What was the biggest head scratcher during early fix and flips?

[Winson Zhi Jie Zheng]

Hi,

I started my real estate investment journey 3 years ago, house hacking near a college town. Appreciation and equity has grown on the house and I should be able to access about 300k through a HELOC on this property. I have been studying fix and flips for the past year and have been stuck in analysis given the current market. I have a trusted contractor team located in California and would be ideal to start here.

I would love to hear advice from seasoned investors about early successes or pitfalls and how to get the ball rolling. Looking forward to your words of wisdom!

[Carlos Ptriawan]

Quote from @Winson Zhi Jie Zheng:

Hi,

I started my real estate investment journey 3 years ago, house hacking near a college town. Appreciation and equity has grown on the house and I should be able to access about 300k through a HELOC on this property. I have been studying fix and flips for the past year and have been stuck in analysis given the current market. I have a trusted contractor team located in California and would be ideal to start here.

I would love to hear advice from seasoned investors about early successes or pitfalls and how to get the ball rolling. Looking forward to your words of wisdom!

While most flipper would give advice on the technicality, i would say flip reward/risk is created when you purchase and the future market trajectory based on external factor, such as inventory and/or future interest rate movement. The risk/reward really depends on location, time and the price you purchase (how much discount if any). For example, I would not do flip even if your purchase is 81% ARV, with DSCR loan of 11%, your LTV is 80% and price appreciation is midly 1% annualized. You would lose money even in paper.

Flipping is not like plumbing business where you can generate business 24/7, it's very timing sensitive business.