Hello bigger pocket family. My name is Harold Winchester jr and I am 20 years old looking to stop working 9-5 job and become my own businessman. With that being said, my question to you all is how do I start off without any money to put down nor any established credit (Yet)?
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With no credit credit and no cash to work with, I think you need to build up cash and experience. You might want to look into wholesaling as a first step into REI, but I am sure others on BP can tell you more about that.
Hey Harold, if you have no money down, all you need to do is to find investors who want to make money form fixing and flipping then find and manage the project for them in exchange for say 40-50% of the profits. I fix and flip using other people's money, I barely have any of my own money in the properties when I fix and flip.
It is great to have drive and ambition. Those traits will take you far.
Now for reality. there are some core skills that you will need to develope before you attempt your first flip. The good news is that you have found a place that houses all of the info that you need.
At a minimum you will need to understand MAO, ARV, and repair estimates. Then you will need to understand contracts and how to use them to controll your contractors. Once you have those topics down, then you need to actually go out and find a house where you can create a spread between your purchase price + repair cost and your after repaired value or selling price.
You will need to understand the concepts above so that when you approach a private lender or a hard money lender, you can explain to him, why your deal works.
Dont forget to expect some sort of oooops factor, because something will go wrong on your first flip and if it doesnt then it will go wrong on your second. Just expect that and dont be stressed by it
The hardest part is finding the right contractor. There is a weird matrix between quality and availablity. The best guys arent available and the ones who are always available suck. take some time and find a good one who has references, licenses, experience, and insurance.
If any part of the jargon that I just threw at you is hard to understand then you need to stay on this site and keep reading until you can write an article about what I just said.
It would also make a lot of sense to network with successful flippers in your area. If you dont know any, then get yourself to your local REIA club.
It is best to approach your first flip with a bit of caution. I can assure you that it is harder than it looks on tv
To your success
Welcome to BP sir!!
Drive, ambition and advice will take you a long way. You supply the first 2, BP is never short on the 3rd.
You mentioned that you lack money and credit. I recommend that you establish both. Set yourself a budget and pay into a "real estate fund" after each paycheck. Budgeting is an, maybe THE MOST, important skill for REI.
The next item to establish is your credit. Grab yourself a credit card and treat it with the respect it deserves. I recommend another dedicated account for paying the moderate balance off each month. If you put something on the card, IMMEDIATELY deposit that amount in the "CC payoff fund."
Your REI career will be MUCH easier if you have both money and good credit. There are plenty of ways to buy with none of either but it significantly simpler with both in good quantity.
Best of everything in your ventures!!
Thank you all for the useful knowledge, I truly appreciate it
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