Looking for helpful advice/insight. Beginner here!

Member since 2024 · 1 post · 0 votes

Hi everyone, I'm writing this post because I want to get into house flipping but I don't know how to start. I would love some insight on how I should start and how to get funding to actually do the house flipping.

please and thank you.

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Kevin Garvey

Realtor · Chicago, IL · Member since 2014 · 29 posts · 12 votes

Lenders will always want to see you use some of your own money so that you have "skin in the game", so to speak. Another commenter mentioned this, but there are definitely some questionable lenders out there and you're better off looking for a better lender on here or through other experienced investors.

From there it's all about hitting deadlines and getting it sold, but I'm sure you knew that part already!

Happy investing!

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Kerry Noble JrPro Member
Investor · Indianapolis, IN · Member since 2018 · 2k+ posts · 1k+ votes
2y
Im open to connecting and adding value
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Tanner Lewis
Lender · Austin, TX · Member since 2021 · 447 posts · 441 votes
2y
Hey Christian, most flippers fund their flips using hard money bridge loans. These are ~6-month interest-only loans that have a balloon payment at maturity. If you plan to operate this product, you still need to have cash to bring to the table as well as enough liquidity for rehabbing (you can get reimbursed through draws, but you start out using your own liquid). There are some "lenders" out there who "do" incredibly high leverage or 100% financing, but be wary of these as they often try to renegotiate terms before closing/run out of capital/go bankrupt. I suggest using BiggerPockets' "Find a Lender" tool to find a reputable hard money lender.
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Kevin Garvey
Realtor · Chicago, IL · Member since 2014 · 29 posts · 12 votes
2y
Lenders will always want to see you use some of your own money so that you have "skin in the game", so to speak. Another commenter mentioned this, but there are definitely some questionable lenders out there and you're better off looking for a better lender on here or through other experienced investors.
From there it's all about hitting deadlines and getting it sold, but I'm sure you knew that part already!
Happy investing!
1 Reply
Simon Ashbaugh
Realtor · Columbus Ohio, Cleveland Ohio · Member since 2022 · 849 posts · 830 votes
2y
Hey Christian, having a reliable team is key. This will be your Core 4. Look for properties with good potential but that may need renovations. The 70% rule is a common guideline the rule of thumb is to never pay more than 70% of the after-repair value minus repair costs
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Jay ThomasPro Member
Real Estate Agent · Houston, TX · Member since 2021 · 1k+ posts · 715 votes
2y
Start by educating yourself online or through courses on the house flipping process, renovation costs, and market analysis specific to Chicago. Utilize resources like BiggerPockets and local investor groups to gather valuable insights and connections. Secure funding for your flip through options like hard money loans, private investors, or leveraging your home's equity with a HELOC. Begin with a smaller project to gain experience, and ensure you assemble a reliable team of contractors, appraisers, and inspectors. Lastly, develop a clear business plan outlining your renovation budget, project timeline, and profit targets.

[email protected]832-889-5607
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Joseph Konney
Real Estate Agent · Forest Park, IL · Member since 2014 · 255 posts · 141 votes
2y
@Christian Anderson - If you have no assets to tap into, you are going to need to find partnerships with those that have capital, or do some hustling to earn the liquidity needed. Another thought would be to get a property under contract at a very attractive price and that could be some equity you bring to a partnership. However, you'd be in quite a vulnerable position as you wouldn't be able to close without a partner or reap any benefit without assigning the contract to make a spread.
For HML, you will likely need more than 10% down without any experience or partner, plus closing costs (which will be high using HML), and then you still needs funds to start the rehab work (lets say 10-20K) before your renovation financing becomes useful.
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Preston DeanBusiness Member
Realtor · Fort Worth, TX · Member since 2021 · 779 posts · 368 votes
2y
@Christian Anderson
One thing to remember when you are getting into RE investing is to have your team of people or as Brandon Turner from the Bigger Pockets Podcast calls it your CORE 4

