Some questions on starting house flipping

New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote

Hi,
My name is Shalom Wininger. I am new to real estate and am trying to start off by doing fix and flips. I did research into it and am very familiar with it and how it works. I just have no experience at all. I am living in New Jersey and am looking into real estate here as well. I had a few questions that perhaps someone can advise me on. 1) I was told to get a real estate agent to help, I have been trying to get an agent to help me, but most of them never get back to me and the ones that do, and I tell them what I am interested in doing, they never follow up with me and it is hard to keep chasing them, any advice as to what I should do about this? 2) I would try to do deals myself but I don't know how to do that, I have no contracts and I have no clue how to make and write an offer to even start anything off, the only way I can think of making any offers is with an agent, but that will cost the seller an agent fee and will minimize my chances of getting any deals, what should I do about this? 3) Is it best to try to get a partner, someone who is already experienced? I have tried that as well but no one is really interested, how do I go about this? 4) Even the distressed houses are only offering to be sold for a max $100,000 lower then regular asking price, which can't turn any profit, is it due to the market today? Is it even worth it to try to do flipping in todays market? Any help and advice is greatly appreciated, thanks to all.

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Randall AlanPro Member

Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes

@Shalom Wininger

We own 37 rentals and have flipped 6 houses in the last 5 years. The one MUST in flipping houses a a REALLY good margin between your buy price and your ARV. Our "line in the sand" is that we have to expect to NET $50,000 for it to be worth our time. That's a personal number, and many may have a lower one... But when you factor in things like:

1. You have to close twice... once to buy it, and once to sell it. (and sometimes your seller will want to do a double close... so that's actually 3 times!). That translates to 2 - 6% of the price EACH TIME you close between realtor fees, transfer costs, and other closing costs). So on $100,000 house that will sell for $200,000 you are probably talking at least $15,000 in transaction fees before you start to talk about fixing the house.

2. You are a beginner... and you are going to miss things. Maybe it's termites, maybe it's a foundation issue, maybe it's the engineering costs you didn't factor in because you thought you didn't need to do engineering to 'just replace the windows'... but once you are in the middle of the flip, you have no choice but to finish it. 5 of our 6 flips went off without a hitch. The last one (a 1925 house we completely renovated) we ran about $50,000 over budget because the windows had to be brought up to 2022 code, which required metal straps to be installed in various places on the window framing, and all the framing rules have changed since 1925! 1925 houses have A TON of windows... ours had about 25 of them.. the worst part was that we had already almost completed the interior remodel... so now the framer had to try and not destroy the work that was already done inside. Cost us over $1,000 a window (not including the cost of the window itself... Big OOPS!). But we had a $100,000 expected profit... so we still made out fine... but if you went in thinking that it would be a $20,000 repair job, and suddenly it's a $60,000 repair job... you could be really screwed.

3. You always find more stuff you didn't think about once you dig into things. It just happens! Some of that large margin is "cushion" for missing things, or the unexpected... just like our $50,000 cost overrun. With big numbers come pretty big risks. The rewards are awesome... but don't neglect the inherent risk of what you are thinking about taking on.

So being a beginner, realtors may not think you are a serious player. If you don't have the money, the knowledge, the experience... can you blame them? (not accusing you of any of those things necessarily). The challenge with Flips is not only do you need to buy the property, you need the money to put the house back together. ANY lender is going to expect you to have your own money in on a deal. Hard money, or traditional lender, expect them to want you to have at least 20% of your own money in. Is it a rule? No... but no one wants to be left holding the bag if you suddenly become a ghost and all they have is a gutted shell of a building that now THEY have to deal with. And DSCR loans aren't going to work on a flip because they aren't cash flowing when you buy them.

My best advice is to get connected to someone doing what you want to do in your local area. Check out the local real estate investment clubs in your town. Just by surrounding yourself with people doing what you want to do, you will start to learn the ropes and develop some of that street credibility to be taken seriously down the road. Volunteer to come swing a hammer or whatever on one of their flips. It's sweat equity to earn your education. If you connect in a great way, maybe you partner with your new people and you split the profit on a deal... suddenly you now have some money to work with and you will inch your way towards doing your own deal down the line. You can't.. or maybe better said 'shouldn't' try to fly before you crawl and walk. Flips can eat you alive if you don't know what you are doing. Ask yourself this: If you even did get your hands on a flip, who is going to fix it up? You? Do you know how to replace doors, flooring, install cabinets, replace a window, etc, etc? After 5 years of doing it, I have learned quite a bit from the contractors / handymen that have helped us restore our houses... but I don't know if I could do it on my own even still.... but I can do a lot more than I could starting out.

