House Flipping as a Newbie
As a first time investor, I see many people house hacking. Which is wonderful way to break into REI. My question is not for house-hacking advocates.
Has anyone ever went into house flipping for their first REI property? I love to hear feedback specific to how that went and receive any advice on the process as a first time REI.
@Sparkle Carlock I have not done a flip but I have tried. I had difficulties getting properties under contract at the price I needed them to be. Starting out I was always told to be cautious with my numbers. I was and it always limited me on getting into the first deal. Maybe this was a good thing to prevent me from making a bad decision. To get into the first deal you will need to get over the fear of all the things that good go wrong as it could limit you from ever getting started.
investing with someone that can guide you how it's all done could also help take a good amount of fear away from getting started. Good luck!
@Tanner Pile, Thank you so much! I feel that I am ready to learn more and get "boots on the ground". Also, financially, this is how I want to start. I believe it is possible, with the right guidance.
My Mentor and I have at least 2 Flips going at one time! We have a construction team that has major discounts and does 1st-class work!
What I will say is that you should look at every MAJOR number and overshoot them so you don't come up short. The main things to focus on is:
1. Location: Is there new builds in the area or construction within a mile radius on the Property you are looking to Flip?
2. The Repairs Needed: Either use an inspector or look at the house top to bottom. Every flip I've been apart of started with me going into crawl spaces all the way up to the attic.
3. Numbers: Decide how much money you wish to profit. Then look at the following numbers: Price Point, Repairs (Send me a message if you need a great Contractor that works for me and could quote all the repairs), ARV ( Obviously run a CMA and be as precise as possible).
4. Execute: Flips can look intimidating. If the numbers make sense, go for it!
Message me if you ever need anything, would love to help!
#2 Starting Out Contributor
- Investor
- Austin, TX
Your first property is going to be a nightmare, prepare for it. Your contractor is going to under budget, and you’re going to be spending a lot more money than you anticipated. Make sure you buy the deal right.
Quote from @Sparkle Carlock:
Flipping is tough to get started. There's a lot to learn and you can expect to make a lot of mistakes, particularly in the first few. You may pay too much, underestimate the cost of renovations, definitely underestimate the time required to complete the renovations, not sell it for as much as you had hoped, etc. A lot of beginning flippers lose money starting out.
I would also be especially careful right now. We just hit a peak market less than a year ago. The odds of a market slowing or dropping is still pretty high. What if you are mid-flip and the market drops 10% or rates increase and the buyer pool dries up?
#5 Rent to Own a.k.a. Lease Purchase, Lease Options Contributor
- Investor
- Fort Lauderdale, FL
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#5 Rent to Own a.k.a. Lease Purchase, Lease Options Contributor
- Investor
- Fort Lauderdale, FL
House hacking and first deal shoudn't be your entry into real estate investing. You will make mistakes and they will likely be expensive. I say this from first hand experience, losing $25K on my first hack. That was years ago and I can laugh about it now, but at the time it was painful, to say the least. There are less risky strategies for the new-kid-on-the-block.