Guidance on flipping and/or buy and hold

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Guidance on flipping and/or buy and hold

Jolene Blazey
Real Estate Agent · Chatsworth, CA · Member since 2016 · 112 posts · 72 votes

Hello,

I live in the San Fernando Valley, in Chatsworth, California. I am so anxious and excited to get started on my investing career. I am currently having a hard time "funding" a deal. I am looking to either flip and/or buy and hold. I put in my first offer which fell through due to my husband being laid off recently. With just my income alone, we did not qualify.

I have called several hard money lenders and all require “skin in the game” and being that I have no capital yet, hard money isn’t an option.. not yet anyways!

I would love to house hack, but there are very few options in my area, and being that we have 3 children, in 3 different schools, (Elementary, Middle, and High School), makes it that much harder to go this route.

I know there are ways to creatively finance, and super open to any ideas anyone may have. I am currently reading "The Book on Investing in Real Estate with No and Low Money Down" by Brandon Turner.

I am really going outside of my comfort zone posting this here but I could really use some guidance on getting out of the rut I am in currently. I am looking for someone who would be willing to show me the ropes and I will contribute in anyway possible in exchange, to bring value anyway I can, I would even be willing to pay a fee for some training/mentorship.

I thought I had found a mentor, he said, “start sending deals my way and we’ll split the profit.” I did just that and he pulled away :( Not sure what happened there, but I got the feeling he wasn’t as thrilled about this industry as I am. Either way, I got the drift, and here I am. Reaching out on BP hoping for some advice/help/guidance :)

I am so eager to continue learning and moving up in this industry to the point where I know real estate so well that I can mentor others in the near future :)

If you know anyone, or you yourself can guide me in the right direction, I will be forever grateful.

Thank you all so much in advance.

Jolene

SFV, San Fernando Valley, California, Los Angeles.

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Cornelius CharlesPro Member
Investor · Oxnard, CA · Member since 2014 · 438 posts · 187 votes
10y

@Jolene Blazey I know at least two hard money lenders that say they will fund 100% of the purchase price AND rehab. I have not done business with them myself, but one of my colleagues has used one of them.  They both lend in Ventura County, so I assume they would lend in your neck of the woods too, but you would have to verify.  If I remember correctly, they both will charge points/interest AND require a large portion of the profit. But hey, some of the profit is better than no profit at all. 

Also remember that they will have their own criteria on what they consider a "deal" and what they will loan on.  Not that I'm an expert or anything, but when I first started out, it took me a little while to realize that what I considered a deal wasn't necessarily a deal by someone else's standard. 

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  • Curt DavisBusiness Member
    Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
    10y

    You should consider wholesaling.  That requires very little funds, mostly for marketing for sellers.  In your current situation, hard money or a bank loan seems out of the question.  

    Good luck

    Curt Davis - KAIZEN Realty538 Reviews
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  • Kalo (Kyle) Atanasoff
    Rental Property Investor · Los Angeles, CA · Member since 2014 · 259 posts · 55 votes
    10y

    Clarify all your financial situation and fund that you have. Also, spend some time to learn and master how to evaluate deals - it can be wholesale deals, rehab deals or just deals for end buyer...

    Also, start attending Real Estate Meeting groups. BP has a few, also FIBI is another option. Send me private message if you have any questions. 

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  • Andrew Posner
    Wholesaler · Montgomery Village, MD · Member since 2016 · 30 posts · 7 votes
    10y

    I agree on wholesaling. I have no background in construction, and so flipping could be very dangerous until I learn more. I also do not have cash to work with, so wholesaling lets me build that so I can do bigger and better things.

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  • Cornelius CharlesPro Member
    Investor · Oxnard, CA · Member since 2014 · 438 posts · 187 votes
    10y

    @Jolene Blazey I know at least two hard money lenders that say they will fund 100% of the purchase price AND rehab. I have not done business with them myself, but one of my colleagues has used one of them.  They both lend in Ventura County, so I assume they would lend in your neck of the woods too, but you would have to verify.  If I remember correctly, they both will charge points/interest AND require a large portion of the profit. But hey, some of the profit is better than no profit at all. 

