Seed Capital for First Flip

18 Replies

Hi Guys, first forum post here! I am really keen for my first flip, but am not sure exactly where to start. What states hold the best real estate market / sources of seed capital for first time Real Estate investors. Is there one particular state where finding seed capital and a viable buy is just easier than in other states? 

Just to clarify: regarding the United States, just posting from Fiji!

@Tyrel McAllister , I have had great luck in the California market, and am making good headway on an initial investment in rural Nevada. Positive markets seem very localized, it all comes down to the research of an individual area you are interested in.

I don't think it truly matters what state you are in for seed capital. To raise seed, you just need good budgeting skills and cost management. Best of luck in raising seed capital for your business. It took me more than 8 years of solid budgeting before I now feel I am ready to make my first profitable investment. 

@Tyrel McAllister , First off, welcome to Biggerpockets, it's my first week here as well! I am really excited to be a part of the community, there is a lot to learn here! I have had great success in Florida rounding up investors for my latest Foray. Just be sure to check out all the local real estate events and association meetings in your area. Before you know it, you will be up to your ears in contacts! I hope you find the seed capital you are seeking!

You're correct it doesn't mater location.

Tell me Barbra, 

What markets are you wanting to invest in?

I might have or have access to it.

@Tyrel McAllister I have always invested in very mature markets in the past, having done much exploration. That said, I think you will find it fluctuates throughout the state, save for a few very notable places where the real estate market can be particularly difficult. I hear that Memphis is a very healthy market at the moment. You may wish to check google for the best and worst real estate markets in the continental United States. 

As an added note in terms of accruing seed capital, you may wish to look into development grants available in each state or community. These grants can assist in making your project happen, and usually don't require jumping through too many hoops. This may make the difference when deciding what area you will invest in if you are truly that low on initial starting (Seed) capital. 

@Tyrel McAllister Did you ever manage to locate a good source of seed capital? I have learned about financing real estate using interest free credit cards. It sounds risky, but so long as you sell the investment before the interest free period is over, you can make quite a profit. What have you found so far?

@Account Closed I did! Not quite everything I needed, but I did manage to secure a conventional bank loan for seed capital. Took a while, it's pretty tough when you're just a young guy with little financial history to speak of

It sure can be tough to acquire that new loan for your first flip. I am a little older, and am also having issues getting my first seed capital loan. It's nice to hear you got a loan, gives us all hope!

I think you will find good markets are very localized. They're are terrible and fantastic opportunities in every state, you just have to look.  Best of luck using that seed capital to it's best effect. 

When I renovate, I tend to acquire a small loan at the end of the project to bring the reno to completion. This way, I can boost my lending history, and the banks are keen because the project is visibly near to completion and therefore a guaranteed short term return on the investment. 

State is irrelevant. It's all down to the neighbourhood and type of your chosen investment. Every state has good and bad neighbourhoods, good and bad uses for your seed capital.

I wound up selling one of my less lucrative investments to fund y next project. I was hoping to hold onto the unit, but sometimes you just need to move on to bigger and brighter things. Sometimes that is the only way to capital raise. 

@Anna McGill That is a wizened perspective. It seems a rite of passage to fail, if only to learn success. 

@Account Closed Truer words have never been spoken. I am still struggling to gain the required seed capital to get my latest project off the ground, but hanging in there! I am currently browsing the discussion forums seeking alternative methods of raising. I am sure someone out there has made a project happen seemingly out of thin air. 

@John Krasner There are so many "on the cheap" hacks when flipping. Small repairs and upgrades that take a tiny bite out of your capital, but bring a great return. Some beginning flippers focus on big upgrades like a pool, or a new roof. Doomed to fail, those flips are!

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