As for timing... yes, it's a HORRIBLE time to be trying to do much of anything in real estate right now (that's said comparing it to 2-5 years ago). Can it still be done... SURE... but housing has shot way up, and the cost of borrowing money has pretty much doubled in the past 18 months... so I can't recommend that it's a good time. Like you said, the numbers just seldom work right now. Real estate is cyclical, so it will eventually settle down (my guess is when the fed backs off raising rates and the mortgage rates get back into the 5's... which I have heard some supposed experts suggest could be by the end of the year. Until then, we are always looking, but aren't going to go jumping into something where we would be at risk of being successful by trying to have a margin of $30,000 with $10,000 in repairs, and $12,000 in closing costs. It's just not worth it.

So I give you an "A" for ambition... but figure out your path.. and unless you have a lot of money to back you up, plan on taking the 'slow road' to getting into flipping... partner with someone up front and learn the ropes!

All the best!

Randy

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Randall AlanPro Member
Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
3y
@Shalom Wininger

We own 37 rentals and have flipped 6 houses in the last 5 years. The one MUST in flipping houses a a REALLY good margin between your buy price and your ARV. Our "line in the sand" is that we have to expect to NET $50,000 for it to be worth our time. That's a personal number, and many may have a lower one... But when you factor in things like:

1. You have to close twice... once to buy it, and once to sell it. (and sometimes your seller will want to do a double close... so that's actually 3 times!). That translates to 2 - 6% of the price EACH TIME you close between realtor fees, transfer costs, and other closing costs). So on $100,000 house that will sell for $200,000 you are probably talking at least $15,000 in transaction fees before you start to talk about fixing the house.

2. You are a beginner... and you are going to miss things. Maybe it's termites, maybe it's a foundation issue, maybe it's the engineering costs you didn't factor in because you thought you didn't need to do engineering to 'just replace the windows'... but once you are in the middle of the flip, you have no choice but to finish it. 5 of our 6 flips went off without a hitch. The last one (a 1925 house we completely renovated) we ran about $50,000 over budget because the windows had to be brought up to 2022 code, which required metal straps to be installed in various places on the window framing, and all the framing rules have changed since 1925! 1925 houses have A TON of windows... ours had about 25 of them.. the worst part was that we had already almost completed the interior remodel... so now the framer had to try and not destroy the work that was already done inside. Cost us over $1,000 a window (not including the cost of the window itself... Big OOPS!). But we had a $100,000 expected profit... so we still made out fine... but if you went in thinking that it would be a $20,000 repair job, and suddenly it's a $60,000 repair job... you could be really screwed.

3. You always find more stuff you didn't think about once you dig into things. It just happens! Some of that large margin is "cushion" for missing things, or the unexpected... just like our $50,000 cost overrun. With big numbers come pretty big risks. The rewards are awesome... but don't neglect the inherent risk of what you are thinking about taking on.

So being a beginner, realtors may not think you are a serious player. If you don't have the money, the knowledge, the experience... can you blame them? (not accusing you of any of those things necessarily). The challenge with Flips is not only do you need to buy the property, you need the money to put the house back together. ANY lender is going to expect you to have your own money in on a deal. Hard money, or traditional lender, expect them to want you to have at least 20% of your own money in. Is it a rule? No... but no one wants to be left holding the bag if you suddenly become a ghost and all they have is a gutted shell of a building that now THEY have to deal with. And DSCR loans aren't going to work on a flip because they aren't cash flowing when you buy them.

My best advice is to get connected to someone doing what you want to do in your local area. Check out the local real estate investment clubs in your town. Just by surrounding yourself with people doing what you want to do, you will start to learn the ropes and develop some of that street credibility to be taken seriously down the road. Volunteer to come swing a hammer or whatever on one of their flips. It's sweat equity to earn your education. If you connect in a great way, maybe you partner with your new people and you split the profit on a deal... suddenly you now have some money to work with and you will inch your way towards doing your own deal down the line. You can't.. or maybe better said 'shouldn't' try to fly before you crawl and walk. Flips can eat you alive if you don't know what you are doing. Ask yourself this: If you even did get your hands on a flip, who is going to fix it up? You? Do you know how to replace doors, flooring, install cabinets, replace a window, etc, etc? After 5 years of doing it, I have learned quite a bit from the contractors / handymen that have helped us restore our houses... but I don't know if I could do it on my own even still.... but I can do a lot more than I could starting out.

As for timing... yes, it's a HORRIBLE time to be trying to do much of anything in real estate right now (that's said comparing it to 2-5 years ago). Can it still be done... SURE... but housing has shot way up, and the cost of borrowing money has pretty much doubled in the past 18 months... so I can't recommend that it's a good time. Like you said, the numbers just seldom work right now. Real estate is cyclical, so it will eventually settle down (my guess is when the fed backs off raising rates and the mortgage rates get back into the 5's... which I have heard some supposed experts suggest could be by the end of the year. Until then, we are always looking, but aren't going to go jumping into something where we would be at risk of being successful by trying to have a margin of $30,000 with $10,000 in repairs, and $12,000 in closing costs. It's just not worth it.