1. Your contractor

2. Your deal finder (agent/wholesaler)

3. Your property manager

4. Your Lender

My suggestion to find #2 & #4 would be to go to the top of this page and click on FIND AN AGENT & FIND A LENDER. There you will be asked your criteria and then after answering a few questions you will be matched with 3-5 agents or loan officers in your area. My suggestion would be to select someone with the most forum posts or most reviews. That way you know they are active in the BP community!
[email protected]817-480-9452
United Real Estate DFW Properties 565 Reviews
Website View Page
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Chris Poklacki
Specialist · IL · Member since 2023 · 17 posts · 0 votes
2y
Hi Christian, I would like to connect.
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Franco Carollo
Member since 2024 · 17 posts · 5 votes
2y
Quote from @Christian Anderson:

Hi everyone, I'm writing this post because I want to get into house flipping but I don't know how to start. I would love some insight on how I should start and how to get funding to actually do the house flipping.

please and thank you.

Do you have a market and a buy box?
0 Reply
Tanner Lewis
Lender · Austin, TX · Member since 2021 · 447 posts · 441 votes
2y
I suggest reading J Scott's books in the BP store. They're about $12 and give a full in-depth overview of the flipping process.
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Preston DeanBusiness Member
Realtor · Fort Worth, TX · Member since 2021 · 779 posts · 368 votes
2y
Hi @christiananderson
One thing to remember when you are getting into RE investing is to have your team of people or as Brandon Turner from the Bigger Pockets Podcast calls it your CORE 4

1. Your contractor

2. Your deal finder (agent/wholesaler)

3. Your property manager

4. Your Lender

My suggestion to find #2 & #4 would be to go to the top of this page and click on FIND AN AGENT & FIND A LENDER. There you will be asked your criteria and then after answering a few questions you will be matched with 3-5 agents or loan officers in your area. My suggestion would be to select someone with the most forum posts or most reviews. That way you know they are active in the BP community!
[email protected]817-480-9452
United Real Estate DFW Properties 565 Reviews
Website View Page
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Katie Smith
Member since 2023 · 348 posts · 190 votes
2y
Hi Christian! Are you still looking for advice on how to begin? Build your team. Find wholesalers and give them your buy-box so you can find an off-market property. You're most likely going to need to get a hard money loan to fund a fix and flip. Depending on the area and credit score - I can get you up to 90% of the purchase price and 100% of the rehab budget. Have you gotten pre-approved yet?
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Mike Klarman
Specialist · NJ · Member since 2022 · 1k+ posts · 650 votes
2y
Hi Christian, welcome. So, how do you start? Real Estate is a game and it has game pieces and a playing board. It's your job to know the role of the game pieces and position them on the board in a way that most suits your bottom line. Who are the game pieces? Lenders, agents, wholesalers, brokers, contractors, distressed sellers, capital sources, gurus, internet forums on real estate, other investors. Know the game pieces and know how best to maneuver them.
It takes some time to set the board up the right way.
Anyone with credit of 680 or better and capital can get started. Capital is the big barrier to entry for most. You really need 50k to start and then make sure you get into the right market where your exposure on any one deal all in is 25k.
I advise people all the time on how to get started. I helped lots of BP members get into deal 1. I'd be happy to talk to you about how to make yourself ready.
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Franco Carollo
Member since 2024 · 17 posts · 5 votes
2y
Quote from @Mike Klarman:

Hi Christian, welcome. So, how do you start? Real Estate is a game and it has game pieces and a playing board. It's your job to know the role of the game pieces and position them on the board in a way that most suits your bottom line. Who are the game pieces? Lenders, agents, wholesalers, brokers, contractors, distressed sellers, capital sources, gurus, internet forums on real estate, other investors. Know the game pieces and know how best to maneuver them.
It takes some time to set the board up the right way.
Anyone with credit of 680 or better and capital can get started. Capital is the big barrier to entry for most. You really need 50k to start and then make sure you get into the right market where your exposure on any one deal all in is 25k.
I advise people all the time on how to get started. I helped lots of BP members get into deal 1. I'd be happy to talk to you about how to make yourself ready.

Great info! I’d love to connect with you and talk to you about obtaining my first deal!
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