I’m 21 i want to start flipping houses in my area (Baltimore) but don’t know where to start I’m in school for psychology to be a doctor but i really want to invest in real estate too.
I watch videos about it all day and read articles, and probably will get my real estate license soon just to learn more and have more connections.
I’ve asked a least 5 people i would run a business with if they would like to start flipping houses with me and they’re all procrastinating, saying it’s too much, or whatever excuse is out there.
At this point i just want to dive in by myself, but i need a plan and a mentor. I know i need a hard money loan, a contractor, probably a house inspector, and many more things. A decent budget, etc. !
It’s a huge risk doing it, and even more if you’re doing it by yourself but I’m really eager to learn so I’m really open to advice.
@Tyana Blackledge , Your prospective business partners not working out will probably be one of the best things to happen to you. Sometimes we feel like we need business partners when we are a little lost, because nobody likes to be lost alone. It's much more comforting to be lost with someone else. I did the same thing when I first started, and nobody was as amped about it as I was. Looking back I'm glad I decided to fly solo.
How much capital do you have, if any? Your answer to my question will have an impact on the direction I'd suggest you go.
@Justin Hammond thank you and everything you said is true!! I’m definetly lost and would feel better if i wasn’t lost by myself 😂! And at the moment i don’t have any which is why I’ve been looking into loans
@Jared Sandler you need insurance? See i didn’t even know that lol
@Tyana Blackledge , that's similar to how I got started. I didn't have any capital either. One thing you'll have to consider is that even if you have a good hard money lender, you'll still have to have some "skin in the game" or money that you bring to the table. If you don't have any yourself, you'll have to convince an equity parter to bring that money in to your deals.
In my opinion though, I would focus on one thing: finding a good deal. If you can actually find a really good deal, you can take it a couple different directions: 1) you can wholesale it and make some money, then rinse & repeat. or 2) you can bring that deal to a good flipper in your area in exchange for a piece of the pie and a ride in the passenger seat throughout the whole thing.
Once you find a few great deals and get them under contract, you'll really start to see options opening up. Best of luck to you!
Firstly, we are in the best platform to learn, network, and gain confidence in Real Estate Investing. I think after you get the realtor license you going to meet plenty of people that will help along the way, however, you will need to do your part and be consistent ( I am saying this also for myself because it is constant work) but you will do fine,
What actually helped me the most was shadowing a person that had experience and knew what they were doing. I still made multiple mistakes on my ventures as a newbie but I also side stepped dozens because I saw them happen in real time before. Also, many I know invest in other projects as a jv partner. It gives them credibility in regards to being on an actual project, in addition to gaining experience while earning money at the same time! I actually learned condo conversions by investing in the project.
@Justin Hammond thank you for the advice!
@Claudio Salvatorelli very true! Thank you !
@Mark Cruse that’s exactly what i need to do (shadow) that’s how i learn best but there isn’t anyone in Maryland that i found yet that is open to having a mentee for a decent price anyway
@Tyana Blackledge I never actually paid anyone for mentorship. I shadowed a handful that were cool with it or invested as a JV partner on a project I was interested in. What I was suggesting is to directly invest in a project from someone that is raising money. It has to be someone that is experienced with a proven track record. You have to be very confident in their integrity and abilities. They benefit from you investing and you benefit from directly and actively working on a project being executed in real time. I have done this and seen this work successfully multiple times. There are many other ways but in my opinion itś much better to invest 25k in a project while you get principle and interest back and an education to match. Works better than paying a mentor 25k to 50k for the education directly. You are out of the funds which will never come back and you have to hope the education provided was legitimate / effective.
@Mark Cruse thank you! How did you find your mentors?
@Tyana Blackledge maybe I’m off track! I’ve been wrong before! What if you started with Re wholesale till you have some flow to throw into a Fix and flip? Most wholesales deals have little cost, hard to find but worth it in long run. Just thinking of other angle
@Tyana Blackledge actually, someone here on BP reached out to me when they understood what I was trying to do. She allowed me to follow her project and wanted nothing in return. She allowed me to avoid many mistakes on my first flip. The best way to find this is go to meet ups and heavy networking. People invest in my projects but not a necessity. Once I get on my next, people are welcome to follow!
@Gary Bimbo what’s the difference between wholesale and flipping? I always see people talking about that though
@Mark Cruse thank you! Hopefully i can encounter that too lol!
@Tyana Blackledge a wholesaler is the middle man or woman between a home seller and a the buyer. Essentially you get the seller under contract and then assign that contract to a buyer for a fee of your choice. So if you get a house under contract for 70,000 and you want to charger a 10,000 assignment fee, you find a buyer who will buy it for 80,000 and you'll get your 10,000 assignment fee.
Its a lot more vital details but that's the general picture.
A Flipper is someone who buys a home puts work into and sells it at a market price.
When your ready don't wait on anyone else to be ready. If time passes by and you were waiting on other people you can blame yourself.
Trust yourself before you trust anyone else.
Good luck out there
The number one thing you need is discipline. Have conviction in your numbers and be able to back them up.
Don't just assume because something feels right and don't chase a deal just because you really want it to work.
The number one edge any investor can have is discipline when deploying capital.
Avoiding losses is just as valuable (arguably more valuable) than making gains.
Always remember that you need to hit 100% return on your next shot if you make a 50% loss on your first shot.
Have you thought at all about house hacking first to get your feet wet?
@Jessica Brennan I’m also new.. what is house hacking?
@Nate Pena it’s buying a house, living in it while you - yourself rehab it. You “cut your teeth” on your own property.
Build your team first, I agree about having discipline, but find a Realtor, a money person, Contractors (electric, plumbers, HVAC, roofers) they work in homes daily, they may know if a deal. Get a good Cpa and real estate attorney, a good title person who can run titles to see if there are liens on a property. There are so many people on your team, do the leg work now to find them. You will be thankful later.
Good luck with your house flips! Enthusiasm will help you through tough times.
Another decent strategy is called the Live in flip. Buy something you want, move into it and fix it up. After two years you can sell without capital gains tax. Could be a great way to build up capital to do your shorter term flips in the future. Or you can partner haha.
@Nate Pena You can start simple and buy a Single Family Home (SFH) and rent out a bedroom or two, or purchase a duplex live in one side and rent out the other, typically you want the rented side to pay for most if not all of the mortgage on the property, so you get to live for free. Feel free to message me if you have more questions
@Tyana Blackledge - Something to think about, the 203k program. Ask your mortgage person about it. Basically you can put down 3% on a house, rehab it with licensed contractors up to 35k, using federal money, and you can sell it in a year. You can do this as long as the 203k program exists. Its a great solution if the government is giving money away.
Yes you will have to pay more in capital gains, selling after 1 year, but you can buy and sell 2 homes in that 2 year period instead of 1. Couple this with the 1031 exchange program and you have a nifty solution to hide your capital gains.