So I give you an "A" for ambition... but figure out your path.. and unless you have a lot of money to back you up, plan on taking the 'slow road' to getting into flipping... partner with someone up front and learn the ropes!

All the best!

Randy
6 Reply
Shalom Wininger
OP
New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote
3y
Thanks Randy for your great input. I am missing something, why if I am the buyer do I have to pay agent fees, I was under the impression that the seller is the one who usually pays the agent fees, in that case I would only be paying once? Yes, I know about the actual rehabbing, I planned on hiring out a GC and not actually doing it myself. I was also planning on getting inspections before hand to give as much info before I dig in, which then I would add on to my calculation about 20% in costs for all those unexpected costs. Also, my margins I was hoping to be 10%-15% profit, I wouldn't do less then that. If I was to find a good deal, would you think that an experienced flipper want to partner, obviously if there is good profit for the both of us? Is it worth it for me to try to find such a deal first and then reach out to a partner, as I would be doing all the hard work of finding a deal and then just bringing it to him? What do you think?
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Randall AlanPro Member
Investor · Lakeland, FL · Member since 2017 · 1k+ posts · 1k+ votes
3y
Quote from @Shalom Wininger:

Thanks Randy for your great input. I am missing something, why if I am the buyer do I have to pay agent fees, I was under the impression that the seller is the one who usually pays the agent fees, in that case I would only be paying once? Yes, I know about the actual rehabbing, I planned on hiring out a GC and not actually doing it myself. I was also planning on getting inspections before hand to give as much info before I dig in, which then I would add on to my calculation about 20% in costs for all those unexpected costs. Also, my margins I was hoping to be 10%-15% profit, I wouldn't do less than that. If I was to find a good deal, would you think that an experienced flipper want to partner, obviously if there is good profit for the both of us? Is it worth it for me to try to find such a deal first and then reach out to a partner, as I would be doing all the hard work of finding a deal and then just bringing it to him? What do you think?

@Shalom Wininger

If buying from a wholesaler it is frequent that the terms of their sale is that the buyer pays all fees (both sides). If you will be financing your purchase you will still have lots of expenses… appraisal, processing fees, lender’s insurance policy, etc.

When you go to sell the property you will be paying the commissions for the buyer’s agent as well as your sellers agent if you use one.

You need to find that flipper first before you would go looking for a deal to partner on and earn their trust / friendship and show them your work ethic… maybe assisting them in their project. THEN discuss possibly partnering with them. It's somewhat about what each person is bringing to the table. If they are bringing all the money and also doing work on the flip I wouldn't expect a 50/50 split on that type of deal. You would need to negotiate that spilt before you ever started that project… and put it in writing… probably setting up a separate LLC where you each own a part of the LLC. If they are putting in all the money I would expect them to want to have the decision making authority on how that money is spent
Randy
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Aaron SchraderBusiness Member
Real Estate Agent · SD · Member since 2020 · 137 posts · 65 votes
3y
I wanted to see if I can add any value to your questions posed and the answers, so here's my thoughts: 1) I was told to get a real estate agent to help, I have been trying to get an agent to help me, but most of them never get back to me and the ones that do, and I tell them what I am interested in doing, they never follow up with me and it is hard to keep chasing them, any advice as to what I should do about this? as an agent, I'd want to know that you have actual money backing you up, so when we go and look at properties we aren't just doing a housing tour. I have no problem showing the properties if I know you have money backing the deal, but walking through properties costs money and time for the agent. So- can you get a proof of funds letter ready to demonstrate your ability to move on a flip property? Be very clear on your vision and direction, and maybe even have a few properties you're looking at and bring those to the table with your funds letter. If I received a call along the lines of "Hi, I'm interested in house flipping and I need an agent to help me on the buy side and the sell side, I have funds secured and I have these properties identified as ones I'd like to look at. I need to know that you can help me analyze an accurate ARV..." Then I know you've got some things together on your end. As far as calls not being returned, keep calling till you get one that picks up or calls you back. There's a lot of flaky ones so don't be discouraged, just know you are sifting. Every single aspect of the real estate business involves persistence! Consistent effort over time.
2) I would try to do deals myself but I don't know how to do that, I have no contracts and I have no clue how to make and write an offer to even start anything off, the only way I can think of making any offers is with an agent, but that will cost the seller an agent fee and will minimize my chances of getting any deals, what should I do about this? If the seller has an agent already, they know they are paying the agent and it shouldn't really minimize your deal chances. If the seller agreed to pay an agent 6%, and you come in with no agent, that seller agent is not necessarily saving the seller money by you not having an agent. As per my answer to number one, sift, find an agent willing to buckle up with you. If you are shopping for off market deals with no seller agent involved then yes, that could be a consideration for a seller not wanting to pay buyer agent fees. In which case you should evaluate if your agent is spending time with you and bringing value, then you might consider paying your agent if the seller won't, and perhaps you can settle on a flat fee on the buy side and hand them the listing on the sell side. Just trying to kick some ideas out there.

