New to Real Estate · Member since 2025 · 2 posts · 3 votes
Hello BP members,
My name is Rachel Redman, I'm a single mom of two (17,18) and have been working as a Registered Nurse for 14 1/2 years! Long hours and changes in healthcare has left me burnt out and ready for something different. I will be graduating next month with my MBA in General Management! Although this is not necessary for REI, I think that I can use some of what I've learned toward this adventure because I always come back to real estate when I think of what's next. I spend my mornings and trips back and forth from work listening to BP podcasts as well a reading lots of books to learn as much as I can. I have connected with a couple realtors, one of which has connections to contractors. My next step will be to talk with lenders and a CPA. At what point to do you recommend that I get an LLC? Should I have this to put my first investment under, or should I gain the experience with my first few flips? I plan to start with local flips first to gain capital and then move on to rentals and multi-family investments to create passive income. Is it better to wait until the beginning of the year to purchase rather than right now? I look forward to connecting with you all and learning as much as I can! I'm hoping to use business credit rather than my savings to make my first purchase to keep my savings as backup, but any advice would be appreciated! Thanks in advance!
hello. i don't mean the following to come off as discouraging, but getting started in flipping is going to be tough, as you're going up against professional flippers and businesses in your area that do nothing but flip. they typically get access to the best inventory, the best contractors, etc.
the hardest part is going to be sourcing the right kind of property that is distressed enough but not too distressed. and, contrary to the hype, flipping takes capital - no one is going to loan you 100% of purchase, rehab, closing costs, holding costs, etc.
are you able to devote some time to networking, getting access to inventory, going to visit properties in person, calling lenders, and calling contractors and trying to get a sense of their availability?
I would recommend reaching out to a cpa once you close on your property or have the property under contract.
As for time to buy, whatever is the best deal.
You could get an LLC at the beginning and that’s generally best for flips. You don’t want to have personal liability if at all possible.
Rachel, you're close—keep it simple and momentum‑first. For flips, many hard money lenders want an LLC, but for your first purchase it's often easier to close in your name to access better terms, then revisit entity structuring once you've got several deals and a portfolio worth protecting; pair that with strong insurance and clean operations now . Timing wise, don’t wait for January—buy when the numbers work and your team is ready. Talk to two lenders and a CPA this week, confirm funding options and tax implications, and set your flip buy box with your agent and contractor. If you use business credit, treat it as short‑term bridge only, track it separately, and have a clear exit to cheaper capital.
hello. i don't mean the following to come off as discouraging, but getting started in flipping is going to be tough, as you're going up against professional flippers and businesses in your area that do nothing but flip. they typically get access to the best inventory, the best contractors, etc.
the hardest part is going to be sourcing the right kind of property that is distressed enough but not too distressed. and, contrary to the hype, flipping takes capital - no one is going to loan you 100% of purchase, rehab, closing costs, holding costs, etc.
are you able to devote some time to networking, getting access to inventory, going to visit properties in person, calling lenders, and calling contractors and trying to get a sense of their availability?
hello. i don't mean the following to come off as discouraging, but getting started in flipping is going to be tough, as you're going up against professional flippers and businesses in your area that do nothing but flip. they typically get access to the best inventory, the best contractors, etc.
the hardest part is going to be sourcing the right kind of property that is distressed enough but not too distressed. and, contrary to the hype, flipping takes capital - no one is going to loan you 100% of purchase, rehab, closing costs, holding costs, etc.
are you able to devote some time to networking, getting access to inventory, going to visit properties in person, calling lenders, and calling contractors and trying to get a sense of their availability?
hope this helps
I appreciate your honesty. I definitely don't expect this to be easy, and I know that there is a lot of competition out there. I'm hoping to find some local flippers to learn from. I have 4 days off each week, so this gives me time to analyze deals with my realtor/lender and networking. I'm not in a huge rush, but hoping to get started soon. I just know that I have to start somewhere. Do you suggest starting with rentals instead?
