I would like to flip my first home in the upcoming months once I find a property that makes sense. I do have my eye on a select few houses that I'm watching but would like to put together a team to help with the flip. I own my home in NW Hills as well as a rental property in Cedar Park. So I know a few contractors that would be able to help but our list is very slim and we (my husband and I) could use some recommendations (particularly painters and general contractors). I'm also open to finding an investor who would want to partner! I'm a licensed Broker in Texas so have access to the MLS and could list/sell the homes as well. Any and ALL advice is welcome!
(Quick question for anyone reading this: when pricing your flip for sale, are you looking at the 'average' comps or are you pricing towards the higher end? It's quite a wide range of ppsf from the average sold comps and the highest comp and my instinct is to list just below the highest but I"m hesitant to do so since it's my first. The difference in sales price can be $20k+ which really throws off my margin guestimate on the homes that I'm eyeballing right now.)
I'll PM you.
Never factor for the best case scenario. Use the lower comps because you'll certainly make mistakes in your first flip that will increase your expenses and ultimately decrease your margins. Keep in mind that investors in Austin are having to pay far higher prices than would normally make sense and this means the margins are often quite thin. Seasoned investors can get away with this (at least for now) but it's not something you want to bank on until you have a solid team and your processes firmly in place.
Best of luck.
Thank you @Guy Gimenez that's great advice! I was worried that the homes I'm looking at have margins that are too small ($20k-$35k best case priced at avg comps) but that makes sense about Austin being so competitive/saturated that that's probably the best I'm going to find at the stage I'm in now and with little experience and connections. I also figured that my first time is mostly for the learning experience and knowledge, so if I make anything, I should be happy with that!
@Taylor Philley Make sure your numbers are very tight...seen $30K projected profits end up at break-even or worse due to bad contractors, poor management and unrealistic expectations (hold costs, repair costs, etc.). It's a good idea to partner with someone on your first few so you can hopefully learn from other's mistakes rather than your own. My attorney told me something early on that made sense and I never forgot it...
No Deal is Better Than a Bad Deal.
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