3) Is it best to try to get a partner, someone who is already experienced? I have tried that as well but no one is really interested, how do I go about this? I wouldn't partner with someone I don't know. So, I'd overcome this by getting to know people and them getting to know me. What value can you bring to a business partnership? What is your value proposition? It is probably a wise move to go about this with a partner initially, so decide on if you are going to and then take the appropriate steps to securing it. Remember, consistent effort over time!
4) Even the distressed houses are only offering to be sold for a max $100,000 lower than regular asking price, which can't turn any profit, is it due to the market today? Is it even worth it to try to do flipping in todays market? As others stated it is a challenging market. It doesn't mean it can't be done but it should show you the benefit of having an experienced person you partner with. If you bought a flip today, and it took 6 months to finish, and the market trajectory is downward over six months, can you still profit if the house value is whatever % less in 6 months? Maybe a consideration for you is that over the course of the next year, instead of getting a flip house, you spend time and invest in networking (invest meaning time, not necessarily money), securing an agent, contractors, and maybe even leads. Maybe you find a lead on a flip house and you've got a network of flippers you work with and then can feed them a project (bringing value to them) and you can "partner", or shadow, the whole endeavor.
Good luck! Stay consistent!
3 Reply
Shalom Wininger
OP
New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote
3y
Thanks Randy, for one, I wasn't planning on buying from any wholesalers, as good ones are few and far in between and it minimizes your profits, and especially in todays market where there is even less profits. Secondly, I was planning on putting down the money for the deal and bringing the deal to another experienced flipper to partner with and get the hands on experience like that first hand while also bringing in a profit. Also I am fine with not splitting 50/50, as long as I learn the ropes and will be able to eventually do it on my own. Do you think someone would be willing to partner in such a deal, where I bring the deal with the money, and he helps me out with the rehabbing, so I can learn and get experience?
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Vanessa Ivonne Hernandez
Lender · Jersey City, NJ · Member since 2020 · 101 posts · 43 votes
3y
Have you gone to any REI meetups in your area to connect with other investors and find potential partners? Nothing beats a face to face interaction to make sure you and your partner are aligned in your vision.
What I like to do is find other real estate investors on the meetup app. You can search by your interests and location. I'm in Northern NJ and I found 3 groups on there. It's helped keep me immersed and focused on my real estate journey. Give the app a shot, it may help you make solid connections. Good luck!
0 Reply
Shalom Wininger
OP
New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote
3y
Thanks Aaron, I really liked your advice, especially when it is coming from an agent who can direct me in the ways that agents think. To start off, I was planning on getting funds from a hard money lender, I know that isn't the best rout, but I can't really get other ways as I am not so experienced. I am not sure if they will even provide me with a proof of funds, so it is hard to present that to any agents. I do have leads that I am working on.
As for your second point, these are off market deals, I have heard of others making deals themselves without any agents, how do they do that? How would I make an offer, I have no official contracts like an agent does? I like your idea of paying the agent price myself if it is worth it, I thought like that as well.
I believe I have value to bring into a partnership, I am very determined and motivated, and very ambitious, but I guess they wouldn't know unless I show them, which networking and working with someone will definitely help.
I appreciate the advice of consistent effort, I realized this and am trying to keep my head up and not get discouraged, thanks for your advice.
0 Reply
Shalom Wininger
OP
New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote
3y
Thanks Vanessa, I should consider REI meetups it sounds like it can be very helpful with making some connections.
0 Reply
David Ramirez
Investor · Tampa, FL · Member since 2019 · 1k+ posts · 1k+ votes
3y
Hey @Shalom Wininger,
Nothing worth creating comes easy!
Before I did my first flip I had similar questions and I had trouble finding answers because I was not believing 100% in the product. I was able to overcome all obstacles by taking time to learn from people that were doing what I wanted to be doing. Start by connecting with investors in your area and learn as much as you can from every individual you get to meet.
Feel free to reach out with any questions!
2 Reply
Aaron SchraderBusiness Member
Real Estate Agent · SD · Member since 2020 · 137 posts · 65 votes
3y
For your question - As for your second point, these are off market deals, I have heard of others making deals themselves without any agents, how do they do that?
You should be able to look for the purchase agreements your local agents are using online, talk to the association of realtors for your area or even ask an agent that you have some relationship with. Purchase agreements aren't inherently difficult to understand, but it would be good to have someone familiar walk through the different points on a PA with you. A slightly more expensive route is to contact a real estate attorney and see what documents they have and use. Just remember a PA is a contract to buy real estate, so don't enter into a contract without understanding it and being willing to execute it.
I believe I have value to bring into a partnership, I am very determined and motivated, and very ambitious, but I guess they wouldn't know unless I show them, which networking and working with someone will definitely help.
I'm sure you do bring value into a partnership! But how will someone who doesn't know you learn this about you, besides you telling them? You already shared your answer, and you're right, you're going to need to demonstrate your determination, motivation and ambition. Consistent effort over time! (I have this written on my whiteboard wall). I think the big thing in your spot is to have your targets and goals, constrain them with time so that you have some pressure to hit them, but also be okay with things proceeding at a measured pace. As you achieve some of these goals like your networking, connections, etc, which take time, I believe you'll see the other things like finding properties and flipping homes arrive quicker. Right now continue to learn and network, and don't burn bridges!
0 Reply
George Ansong
Real Estate Agent · Marietta, GA · Member since 2013 · 9 posts · 1 vote
3y
Get a mentor to help guide you - Also there are investor Agents in this forum in your area that could help. Learn from some one who is doing flips - remember - everything being equal flips are much more riskier
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Shalom Wininger
OP
New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote
3y
Quote from @David Ramirez:

