I have never done any flips but I have colleagues who have. There has been one rule of thumb that I have heard about flips which I have found to be true through my colleagues, it states "Be prepared to pay double for the renovation and take twice as long than you expected". If you have a background in construction or any form of building know-how then that will help, if you don't then have that rule of thumb in mind.
To lessen the blow on your pocket, I would personally pursue properties with mostly cosmetic damage. If you see a roof in need of replacing, mold, rusting HVAC, cracked foundations (you can tell by cracks along the door frame), watermarks along ceilings and walls, etc. Run for the hills, that house is going to cause a lot of problems for you.
However, if you have good construction background, go for it, it will only strengthen your skills.
I do agree with Brian about buying something that may just need the cosmetic work.
I just sold my personal property which I lived in while fixing (do not recommend this). But I was able to do most of the work myself including plumbing, drywall, mudding, texturing, painting and trim. I learned so much doing the work myself - that is after having family show me how. I made lots of mistakes, but worth every penny. In your case you have to weigh the cost of your time ie: I paid four contractors an electrician, roofer, carpet and window. I probably could have muddled my way through, but it would have taken 4x as long as the professionals. All in all I put close to $20,000 into the house over the last 3 1/2 years.
I hope some of this advise helps. Contact me again if you have further questions.
Maybe partner with a contractor you know for the first one? With them having equity in the deal they are more likely to put in 100% effort and fair pricing since success determines their bottom line.
@Blake Huseman Use hard money lenders, they're asset based lenders, meaning they lend on the property, not your income. That being said they will still wan to see that you are capable of paying the down and monthly payments.
Partner with a money guy.
Partner with a contractor.
And not that I disagree with what the others said about cosmetic flip only. But if you buy right, are super conservative with rehab estimates, holding costs, ARV, etc.., have a great contractor (good luck there), you can get into more extensive flips than just "cosmetic", even for a first one. I'm not even sure how many cosmetic flips are out there these days, and if there are any, an investor who has been around is probably going to get it under contract before you know it exists, unless you're doing your own marketing. Again, it's not a bad idea to find a cosmetic flip, I just don't know how realistic it is to find one, especially finding one you can make money off of.
If you do not have significant cash reserves it is far to high risk to attempt a flip. Flips require significant cash reserves as a safety net against unforeseen expenses.
Flips are very high risk.