I have $30,000 saved, live in Charlotte, N.C., and have a fairly long history in Carpentry/Construction. I have every tool imaginable and could manage a flip fairly easily. My wife is currently working towards getting her real estate license, and should begin testing within a few more weeks. I want to make the right moves with my money. Any advice?
@Stephen Bennett , first off don't count on your wife adding value as a real estate agent yet. It takes at least a couple years to have a real clue. Its great that she is starting, but just keep in mind she isn't an expert nor will she be any time soon.
Its great to have skills at something like construction. Definitely something you can leverage. Keep in mind all the areas you need expertise in to make a deal work start to finish. Make sure you find people to fill those roles. Those roles are JUST as important as the actual rehab work. It is human nature for people to think the aspects they like or have expertise at are the most important. An accountant thinks money, analysis, spreadsheets are most important etc.
I would find a seasoned investor locally who might want to partner on some deals with you.
As for BRRRR versus flip. Flipping is a job, you are making and selling a product and you are taxed like that. BRRRR is more investing because you hold the properties and manage them. You pay much less taxes, BUT you need to be serious, professional, and strategic about managing those rentals. If you aren't going to manage them well, it is no good either.
One more tid bit. Get help developing your scope of work. I see a lot of people who have trouble figuring out what kind of rehab makes sense. That is VERY VERY different than doing the actual work and it is probably one of the areas investors struggle with most.
Awesome advice! She is actually getting her license so to ha e access to MLS and to save the money when purchasing and selling the property. I really like the idea of linking up with a seasoned investor, but I'm not sure how to go about that. Would REI meet up be the place to find someone?
@Stephen Bennett - if you haven't yet, I'd read Rich Dad Poor Dad. I would BRRRR. I want passive residual income. Now, that said, if you need money to live off of, then you may need to flip. If you plan to build a business and want that business to be a flipping business, then that is a valid strategy, but if you just want to flip a property here and there, I would keep whatever you can afford to. In 20 years you'll be glad you did.
Basically the idea is to fix and flip as our profession and aquire rentals along the way and when it makes sense. My dream for a long time has been flipping, so that will be my primary goal.
Oh! And I actually have Rich Dad Poor Dad in my audible library, I'll have to start listening to that one next!
Tarl Yarber has some great thoughts on this. He was a very successful flipper in the Seattle market but recently he started holding as many BRRRR's as made sense. The good news is flipping and BRRRR are somewhat complementary skills. The flipping will exercise your estimating rehab costs muscle, as well as your deal finding muscle. I wouldn't say you could rehab every property and then decide whether to flip or BRRRR after the fact as a general rule, but it's definitely an extra strategy you could employ.
Keep in mind, before you try a BRRRR, you'll want to have an open conversation with whomever you plan to use as the refinance lender about what you are planning to do.
@Stephen Bennett , yes having MLS and lockbox access is very convenient.
As for saving money, again experience. It will take time. Identifying deals and negotiating them takes experience. I hope she intends to actively work as an agent to get that experience.
As for finding other investors. I would start here on BP. Under "Network" at the top of your screen there is a Search|Members feature that allows you to filter by location. Find some investors who are local and introduce yourself.
I have met a number of people through Bigger Pockets. I've had new investors reach out for advice and had them come visit my rehab projects and talk. I've had out of area investors call and talk at length. I've had folks want my assistance as an agent.
Also, look for local REI meet ups. There may be meetups advertised here or maybe through a facebook group.
Yes she will be an active agent. That's great advice. I didn't know there was a network category on BP. Thank you very much, your advice is greatly greatly appreciated.
So I found Tarl on YouTube and watch a few videos last night. Wow what great information! Thank you for that!