Hey @Shalom Wininger,
Nothing worth creating comes easy!
Before I did my first flip I had similar questions and I had trouble finding answers because I was not believing 100% in the product. I was able to overcome all obstacles by taking time to learn from people that were doing what I wanted to be doing. Start by connecting with investors in your area and learn as much as you can from every individual you get to meet.
Feel free to reach out with any questions!

Thanks David. This was great advice, knowing that I was not the only one starting off with these questions is calming and encouraging that I should continue and just press on. I am going to go ahead with the advice from this forum and do networking and build those connections and trust with other investors.
1 Reply
Carlos Ptriawan
Member since 2019 · 7k+ posts · 4k+ votes
3y
Quote from @Shalom Wininger:

Hi,
My name is Shalom Wininger. I am new to real estate and am trying to start off by doing fix and flips. I did research into it and am very familiar with it and how it works. I just have no experience at all. I am living in New Jersey and am looking into real estate here as well. I had a few questions that perhaps someone can advise me on. 1) I was told to get a real estate agent to help, I have been trying to get an agent to help me, but most of them never get back to me and the ones that do, and I tell them what I am interested in doing, they never follow up with me and it is hard to keep chasing them, any advice as to what I should do about this? 2) I would try to do deals myself but I don't know how to do that, I have no contracts and I have no clue how to make and write an offer to even start anything off, the only way I can think of making any offers is with an agent, but that will cost the seller an agent fee and will minimize my chances of getting any deals, what should I do about this? 3) Is it best to try to get a partner, someone who is already experienced? I have tried that as well but no one is really interested, how do I go about this? 4) Even the distressed houses are only offering to be sold for a max $100,000 lower then regular asking price, which can't turn any profit, is it due to the market today? Is it even worth it to try to do flipping in todays market? Any help and advice is greatly appreciated, thanks to all.

To be successful:
1. you need to know comps dynamic at certain block / zip code.
2. you know the estimate rehab cost prior of even coming to property based on reading property inspection.
3. then there's the ARV aspect and when you plan to sell.
4. you should not rely on realtor, my realtor usually depends on me lol
5. the area that has the most appreciation, is the one that's worthed to pursue.
1 Reply
Lala Laza
Member since 2023 · 1 post · 0 votes
3y
Quote from @Shalom Wininger:

Quote from @David Ramirez:

Hey @Shalom Wininger,
Nothing worth creating comes easy!
Before I did my first flip I had similar questions and I had trouble finding answers because I was not believing 100% in the product. I was able to overcome all obstacles by taking time to learn from people that were doing what I wanted to be doing. Start by connecting with investors in your area and learn as much as you can from every individual you get to meet.
Feel free to reach out with any questions!

