What to do? What to do??

Question

As I mentioned in my last post, I am starting out totally new to the game, with a small chunk of money to invest, and my first actions have to to be good.  My problem now is that I don't know what would be the best action to take (aside from researching of course).

I am 30 years old, in good shape, and not afraid of hard work or getting my hands dirty.  I have a lot of experience with renovating, light construction, and general home maintenance.  My husband and our family does as well.  So, I am very interested in flipping houses.

This is where I am stuck...

Which type of sales should I be looking at?  I see foreclosure, sherrif sales, etc.  Should I go to auctions or try something different?  What are the risks involved with the different options aside from not being able to sell the property in a timely manner or unforseen property damage)?

And if anyone can point me in the direction of ligitimate good information, that would be great.  I am a self starter, DIY, spend as little as possible, and make the most out of scraps, kind of person.

Thanks!

Mark N.A · Answer

Jessica:

Before you jump into any type of real estate investing carefully study your own market.  What's working with other investors?

Where I'm at succesful flipping is virtually dead.  Any wholesalers around here have long since starved to death.  Only a very tiny percentage of rentals actually cash-flow, and those are mostly located in management-intensive areas (the hood!) where you'll end up owning for the long term.

So carefully study your market, and if it doesn't fit the simple parameters needed for profitable success, find another market that does.  At least one frequent poster here moved for just that purpose.

Real estate is just one way to put your cash to work and despite the positive hype there are other investment avenues that often offer less work and better profits.

Good luck and keep us posted on your adventures.

Jessica Hood · Answer

Thanks NC.  I am in a position where I can move if it would be in my best interest.  So if it comes to that so I can do what will be more appealing to me, then so be it.  You are right for sure.  The market is going to vary per location so I will definitely do some research here as well.  Thanks!

Jessica Hood · Answer

Getting control without buying?  Definitely a new concept to me.  I will have to research that more.  Thanks Ralph!

Ralph S. · Answer

Wholesaling is not about buying the property, it is about controlling the property.

There is a lot here on BP that explains it in greater detail, but simply put, a wholesaler gets control of a property in different ways, then finds a buyer who's willing to pay more, leaving you with the difference.

Use the BP search facility and search for "wholesale."  You'll find a ton of good information, much more than can be contained in a response.

Good Luck.

Jessica Hood · Answer

So with wholesaling I buy property, don't actually do anything with it physically, and just turn around and resell it??  I think I understand that correctly?  I had never even thought of that.

Jason Simpson · Answer

Hey again Jessica!

I almost always recommend that "newbies" start by wholesaling/flipping properties, and not the "flip this house" kind of flip where you rehab it and sell it to an end buyer.  Basically what I'm referring to is finding a "deal" getting it tied up under contract, and selling that contract to someone that's looking for a deal.  In my opinion, this is the best way for a brand new person to get their feet wet with the least amount of cash and risk!

I've seen too many beginners try and get started by rehabbing a house and overestimate what they can get for the house, and underestimate the repair costs, leading to a quick ending to their investment "career" ...so I'd recommend starting by flipping, and then once you get some experience under your belt, moving to buying and holding to get the cashflow!

Good luck!!