Real Estate Investors · Springfield Gardens, NY · Member since 2015 · 15 posts · 0 votes
As we all know the market in DFW is very hot, do you think this would be a disadvantage for us trying to flip our first house?
We were thinking of going to a private money lender that reached out to us and he has offered to pay 80% of the total cost (purchase, rehab, closing costs & 6 months IO) or 70% of the ARV. He mentioned that we had to fill in submission forms, we didn't get a chance to ask what those forms were because it was after business on Friday when we saw his reply. Are these general forms like any other loan request form?
The only problem about doing a flip in DFW is the travel during the flip, do you believe it would be better for us to get a sublet during the flip and stay down there until it is finished or to stay for 2 weeks there and come back to NY for a week and go back again?
I'm sorry for all the questions guys, looking to get some well needed advice from my fellow BP community. :)
Why would you pick DFW to flip a house? As you know, the market is very hot...unless you can source your own deals, you're probably going to overpay. I've had to go to tertiary markets for my non-self-sourced deals for reasonable margins. Add in travel and lodging costs, and you're looking at a lot of work and risk relative to your profit potential.
Why would you pick DFW to flip a house? As you know, the market is very hot...unless you can source your own deals, you're probably going to overpay. I've had to go to tertiary markets for my non-self-sourced deals for reasonable margins. Add in travel and lodging costs, and you're looking at a lot of work and risk relative to your profit potential.
Hi Chris,
Thanks for your response. Do you know another market that would be beneficial for a flip?
I really only know my home market well enough to offer any advice, but I read a lot of good things about Indy, Memphis, and KC. Really, it's all about the ind. deal, as there are good and bad deals to be found in most markets. Personally, I wouldn't want to do a long distance flip, although others have done so successfully. Passive investing to me seems like a safer long distance bet.
I really only know my home market well enough to offer any advice, but I read a lot of good things about Indy, Memphis, and KC. Really, it's all about the ind. deal, as there are good and bad deals to be found in most markets. Personally, I wouldn't want to do a long distance flip, although others have done so successfully. Passive investing to me seems like a safer long distance bet.
This is a very good advice for you Shana!
If there is one area where Real estate investing is just like stock market investing; if you try to invest in the "hot stuff" (city/market/stock of the day) then your too late. You'll be buying high and selling low.
If this is your 20th flip and you're ready to explore new markets for HIGHER margins then go out and venture but is sounds like it's your first flip ever, in that case, I'd try to find a cheap, close by, alternative. This way the lessons you'll learn (and trust me you WILL learn them) will not cost you as much.
I agree with @Chris Soignier that there is a lot of risk doing this, especially if this is your first flip. The DFW market is extremely competitive right now. It is a seller's market, so flip properties where you can make a reasonable profit are few and far between. Also, since you are not living in the area do you have a good team (contractors, lawyer, accountant, real estate agents, etc.) in place to help make you successful? Run your numbers (including your travel costs) and make sure this deal makes sense.
Everyone above is on point. The DFW market is tough, great deals are far and few between. Doing anything long distance is tough. Lessons will cost you money.
At the same time as investors we can't allow market conditions derail our business goals. Regardless of where you look there are deals, contractors and various other business relations worth their weight in gold. It's easier said than done but you just have to find them.
If what you seek is advice I'd say figure out what you want and don't want in a deal. Then be ready to act when the deal shows up. Good deals don't last.