buying first property

[Veronica Calvillo]

Hello! Looking to connect with like minded individuals that I can learn from and possibly do business together. I'm from Illinois and am itching to do my 1st real estate investment but not sure how a newbie like myself can finance a property without using my own money especially when it comes to paying for inspections, appraisals, earnest money, monthly interest and monthly bills, etc 

[Mike Klarman]

This industry is a double edged sword.  It is also unforgiving and it will punish those entering before they are ready.  There's paradise here, but also disaster.  I'm sure for every success story there's 100 disaster stories.

Entering with no money, no track record, no knowledge and looking to do a flip is a bit of a dream.  What are you bringing to the table if none of the above?

In a small market in the midwest, somewhere in western PA through Indiana you can get into a house for under 100k and with 75k - 90k in work that house can be worth 270k - 290k.  That opportunity is there in places like Pittsburg, Columbus, Toledo, Springfield, Dayton, Fort Wayne, Indianapolis.   But to see a project through it's entire lifecycle 6 - 9 months, you'd need to absorb 40k - 50k in costs and fronting money.  And if you do not have the proper money to see the project to the end then you'll get stuck and just be paying loan payments with the balloon payment looming over your head.

A zillion things can go wrong, financing is the least of the worries of an investor.  The real problems come in the rehab and the exit.  If the rehab isn't up to par then you can't get your exit, if the rehab is good and the market is soft you can't get your exit.  You'll have a property be sitting for 45 days and you'll start the reducing game.

Also, very few agents present real comps, wholesalers almost never do.  They show you top of the line comps only.  So it is easy to fall into a project and then once you're in the middle of it and it has gone sideways, only then realize what a mistake you made but it is too late.  There's waaaayyyyyyy more of those stories then there is of ppl coming in with no money and getting in and out of a flip with oop and making like 25k.  The ladder belongs in a Disney Fairy Tale book somewhere in between Snow White and Cinderella.