Flipping for Newbies
Hi guys! I'm fairly new to all of this. Basically I'm a real estate agent thats found herself an opportunity to partner up with cash lenders and get into flipping. The guys I'm working with own a successful software firm and are looking for a side hustle. Here's where I come in. They have the capital, and I'd be acting as the representative/ going out and finding deals. I am by no means a contractor, and I have no idea how to determine what rehabbing costs would be (ie. renovating a kitchen, refinishing floors, etc). At least not to the specific extent my partners would be looking for. My first thought was to bring in a contractor that would be willing to check out the house and give me an idea of what the work would cost. All of the people I know that flip houses are either contractors themselves, or are capable of doing most, if not all, of the work. Anyone have experience with this? Or possibly some advice as to how to go about it?
@Stephanie Oss You are on the right track. Use your network to find a reliable contractor (or three) and use them to estimate repairs on potential deals.
#2 Starting Out Contributor
- Specialist
- Mendham, NJ
I'm sorry to say this all sounds bad. You don't have any idea how to assess investment properties, but you want to partner with two people who are giving you their money to assess investment properties for the potential profit. Sure, contractors can help, but they have a distinct stake in the game and are not experts in evaluating the investment. They can give you an idea on repairs, but you can't be the point person, with a fiduciary duty to your money people, if you don't know the metrics. You are setting yourself up for a mismanaged partnership.
What's your plan to find properties? If it's on-market only and you lack the requisite experience, what are you really bringing to the table for them in this deal?
Jonathan, I personally own one multifamily investment property, so I'm not entirely new to the process. I have a good understanding of the market in my area, and I would buy my way into the partnership using my commission from the purchase. We're looking at both on and off market deals. I'd be bringing them the properties and doing all of the legwork. They'd be providing a down payment. I guess my question is, is it common for people that don't know how to do the physical labor associated with flipping a house to get into it?