You either need to be really lucky or really good to be a profitable flipper. I would really rethink that as a starting strategy. I too when I first came into this industry I thought, well you just do like 10 flips to generate cash and then off you go holding/flipping until your little heart can't take it. And maybe that is someone's story. It is possible someone started with flip 1 and never looked back and scaled up. I'm not saying it can't or won't happen. And actually you being a single mom, a nurse, and a student if anyone can do it it probably be you.
But I watched very closely about 3 - 4 million worth of flip projects. Entries 90k - 300k. Maybe 20 - 30 transactions. I saw one go flawless. Literally 90 days total entry to exit and investor made like 40k. I saw a handful where the investor was able to exit for even or small profit and I saw then about 20 losers that ranged from the investor losing it all or some portion. How do you say? Largely cause of the contracting component. Can't meet deadlines. Can't perform to quality. Cuts corners on all processes. If you're in a deal where the contractor under bid to win the job and now is asking for money from you to finish, in the meantime your loan is going and going and eating into your profit and then your house will compete with other finished products on the market. It can be VERY challenging to sell a finished flip house if it's not priced right or the market is cold. Most of the flip deals I witnessed involved price reductions and lasted 9 months - 18 months. Can you imagine being in a deal for 18 months? I've seen it.
Like I said, it can work. The risk is getting the work done well enough and to code so when the buyers building inspector walks it, there isn't a list of 50 things to still do. Been there too. For instance, more than two steps requires a railing in most counties. Yet your contractor will just ignore it and not even put it in budget and it will come up later.
When I weigh the risk and rewards of flipping right now, it's not even close. Way riskier than I'd want it to be. Even the lenders know too. Two giant wholesale lenders I use both tightened up their budget reviews. No where just submitting whatever budget. It better be detailed and accurate or else no go. The default rate has spiked up which means they were handing out the money a little too easily. So we're in buckle up mode right now.
Flipping means you're taking on debt with a timer. Adding time to a task makes it exponentially difficult and if you or anyone gets in over the head you will lose the property, lose your borrowing power, and lose your money. Those books and podcasts can be very misleading. Larry Bird will tell you to lift the ball to the side of your head, focus on the rim, and follow through....but go do it. These books/podcasts glorify flipping? I challenge someone to go get in their first and then come back and report and see if it goes exactly how you expected.
Flipping is all about the margin of error you build in for the exit. If you buy on market and your project is 3rd party managed and you have a loan, good luck to you. That's the exact scenario I see fail over and over.
If you wanna flip with cushion you can't buy on market or through the high priced wholesale outfits. You gotta be into the project for 50/60 cents on the dollar. This way your first step is a giant leap forward. What someone buys for 100k on market, you can get the same kind of asset for 50k. Where they have a 3rd party managed project with an 80k rehab. You can self manage and sub out for 65k. So the same house, one is in for 180k and one is in for 115k. One will have to see for top of the market prices to see their return. The other will have to sell mid market to see same or better return.
The people I know who do it to scale buy this way most of the time.
I've pivoted my strategies. I thought I'd be flipping too, but I saw like 500k in wealth evaporate in the flip game across 10 - 15 clients. So not for me, not now.
Currently I'm micro purchasing cash deals at auction and liquidating as-is on market. 3 - 4 month deals as opposed to 12 - 18 months. ROI has been better too. I do this for myself and I have a consulting biz where I do it for others. Blended ROI right now is 30% - 50% per deal and well over 100% APR.
This is much less risk. No loans, minimal holding costs. Fast exits. Selling opportunity to investors who are looking for cash BRRRR deals. No rehabs, no contractors. No lenders. Just the pure age old adage buy low, sell high. In six months we purchased 196k (5 houses) they are starting to close now and should all be closed by January. Conservatively we will liquidate for 300k. So 104k profit in 6 months. Not in one deal, but in 5. Add volume, take away the 3rd party risk and the debt, lower the entry points, get liquid enough to move in and out of these advantageous positions at a venue where the discounts are there, you just need the knowledge on where.
