Next Step After First Flip?!

4 Replies

Hello All,

Good News:

After some minor setbacks, including an AC leak in the attic that ruined a 5'x4' section of my ceiling two days before we were supposed to list on MLS, my first flip in Houston hit the market! I received a great offer five days later. While we are still in the option period for a few more days, I have a good feeling that we will close with this buyer. After all hard money fees and normal closing costs, I should walk away with about $30k (before taxes). I'll have to speak with my accountant of course but I'm bracing for about 24% in taxes which would leave me with around $23k.

About Me:

I have been in commercial property management for most of my career (I did a quick stint as a Realtor when I first fell in love with RE), so I was well prepared for almost every curveball this process threw at me. With a portfolio sale that includes my properties set to close on July 1st, I will be stepping into REI full-time.

My dilemma:

While $20k+ every few months would be great as a side hustle, this will now become my full-time gig and I couldn't properly support my family with that income. So I need help coming up with strategies to reinvest my profit from this flip! I've been contemplating switching my focus to wholesale deals for the next six months to pad my bank account for more flips/buy & holds in 2020. I could also take the profit and roll it into another deal that doesn't need a major rehab (I'd be using hard money again).

How would you guys go about investing that $23k for maximum return?!

for a first flip! this is fantastic work. I would say you are a winner even if you break even on your first. I am on the same bout. Did one and stuck with the second. Hard to find a deal nowadays justify all fees and still make decent return. 

I am thinking about start marketing to sellers directly and try to find my own deals. 

Originally posted by @Haider Alazzawi :

for a first flip! this is fantastic work. I would say you are a winner even if you break even on your first. I am on the same bout. Did one and stuck with the second. Hard to find a deal nowadays justify all fees and still make decent return. 

I am thinking about start marketing to sellers directly and try to find my own deals. 

Thanks man, I definitely understand where you're coming from. Buying direct from sellers would always be the best option, so I guess we'll need to invest in some marketing.

@William B. Congrats on the success! Regarding your comments about wholesaling, Be consistent with your mailings or whatever marketing you may choose, this is key. That is a really really nice marketing budget and would be a great way to set up your wholesale business. Just know that you need to get in front of people’s eyes often to get the deals. For some deals they might take 6 months of mailings to get.

I would use a portion of those dollars to do wholesale if that’s the route you want to take and then keep a portion while you look for your next flip so you have money to throw in while using hard money :) but that’s just me! Whatever you choose do what your gut tells you to. You know your goals way better than a bigger pockets person :)

Happy Real Estating!!

Originally posted by @Tanya Rooney :

@William B. Congrats on the success! Regarding your comments about wholesaling, Be consistent with your mailings or whatever marketing you may choose, this is key. That is a really really nice marketing budget and would be a great way to set up your wholesale business. Just know that you need to get in front of people’s eyes often to get the deals. For some deals they might take 6 months of mailings to get.

I would use a portion of those dollars to do wholesale if that’s the route you want to take and then keep a portion while you look for your next flip so you have money to throw in while using hard money :) but that’s just me! Whatever you choose do what your gut tells you to. You know your goals way better than a bigger pockets person :)

Happy Real Estating!!

Thanks so much for your input, Tanya!! I've decided to roll it into my next deal and use anything left after closing/holding costs to market my wholesale business.