry sign on the front door. The rest of the property is in good condition, so I'm assuming there's major damage on the inside.

Step 5: Make the offer!
So you found your first property and the number make sense to you. Have a local expert look at it. I used my brother as he has worked in construction as a General Contractor for a long time. Then I had my realtor look at the deal to see what she thought of the ARV. She confirmed my analysis and helped me put in the offer to the seller.

Step 6: Have patience!
This is where I'm at now, I'm waiting to hear back from the seller. Seems to be out of town so it may take some time for them to review and make a decision.

Details of the deal: