Hey everyone, I had question... Has anyone had any luck with out of state Fix N Flips? I've been looking into certain states that have very low priced properties (in the 5k range) that look like they ARV for around 80k. Some are not the best neighborhoods. But, given if I only had to only pay 5k for the purchase and maybe add 30-40k to the rehab, I'd still have around 20k after everything is paid off. It seems very fascinating to me. Looking for some general advice or maybe someone who can tell me their story? How did the process go? How does having boots on the ground work? And who did or do you have in those states that keep an eye on the rehab process?
@Blaine Conley the risk is not being there and not being able to properly manage the rehab. I would highly recommend building up a team of multiple people (investors, wholesalers, agents, lenders) first before considering rehabbing out of state.
You mention buying properties for $5k. This is a recipe for disaster. There's a reason they're only $5k. And who do you think is going to go do the work? It's going to be difficult finding contractors to go in the roughest areas in their city to rehab a $5k home for $20k amount of rehab for a person that's living out of state.
Save up your money and invest in a better housing market.
I can understand the risk associated with it. I was just curious as to how many people might have found success with type of flipping. I've heard many stories of success with it. It's not something I would start with, but I want to get an idea on how to expand before that time comes. I know BP just had a podcast not that long ago of a woman who bought houses for roughly 5k a house in the Detroit area and rehabbed and made them into an 80-95k houses which I believe she held onto and rented them out. Thanks for advice though, I appreciate any input.
@Blaine Conley she bought those back at the bottom of the market IIRC. That return probably exists today but takes a deep understanding of a market and the team setup to take the deal on and there is way less supply.
I'm in the middle of my first two flips, which happen to be 2,000 miles away from where I live. I bought two good deals on paper but because of capital issues and really brutal Hard Money terms, I'll walk with much less profit than anticipated. Thankfully, I'm going to take what I learn and improve my system.
You can absolutely do it. The downside is much greater not being there since you can't keep YOUR EYES on it, which happen to be the only eyes that truly care about the progress, status, and quality of the work completed.
I get what you're saying. I appreciate your advice. It's definitely something I'll have to look into later on when I get deeper into investing.
This was just something I thought maybe if I did right I could make a couple of bucks on. I wasn't expecting to make a big amount, but even 5k profit after everything was paid would be better than suffering in my 9-5 job right now.
@Blaine Conley why not get your license in the market you're looking to invest in? If you're planning on flipping, the sales commission from the 3% on the back end should be $3k-$5k in addition to any profit you make. $5k should be your profit if the rehab goes over budget and takes longer than expected to exit.