Just starting. 2 at once too much?

[Chad Dowell]

Hi, just getting started investing. LLC set up? DUNS number acquired, business checking account open and funded. Been looking for my first flip for a few months with no luck, as luck would have it though, I've found 2 foreclosures that are perfect. Question is, would it be doable to buy both if I have the funds for down payments for both? Have a contractor that can get them both done, just looking for advice.

[Seth McGathey]

Hey congrats on getting into the game. If it is your first flip, I would caution you doing two at once, especially if you only have one contractor and need to buy them at the same time. A flip is generally one of the most risky real estate investment options (but also one of the best returns, which is why it is worth it). But let's just look at worst case scenario right now. Let's say you buy both properties and both end up having way more work than you expected. Then your contractor gets in there and starts doing work, but he gets sick or injured. Now he can't help for a month. You are sitting with two properties, scrambling to find another contractor, and need to offload them before the holding costs eat up all your profits that the expanded workload didn't already eat up. Then you are out of the game for a few years while you try to build back enough savings to invest. 

On the other hand, it could all go smoothly and you could make a years worth of income off doing this. Which would be awesome. 

So it really comes down to the level of risk you are comfortable with. But either way, I would make sure you know several contractors, just in case. I would also make sure you have a sizable amount of reserves in case of problems. Maybe 6 months holding costs more than what you expected the project to take. Plus some for any additional repairs beyond what you expect. If you look both properties over and have enough to cover both through that storm, then feel free to risk it. But at the same time, why rush the second? If you are in this for the long haul, you are going to find a lot more details over time. Don't let FOMO alone trick you into overextending. There will always be another deal if you just keep looking. 

Best of luck!