Looking to do my first fix & flip out of college

New to Real Estate · Winston-Salem, NC · Member since 2024 · 2 posts · 1 vote

Hello, my name is Zach Jarvis. I am a 3rd-year college student seeking to jump right into real estate once I am out of school. I will be in the Winston-Salem, NC area. I am open to any advice on the steps I should take to have a plan of action. Where should I start? What should be some things I look for when trying to find a fix and flip? Should I get a loan or seek private investors? These are a few of the many questions I have. If you have any insight or are willing to give advice, please reach out. I am young and inexperienced, but eager to learn about REI so I can control my future. Thank you

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Nicholas L.Pro Member

Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes

@Zachary Jarvis

definitely don't start out with private lending.

just do either a house hack or a live in flip.

look into 203K loans.

https://www.biggerpockets.com/blog/live-in-flip

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Nicholas L.Pro Member
Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
2y
@Zachary Jarvis
definitely don't start out with private lending.
just do either a house hack or a live in flip.
look into 203K loans.
https://www.biggerpockets.com/blog/live-in-flip
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Jacob Sherman
12 Penns Trail Suite 138 Newtown, PA 18940 · Member since 2023 · 1k+ posts · 319 votes
2y
You are able to get fix and flip financing with about 30% down on the purchase and lender will provide 100% of construction
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Wyatt WolffPro Member
Lender · Charlotte, NC · Member since 2019 · 467 posts · 279 votes
2y
Get a job right out of school unless you have family money. Use said job to buy a house, and rent out all the rooms. You will learn about property management, taxes. contract law, and people management.
Save money. Lather rinse repeat. Good luck.
Shoot me a PM if you would like to chat about it some!
[email protected]
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Bill J FayPro Member
Lender · San Diego · Member since 2023 · 216 posts · 209 votes
2y
I agree with @Nicholas L. A house hack would be a great start. Although if you come across a deal, wholesaling could also be a great start. You'll need about 20% down + fees if you want to work with Hard Money Lenders for your 1st flip.
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Shawn Parsh
Real Estate Investor · TN · Member since 2010 · 294 posts · 160 votes
2y
Zackary,
I see you have been given solid advice already, but I thought I would add my input. I would read as many books on real estate investing as I could to more quickly learn the business. I would join a local real estate investing club and figure out what members are actual investors and which are "going to be" investors. Then pick their brains about your local market.
I would review listings on line on a regular basis to get a better gauge on what properties are selling for and what seems to be in demand. I would also look into rental rates in your area, vacancy rates, and the demand. I would talk with multiple realtors to find one that is experience in investment real estate and is willing to help teach you the business. A good one will realize that a little time investment up front will likely turn in to future commissions.
In addition to the other advice I would look into lease options otherwise known as rent to own. I have bought many properties over the years with little to no money down with lease options. In my experience the odds of a seller accepting a lease options goes up as the property condition goes down. You could find a property that needs work, sign a lease option contract, and then live in and rehab the property. Once you have finished the rehab you could go to a bank get a loan and purchase the property. I've done it many times where I did not have to put any money down for the purchase. My investment into the property was the money I spent on the rehab. The after repaired value was much higher then my purchase price which made it a good deal for the bank and me as the investor.
Anyway, I hope something I said helps. Good luck my friend.
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Mike Klarman
Specialist · NJ · Member since 2022 · 1k+ posts · 656 votes
2y
Well Zach, you are making a smart move. RE really does not let down in the long run. You know anyone that got into real estate 20 years ago and is hurting for cash? Probably not.
I deal with lots of new investors. I urge you not to put the cart before the horse. I'm going to give you some advice because I know the borrower profile that big box lenders like.
First, get your credit as high as possible. Open up at least three credit cards. Charge one or two things a month on each and pay them off. This will give you a trade line history and boost your credit. Lenders will look at the number of trade lines you have open and your credit history within each one. Most require 3 open trade lines of at least 2 years. I'm sure you have a credit card but open a few more but only for the purposes of seasoning your credit history.