Whatever you do, don't be afraid to go slow. Losing money in this arena is a real possibility, especially if you try to make short term gains. Long term gains in RE are easy, you just need to wait. That's why someone with deep pockets can overpay cause they're not flipping they're gonna hold this house for 15 - 20 years and their buy price at that point is neither here no there. But when you are trying to flip, you are stepping in and out of the of a market in 6 - 9 months. That's risky as hell. A flipper can lose their entire stake in the same deal that a BRRRRR investor makes a killing on.
The spot markets in any investment instrument are the RISKIEST. You think the world is gonna let you swoop in and swoop out and take chunks of money with you each time? Boy, if it was that easy. Who'd work?
if you start with rentals, one important thing to do is to reset your expectations. a lot of new investors seem to be overly optimistic about the first few years of ownership. you should basically expect to be spending money and putting cash in for the first few years.
it takes money to buy (closing costs); it takes money to lease out (usually the first month's rent to the agent or PM, plus potentially fees on top of that); and it takes money to get rent ready (things that won't be found until someone is living there.) then, your dishwasher or furnace will break even though it's brand new and isn't supposed to. it all adds up. and then maybe in year 6 or year 12 you actually generate some meaningful cash flow. not in year 1.
now, there are other benefits to real estate - potential tax savings, mortgage paydown, maybe some appreciation. but many new investors don't seem ready or willing to wait through the tough first few years to let the benefits accrue.
i hope this helps. happy to answer any other questions you have
Welcome Rachel — huge congrats on almost finishing your MBA while juggling nursing and two teens. For your first flip, most new investors buy in their personal name and form an LLC later once they know their process and financing options. Lenders often prefer that early on anyway.
There’s no perfect “time of year” to buy — good deals show up whenever the numbers make sense. Since you’re starting with flips, focus on solid comps, a reliable contractor, and a lender who understands rehab loans. You’re doing all the right prep, and you’re closer to your first deal than you think.
@Rachel Redman, welcome and congrats on almost completing your MBA! You’re asking all the right questions at the perfect time! Real estate offers a lot of opportunities, whether you’re flipping or holding, but it really depends on the areas you focus on and how involved you want to be. You’re spot on that your first step should be connecting with a lender, the key is finding someone who understands investors, offers creative financing, and can guide you through your first deals.
From a tax perspective, it's important to understand the benefits from day one and how they fit into your overall financial picture. Most new investors don't need an LLC before their first flip. Flips are taxed as active income, so you’re usually better off starting under your personal name or a simple LLC taxed as a sole prop, then forming an S Corp once you get consistent deal flow and profits. That structure helps reduce self-employment taxes on flips.
For rentals and future multifamily, an LLC does make sense for liability protection, cleaner bookkeeping, and long-term tax planning, but you can set that up when you get closer to holding properties rather than flipping.
As for timing, there’s no tax disadvantage to buying now versus January. What matters more is finding the right deal. You still get deductions for interest, rehab costs, and mileage regardless of when you close. These are all just the tip of the iceberg, though. Just focus on finding a good deal and getting a good team behind you like a lender, real estate agent, CPA, etc. You're off to a good start by doing all the research.
hey Rachel to flip or buy and hold depends on how much time and money you have available. Buying and holding over time will make you significantly more income. Flipping is a job that provides income. If you are looking to replace your 9-5 and get into real estate full time, flip away! Nothing wrong wtih that its how I got my start in 2008.
If you are looking to build your net worth, and replace your income one day, buying and holding is the better route generally speaking.
Hey Rachel, welcome and congrats on wrapping up your MBA, that’s a huge accomplishment, especially while raising two teens and working full-time. Your drive and clarity are impressive.
For your LLC, it's totally fine to set it up before your first flip, especially if you're serious about building a long-term business and want separation from personal finances. Just make sure it's active before going under contract, or you'll have to assign the deal later.
As for timing your first purchase, don’t wait for a calendar date, wait for the right deal. If it pencils out, go for it, regardless of the season. And using business credit can be a smart move to protect your reserves, just watch those terms closely.
