Seasoned Investor Opinion Wanted

4 Replies

I live in the Beaumont, TX area and real estate is on the less expensive end of the spectrum. I'm fairly new (completed 1 flip many years ago). I have $100k to invest in real estate. My intent is to just do flips. Should I use the $100k to do my own deals without borrowing any money at all, or should I look for hard money for acquisitions costs and use the $100k to complete repairs and possibly be able to do 2, possibly 3 deals at a time? If you think I should do something altogether different? I'm interested in your feedback. Thank you in advance.
Sam Byrd use the power of leverage. Use other people's money to buy properties as well as your own, but don't over leverage yourself! I use my money but I also use the banks money when I can. It allows you to do more deals. Why would you not use hard money or private money if you could do more deals and thus make more money. It's that simple.

From similar experience, I pushed the envelope and used my money with hard money as a newbie, which has not worked out very well.  When you use hard money, there is no room for error, mistakes, delays, market hickups, etc.  My last flip I got caught holding a property for 6 months with $2K per month interest only payments going to the hard money at 15%.  The market in my area just stopped and I could not find a retail buyer after the flip and the bank would not refinance for 6 months to get a loan to pay off the hard money and turn it into a rental.  My advise is to start slow using your own money as it is much more forgiving as a beginner.  Once you are more comfortable flipping and have a good team in place (i.e. contractors, realtors, lawyers, etc.) and your speed and predictability improves, then I would start using leverage to scale up your business.

price the hard money into your analysis. Leverage will improve your cash-on-cash return. Would recommend starting by JVing with an experienced and reputable flipper fhat will show you the ropes and get you 20% return on your half of the JV.

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