    Also remember that they will have their own criteria on what they consider a "deal" and what they will loan on.  Not that I'm an expert or anything, but when I first started out, it took me a little while to realize that what I considered a deal wasn't necessarily a deal by someone else's standard. 

    3Reply
  • Tim Soto
    Realtor · Ventura County, CA · Member since 2012 · 126 posts · 61 votes
    10y

    Hi @Jolene Blazey, welcome to BP. Are you limited to your area only or can you look at other markets? @Cornelius Charles has a great point, what may look like a deal to you, may not actually be a deal, especially after considering all back-end costs. 

    One way to get started with little to no capital is to drive around and take down contact information of agents, who have for-sale signs out. I would then reach out to them and see if they can use a part-time assistant. If they already have assistants, I would go on to the next Realtor(R) until I found one, who needs an assistant. Now I would be able to study the real numbers in my market and determine if a property has potential or not. I'm not implying that going to a real estate agent is where you can learn about investing or rehabbing. I believe that this is where you can learn about the numbers because of the data that's available. If you become great with the numbers, now you have value to add to an investor or partner.

    I would also drive around neighborhoods and take down addresses of houses that look vacant or in disrepair, send a post card or letter to the owner, and ask if they're interested in selling. You can also attend area meet-ups and REI clubs to network with investors and other industry professionals. Stay consistent and continue taking action. Good Luck!

    Tim   

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  • Jolene Blazey
    OP
    Real Estate Agent · Chatsworth, CA · Member since 2016 · 112 posts · 72 votes
    10y

    @Curt Davis and @Andrew Posner I have thought about wholesaling myself. I may just try that, thanks :)

    @Cornelius Charles I have heard this as well, but have also heard that you need to have some experience first. I would love to at least reach out and give it a shot. Would out mind giving more info on that? Thank you very much!

    @Tim Soto I am not limited at all as far as area. I am willing to go out further and have even thought about going out of state. I know this sounds super crazy, but I would be willing to give it a shot. I never thought about asking to be an assistant for an agent, this is not a bad idea. If I may ask, once I send out a letters or post cards, and find an owner wanting to sell, what would the next step be being that I have no capital? Wholesale it to another investor? I think I may start wholesaling :) I will definitely stay consistent, I am so eager to get going. Thanks so much,

    @kyle Atans (could not get your name to come up) thanks so much for the info. I plan on attending some more meet ups, most definitely. Thank you :)

    This is great advise. I truly appreciate it. Its a good feeling to see so many people willing to take a couples minutes to help a "newbie" out and its so appreciated.

    thank you all again :)

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  • Tim Soto
    Realtor · Ventura County, CA · Member since 2012 · 126 posts · 61 votes
    10y

    @Jolene Blazey   There are other places around you that, in my opinion, have more reasonable prices and can give better returns like Antelope Valley, among others. 

    Once you receive a response from a letter you send, ask the seller questions. Try to get to the bottom of why they're selling, what's their pain/motivation, and how can you help them solve that problem. Build rapport and be transparent. If the seller is motivated enough, you can probably even negotiate for seller financing, subject-to, or lease option. And yes, you can wholesale it to an investor.   

    1Reply
  • Cornelius CharlesPro Member
    Investor · Oxnard, CA · Member since 2014 · 438 posts · 187 votes
    10y

    @Jolene Blazey

    I contacted both of them about funding my first flip and they both were interested in doing so.  Fortunately, we were able to find other, cheaper sources of money and didn't have to end up using them.  Who knows if they would have actually ended up funding us or not, but at least they did not write us off due to lack of experience.  I am sure some of their decision making when dealing with newbies will be how much equity is in the home.  And if I remember correctly, I think one of them wanted to  have some involvement with the rehab to make sure things were staying on track.  I will send you a PM with their info.

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  • Jolene Blazey
    OP
    Real Estate Agent · Chatsworth, CA · Member since 2016 · 112 posts · 72 votes
    10y

    @Cornelius Charles Thanks :) Appreciate that!

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