The next area is capital. You need at least 30k - 40k. All projects have life cycles. There's costs at times in that life cycle, the smallest deals will cost 20k -25k through the entire lifecycle so you do need some capital to get started.
The asset. Get in a deal that makes sense for you and the lender. Here is a deal that makes sense:
80k purchase
50k rehab
190k ARV
That makes sense for a lender to take a shot at a new investor on the above deal. Especially of their credit is 750 and they have 50k. Risk level is light
But if the deal looks like:
140k purchase
160k rehab
420k ARV
The above deal is twice the size, the rehab is more than the purchase price, the ARV is in a range where houses can take 3 months to sell. The borrower has iffy credit and only 30k. This is HIGH RISK for a lender and they would not lend to a new investor.
Open up some credit cards, boost your credit, and save some money.
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Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
2y
My advice (being in a construction mindset) would be to learn as much about construction as possible. Read books, watch YouTube videos, go to the Home Depot 'How-To' classes, even get a part time job working for a GC.
If you're going to be in the flip side of RE, you need to have the knowledge....that's where most people fail.
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Evan Polaski
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
2y
@Zachary Jarvis, the real key to success, and the major variable and risk in any flip is the construction side, like Bruce noted. Learn as much as you can on that front. Looking for properties to buy is easy. Finding ARVs is not too much a challenge. Even the financing side is pretty straightforward math.
Knowing what to look for in your initial tour, knowing how to ballpark renovation costs, knowing if contractors are taking advantage of you in bids are all components that can make or break a deal.
Other tips, as noted: get the highest paying job you can out of school and save as much as possible. All real estate is a capital intensive business. Margins are already thinner than they used to be on flips, and, especially, as you are learning, taking risk out by putting more cash into deals buys you a little flexibility.
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Daniel Stoychev
Investor · Sarasota, FL · Member since 2022 · 29 posts · 14 votes
2y
@Zachary Jarvis
Congrats on your decision to get into real estate. Buckle in!
Make sure you understand your personal financial situation. I would say you need to make sure you have a good solid foundation.
Money in the bank for living expenses, emergency fund at least 6-12 months, if not more. If you think it will be a quick, easy and boom your rich! Forget about it. Especially with the first deal.
I always tell new investors. Yes you need to make money, that's the point, but if you don't, its one hell of an experience and the lessons you will learn on your first few deals is what it's mainly about.
Talk to guys that are in your area that have done that. Take them out for coffee or lunch, maybe see if they are open to JV deal. If you can mitigate your risk in the beginning, yet still get that experience, that would be great!
Hope that helps a little.
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Wale LawalBusiness Member
Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
2y
@Zachary Jarvis
It's wonderful to learn that you want to start investing in real estate while you're still a college student. To begin real estate investment, do the following actions:

1. Learn about property management, market trends, and real estate investing tactics.
2. Specify your objectives, such as wholesaling, rental homes, fix and flips, or other business ventures.
3. Perform a comprehensive market analysis in Winston-Salem, North Carolina, taking into account the demand for rentals, property values, market trends, and attractive neighborhoods.
4. Specify the requirements for the property, such as its kind, size, condition, location, extent of the renovations, target buyer demographic, and possible resale value.
5. Examine several funding choices, including partnerships, hard money loans, private loans, and traditional mortgages.
6. Establish connections with experts in the field, including wholesalers, bankers, contractors, real estate brokers, and seasoned investors.
7. Before submitting an offer, thoroughly investigate possible properties through due diligence.
8. Create a thorough remodeling schedule and budget, choose reputable contractors, secure licenses, and supervise the work.
9. To optimize profits and reduce risks, maintain organization, track the status of projects, and quickly resolve any problems that arise.

Recall that investing in real estate calls for endurance, patience, and ongoing education. Begin modestly, take measured chances, and absorb failures as well as victories. You can take charge of your financial destiny and create a profitable real estate investing portfolio with commitment and initiative.
Good luck!
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