Flip or Rental for first time investor?

Question

After years of "I'd like to eventually do that" and window shopping YouTube videos of peoples success with REI I have reached a point where I think I'm ready.

My wife and I have relocated out of state to Orlando for her job. I left behind my 6 figure income job (which I was incredibly unhappy with) so she may pursue her dream, and hopefully I can pursue mine. While I was going about the dreaded job hunt here in Florida, I couldn't help but wonder if this is the time and place for me to dive into investing and begin the foundation to financial freedom and to break away from the 9-5.

I love the idea of BRRRR, and would love that to be a long term solution for me, but I understand that for the time being perhaps flipping would be a better entry point for me to start gaining income.

I have roughly 30-40k in pocket to get started, but I'm concerned about finding lenders to approve me due to me currently being unemployed. Credit is fine.

For you experts and gurus, I'd love some recommendations on how to go about getting financed, and making this a "full time" gig. Suggestions? Is flipping the right move to make to get started in 90-180 days? OR do I look the route of multifamily.

Where did you guys start?

Tyler Gibson · Answer

If you don't have experience my suggestion would be to start networking locally and see if there is someone experienced you might be able to partner on a flip with. It sounds like you have some cash and time which are both valuable things for real estate investors. This would allow you to break into the market with someone that has experience they may be able to introduce you to their hard money lender and then you can be off to the races on your own. I'm local here in Orlando would be happy to connect you with some other locals.

Matthew Crivelli · Answer

@Dominic Taylor

Find a good add value situation and flip it. If you have 40k in total reserves and decent credit you can expect to have enough cash to be able to close on a $150,000 home with an added rehab budget.

Usually a short term interest only rehab loan with no prepayment penalty.

Once it's complete sell it and repeat the process.

Start with one, plan well, and see how it goes!

Shawn McCormick · Answer

@Dominic Taylor congrats on posting and welcome to Orlando. There are a ton of meet up groups and we have an excellent REIA here to help further your local knowledge and network with people actually doing deals. Hard money is one route if you don't think you could get financed, but there is an incredible amount of private money out there too. If the deal makes sense, the money will come, but you make your money when you buy.

The market here is very competitive for a number of reasons, so you have to be prepared for that. With property values rising in double digits every year here, the longer you wait the more you will pay, but our economy, jobs and reputation are all growing so the future is still bright for us here. Let me know if you need pointed in the direction of good areas and good people to help get started. Good luck!

Bruce Woodruff · Answer

I wouldn't get involved in the flip market unless you have at least moderate construction experience....you will be paying a big price to a Contractor to do the work, and then 'poof' there go your profits....

If you want to flip, you should have extra money laying around....IMO

Michael Dumler · Answer

@Dominic Taylor agree with @Tyler Gibson You need to first study the market and determine if flipping is even a feasible investment strategy. What may work in one market, may not necessarily alter to another. Network and connect with different meet-ups, see what strategies have worked for some and not others. Most importantly, as I'm sure a majority of experienced investors would advise, you need to get crystal clear on your goals and criteria. Make a plan of action and stick with it. Best of luck!

Flip or Rental for first time investor?

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