Looking for guidance for 1st few steps. Here's what I have and where's where I'm stuck. I know I want to purchase a single family home 3-1.5+ with 2 car-garage in a middle class, or upcoming, community. Preferably, it would be a home that needs renovations that would give me a higher ARV. The BRRRR strategy is what I'm looking for without about $20K in capital on hand. My main concern is that I having a home in a unlivable condition while it racks up costs because I'm vetting contractors. I also don't want to have a contractor who doesn't have the skillset I need to get my house up and running as fast as possible. What are your thoughts??
1. Get Pre-qualified
2. Line up finance companies
3. Line up realtors
4. Line up contractors or start looking for houses???(What's your recommendation and why?)
Hey Curtis I'd guess you have significant risk of effectively evaluating a contractor and building the trust and effective relationship to get through a project together.
With that in mind, I'd prepare to buy something where you can get hands on with any needed value add / repairs. This will give you leverage in the future and the knowledge you need to effectively interview and manage a relationship with a good contractor, if your goal is to get RE going while using your earning potential in IT simultaneously.
What I'd be looking for, is a house that you can finance - but that has good value add projects (often these are houses that are solid, but just need aesthetic updating). By going this route, you can reduce risk of not knowing what you don't know with regards to that contractor relationship. You might even be able to find something that is nearly 'rent-able' right out of the gate.
In looking for this type of house, I'd be actively identifying low risk 'other' value add projects that you can take on and actively manage, even doing so on weekends/nights, etc. A 'type' of project that might fit for something like this would be for instance adding an en suite bathroom next to a bedroom. Sometimes small projects like this can be the biggest bang for you buck, and biggest bang for increasing your experience level rapidly!
I think if you don't have experience being hands on with a project like this - you don't really have a good chance of managing a project and a contractor relationship effectively - in the future. I hope this is helpful and good luck!