Thanks David. This was great advice, knowing that I was not the only one starting off with these questions is calming and encouraging that I should continue and just press on. I am going to go ahead with the advice from this forum and do networking and build those connections and trust with other investors.
Since at the end you are considering go in all this for 10-20% profit per property did you consider investing abroad since you don't have experience and there are companies or agents in Europe that can do whole cycle with you and give you same kind of profit with no expertise needed from your side and no unnecessary pressure. I started as that and than become agent for Serbia investing. It is by my opinion option with minimal risk and potential same as that you get going in this on your own with no experience.
0 Reply
J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
3y
My thoughts:
1) I was told to get a real estate agent to help, I have been trying to get an agent to help me, but most of them never get back to me and the ones that do, and I tell them what I am interested in doing, they never follow up with me and it is hard to keep chasing them, any advice as to what I should do about this?
There are agents that are accustomed to working with investors, but most aren't. And those who aren't likely won't be very helpful/responsive. If you want to work with an agent, find one that is accustomed to working with investors. The best way to do this is to attend local REIAs or meetups and network with other investors -- they'll know the agents who understand investing.
2) I would try to do deals myself but I don't know how to do that, I have no contracts and I have no clue how to make and write an offer to even start anything off, the only way I can think of making any offers is with an agent, but that will cost the seller an agent fee and will minimize my chances of getting any deals, what should I do about this?
If you want to represent yourself, I would suggest taking a real estate course and getting your license (or at least taking the course). You'll learn how transactions are done, you'll get access to the contracts that are used locally, and you'll get an understanding of how to navigate a deal/closing without another agent involved.
I'm a big proponent of getting your license, but not to save money. Having your license will give you the opportunity to maintain much more control over your deals -- you'll be able to talk to the other party's agent, lender, appraiser, inspector, title company, etc. -- without having to go through your own agent. When you're licensed, you have a lot more ability to insert yourself into the process and stay informed on the true status of the deal.
If you don't want to get licensed, there are a couple options for contracts:
* You can download a generic contract off the web (this is risky, as it may not be suitable for your area);
* You can find a local realtor who will give you a copy of the template used by local agents (legally, you're not supposed to use these if you're not licensed, but I won't tell);
* You can hire a local real estate contracts attorney to provide you a custom contract you can use.
3) Is it best to try to get a partner, someone who is already experienced? I have tried that as well but no one is really interested, how do I go about this?
I'm a huge fan of a partnering on early deals. Is there a reason nobody is interested?
What are you offering? What feedback are you getting specifically?
4) Even the distressed houses are only offering to be sold for a max $100,000 lower then regular asking price, which can't turn any profit, is it due to the market today? Is it even worth it to try to do flipping in todays market?
It's a tough market to be starting out, simply due to the fact that nobody knows where values are headed short-term. If you do a deal that has a 15% profit margin, and values fall 10% in the next few months, that doesn't leave you a lot of room for error (or much profit).
That said, now is a great time to get prepared -- get your license (if you want to go that route), figure out your financing plan, get intimately familiar with your farm area, find partners, find contractors, etc. There is likely to be a great opportunity for flippers in the next 6-24 months (depending on how quickly the economy turns), and using this time to prepare is the best thing you can do. That way, when the time is right, you can hit the ground running...

Podcast Guest on Show The Truth About Real Estate Investing in 2024 (What Investors NEED to Know)
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Amy Shutes
Specialist · Charlotte, NC · Member since 2021 · 185 posts · 106 votes
3y
I'm an investor friendly Realtor. I am in the Charlotte metro area. I am also an investor myself. If you are looking in the Charlotte metro area please let me know if I can assist.
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Shalom Wininger
OP
New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote
3y
Quote from @George Ansong:

Get a mentor to help guide you - Also there are investor Agents in this forum in your area that could help. Learn from some one who is doing flips - remember - everything being equal flips are much more riskier

Thanks George. Yes, I am seriously looking into this, as others in this forum have mentioned. I was trying a route similar to this, just trying to already bring a deal to the table and get the first hand mentoring that way.
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Shalom Wininger
OP
New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote
3y
Quote from @Carlos Ptriawan:

Quote from @Shalom Wininger:

Hi,
My name is Shalom Wininger. I am new to real estate and am trying to start off by doing fix and flips. I did research into it and am very familiar with it and how it works. I just have no experience at all. I am living in New Jersey and am looking into real estate here as well. I had a few questions that perhaps someone can advise me on. 1) I was told to get a real estate agent to help, I have been trying to get an agent to help me, but most of them never get back to me and the ones that do, and I tell them what I am interested in doing, they never follow up with me and it is hard to keep chasing them, any advice as to what I should do about this? 2) I would try to do deals myself but I don't know how to do that, I have no contracts and I have no clue how to make and write an offer to even start anything off, the only way I can think of making any offers is with an agent, but that will cost the seller an agent fee and will minimize my chances of getting any deals, what should I do about this? 3) Is it best to try to get a partner, someone who is already experienced? I have tried that as well but no one is really interested, how do I go about this? 4) Even the distressed houses are only offering to be sold for a max $100,000 lower then regular asking price, which can't turn any profit, is it due to the market today? Is it even worth it to try to do flipping in todays market? Any help and advice is greatly appreciated, thanks to all.

