A Flip as a first deal? Would you do it?

[Sergio Sifuentes]

Hi BP, I'm trying to start on the Real State business and I'm trying to do a Flip as my first deal. I don't like upfront process of providing the offer to the owner, therefor I'm buying the home from a wholesaler company. So where I have inverted my time is finding a high qualified and recommended contractor that can manage the rehab portion. So the question is.  What is it that I still need to be careful about the flip? If I have a good contractor what else could go wrong? Why many people recommend me to avoid starting from a flip?

[Jeff Stewart]

Sergio,

You'll find a lot of different people with a lot of different opinions and strategies on BP. There is no one-size-fits-all approach. I don't think there is anything wrong with making a flip your first deal. You just have to make sure it really is a deal. Do your analysis and don't fudge the numbers. Don't use best-case scenarios for the rehab cost ARV. You'll go over budget on the rehab, and it'll take longer than you expect. Count on it. And make sure there's enough meat on the bone that overages don't kill your deal.

Do you want to walk us through the numbers?

Jeff