Starting out flipping - East Bay or Long Beach

[Anthony Trujillo]

I've finally made the decision to start investing with a flip. I want my first flip to be in an area I know well. So, for me that will be the East Bay in NorCal or in the Long Beach area in SoCal. (Two tough places to start, I know!) I am interested in SFH. This will be my first home purchase so I hopefully I am able to use an FHA loan. I am open to partnering with other investors who can bring funding to the table. Depending on the down payment, finances might be tight when it becomes rehab time, but obviously this all depends on the deal. I would like to connect with investor friendly agents in both the East Bay and Long Beach to find deals. If you're interested in working with a new investor on flips in these areas or can make any recommendations, please reach out so we can connect!

[David Faulkner]

Welcome. Please note that FHA loans are for owner occupied residences, 1-4 units. You will not be able to take on partners on that deal, nor will you be able to take on a major fixer as FHA inspection guidelines are quite strict. The only way to get a fixer with low money down would be the FHA 203k loan, which will again be for owner occupied residence only, but then you will need to do the rehab by the book, with full permits, using only licensed bonded contractors for the work, not so much of your own sweat equity. Other "creative financing" approaches involving options, owner financing, or other non coventional methods may also be possible, but unlikely and VERY difficult to find in a hot market like this one.

These are the rules as I understand them, but would encourage you to do your own independent research to confirm. Most other flippers that buy more distressed properties pay cash from their personal funds, hELOC from other properties, or via hard money lender, but such a lender will likely want to see some flipping/rehab experience and investor/flipper "skin in the game" in the form of a hefty down payment. Don't mean to burst your bubble, but also want you aware of the limitations and guidelines to help inform your strategy. You are wise to invest in areas you know and I would stay physically close to your flip to work there every day. Good luck!