To be successful:
1. you need to know comps dynamic at certain block / zip code.
2. you know the estimate rehab cost prior of even coming to property based on reading property inspection.
3. then there's the ARV aspect and when you plan to sell.
4. you should not rely on realtor, my realtor usually depends on me lol
5. the area that has the most appreciation, is the one that's worthed to pursue.

Thanks Carlos. Yes I know to well all this information, I did a lot of research. Also, I wasn't planning on relying on an agent, I am realizing that if I want something done, the best way to get that is by doing it yourself, I need an agent to help with purchases and resales of the properties I bring and perhaps to help me with areas and running some data for me.
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Callaway Pate
Real Estate Agent · Washington, D.C. · Member since 2022 · 37 posts · 15 votes
3y
Shalom, I think your idea of bringing on an experienced partner is a good idea. If you go to a local real estate group with a deal that has good margins there's a good chance you can find that partner who will come on the deal and help guide you in return for a slice of the profits. The real hurdle is finding that great deal. I'd encourage you to take a more creative (yet harder) approach of calling off-market distressed properties near you or driving for dollars. This is likely where you can find that discount you're looking for. It'll be tough and highly embarrassing at first but if you're committed you'll get used to it and when you have something under contract you can bring that to a partner.
Best of luck!

0 Reply
Shalom Wininger
OP
New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote
3y
Quote from @Lala Laza:

Quote from @Shalom Wininger:

Quote from @David Ramirez:

Hey @Shalom Wininger,
Nothing worth creating comes easy!
Before I did my first flip I had similar questions and I had trouble finding answers because I was not believing 100% in the product. I was able to overcome all obstacles by taking time to learn from people that were doing what I wanted to be doing. Start by connecting with investors in your area and learn as much as you can from every individual you get to meet.
Feel free to reach out with any questions!

Thanks David. This was great advice, knowing that I was not the only one starting off with these questions is calming and encouraging that I should continue and just press on. I am going to go ahead with the advice from this forum and do networking and build those connections and trust with other investors.
Since at the end you are considering go in all this for 10-20% profit per property did you consider investing abroad since you don't have experience and there are companies or agents in Europe that can do whole cycle with you and give you same kind of profit with no expertise needed from your side and no unnecessary pressure. I started as that and than become agent for Serbia investing. It is by my opinion option with minimal risk and potential same as that you get going in this on your own with no experience.

Thanks Lala. This is an interesting idea, not something that I was really focusing on, I would love to learn more about this, do you have anymore info on this? I'll keep it on the back burner.
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Shalom Wininger
OP
New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote
3y
Quote from @J Scott:

My thoughts:
1) I was told to get a real estate agent to help, I have been trying to get an agent to help me, but most of them never get back to me and the ones that do, and I tell them what I am interested in doing, they never follow up with me and it is hard to keep chasing them, any advice as to what I should do about this?
There are agents that are accustomed to working with investors, but most aren't. And those who aren't likely won't be very helpful/responsive. If you want to work with an agent, find one that is accustomed to working with investors. The best way to do this is to attend local REIAs or meetups and network with other investors -- they'll know the agents who understand investing.
2) I would try to do deals myself but I don't know how to do that, I have no contracts and I have no clue how to make and write an offer to even start anything off, the only way I can think of making any offers is with an agent, but that will cost the seller an agent fee and will minimize my chances of getting any deals, what should I do about this?
If you want to represent yourself, I would suggest taking a real estate course and getting your license (or at least taking the course). You'll learn how transactions are done, you'll get access to the contracts that are used locally, and you'll get an understanding of how to navigate a deal/closing without another agent involved.
I'm a big proponent of getting your license, but not to save money. Having your license will give you the opportunity to maintain much more control over your deals -- you'll be able to talk to the other party's agent, lender, appraiser, inspector, title company, etc. -- without having to go through your own agent. When you're licensed, you have a lot more ability to insert yourself into the process and stay informed on the true status of the deal.
If you don't want to get licensed, there are a couple options for contracts:
* You can download a generic contract off the web (this is risky, as it may not be suitable for your area);
* You can find a local realtor who will give you a copy of the template used by local agents (legally, you're not supposed to use these if you're not licensed, but I won't tell);
* You can hire a local real estate contracts attorney to provide you a custom contract you can use.
3) Is it best to try to get a partner, someone who is already experienced? I have tried that as well but no one is really interested, how do I go about this?
I'm a huge fan of a partnering on early deals. Is there a reason nobody is interested?
What are you offering? What feedback are you getting specifically?
4) Even the distressed houses are only offering to be sold for a max $100,000 lower then regular asking price, which can't turn any profit, is it due to the market today? Is it even worth it to try to do flipping in todays market?
It's a tough market to be starting out, simply due to the fact that nobody knows where values are headed short-term. If you do a deal that has a 15% profit margin, and values fall 10% in the next few months, that doesn't leave you a lot of room for error (or much profit).
That said, now is a great time to get prepared -- get your license (if you want to go that route), figure out your financing plan, get intimately familiar with your farm area, find partners, find contractors, etc. There is likely to be a great opportunity for flippers in the next 6-24 months (depending on how quickly the economy turns), and using this time to prepare is the best thing you can do. That way, when the time is right, you can hit the ground running...

Hi J,
This is awesome! I have tried reaching out to you about these questions. I am a big fan! Your books were so helpful, I use your books as my go to source, I have gained so much from your books.
1) I am trying to find an agent who is accustomed to working with investors, again they never follow up or they send me on wild goose chases. I am going to try the REIAs and meetups root.
2)I like the idea of getting a real estate license, as I know you are very into this, I am just a little hesitant to, as I am afraid to invest so much time when I don't know if I will even be successful, but that is part of the risk. Also, I really only have time at night, not sure if there are any courses that I can do online and at night.
3) I never actually came to anyone with a deal to see if they would like to partner, is it better to approach them and find out if they would be interested in partnering with me if I bring them a deal or first get the deal and then approach them? My offering for now will be to bring them a deal that they never thought about and even give them most of the profit, in exchange for me to learn first hand every aspect of how to do a flip. Also, like others mentioned, even to work for someone and learn from them and perhaps bring in a deal or two along the way at some point.
4) Your advice of starting to get prepared is great advice I want to do that but like I said I am hesitant to jump in as I don't know if I will be successful, but I guess that is part of the risk in RE.
0 Reply
Shalom Wininger
OP
New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote
3y
Quote from @Amy Shutes:

I'm an investor friendly Realtor. I am in the Charlotte metro area. I am also an investor myself. If you are looking in the Charlotte metro area please let me know if I can assist.

Thanks Amy for reaching out, I really appreciate it, but currently I am more interested in the Jersey area, but thanks for your offer.
0 Reply
J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
3y
I've seen a lot of not-so-smart people (and many of them would admit it) do tremendously well in real estate.

The only thing that will determine your success or failure is your willingness to continue putting in the effort until you're successful.
As long as you resolve to not give up, you will be successful.
Podcast Guest on Show The Truth About Real Estate Investing in 2024 (What Investors NEED to Know)
0 Reply
Peter Davis
Real Estate Broker · Cape Coral, FL · Member since 2014 · 382 posts · 300 votes
3y
@Shalom Wininger
Good for you for getting into RE investing; it's a fun game!
To echo several of the other responders, the most important thing you can do is buy the home right, meaning as low a price as possible. This will give you a cushion against unforeseen problems throughout the process, and a better chance of reaping bigger profits. I used to look at 10's to close to 100 potential flips in search of hidden value and by doing so you'll sharpen your instincts so that when the right one comes along, you can sense it, then analyze it quickly, and jump.
I also did 80% of the work myself, pretty much everything except major plumbing and electrical. That's where I added the most value, at least early on. Paying a GC to manage and complete the work didn't work for me but if you don't have the time or basic skills, then you'll have to negotiate hard on the fix up.
You can reach out directly to the listing agent to see and make an offer on any potential homes. They love getting both sides of the commission; I know I do. In these instances I give my seller a 1-2% commission discount (pigs get fed, hogs get slaughtered), so that might work in your favor. But beware, as the agent's #1 priority often will be looking out for the seller's best interests (and their own) so scrutinize everything you're told and dissect everything you see; cover your own butt.
Dig in, and good luck!
0 Reply
Shalom Wininger
OP
New to Real Estate · Lakewood, NJ · Member since 2020 · 13 posts · 1 vote
3y
Quote from @Callaway Pate:

Shalom, I think your idea of bringing on an experienced partner is a good idea. If you go to a local real estate group with a deal that has good margins there's a good chance you can find that partner who will come on the deal and help guide you in return for a slice of the profits. The real hurdle is finding that great deal. I'd encourage you to take a more creative (yet harder) approach of calling off-market distressed properties near you or driving for dollars. This is likely where you can find that discount you're looking for. It'll be tough and highly embarrassing at first but if you're committed you'll get used to it and when you have something under contract you can bring that to a partner.
Best of luck!

Thanks Callaway. I actually did this approach, I drove for dollars, and I have found some great opportunities, like vacant disserted houses in disrepair and other distressed houses, I never actually contacted any of them but I have found them. I have seen some of them recently have been sold so others have found them as well, but I found these properties months before already. I didn't really know how to make the next moves without any experience or with an experienced flipper so I didn't go any further.
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