Flipping / Funding
I am a new investor with a real estate background, I am trying to navigate private funding and a strategy to get into the market. Being I do not have 20-30% in a downpayment to do the BRRRR method. I was leaning towards flipping real estate. Would love insight or any information on making this a reality. I am an investor in central Florida.
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We started with my lending background and not a lot of capital. I got a business parter with capital and some experience and we hired a GC on the first few flips. Find someone that brings to the table what you don't and partner with them. Once you get some capital and experience, then progressively step up to bigger and bigger projects. That's how we did it.
If you are already BRRR-ing, then you should have options with less down, probably closer to the 15% down ballpark. If the lender is requiring you to put 30% down on a flip, its likely because the deal itself doesn't look great and they would want you to put more 'skin in the game'.
It certainly can get tricky in Central Florida, but would be happy to help where I can if you need help looking at any deals specifically.
Good luck!
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#2 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Initial purchase to buy/rehab should be around ~15%. However, a lot of lenders will require previous rehab experince. Something to keep in mind while vetting.
For flipping I have found 10-15%, For BRRR strategy I have seen 20-30%. Curious on creative ways to fund a deal if you didn't have private money for the BRRR strategy.
Also, if anyone has recommendations on skip tracing software?
We started with my lending background and not a lot of capital. I got a business parter with capital and some experience and we hired a GC on the first few flips. Find someone that brings to the table what you don't and partner with them. Once you get some capital and experience, then progressively step up to bigger and bigger projects. That's how we did it.
I have great contractors, Property management experience and multi family, very familiar with renovations as well. Navigating the lending and finding people to partner with is an obstacle I’m learning currently. Thank you for your insights. I will work on that.
You bet. I'm right down the road from you. I did it and I'm not that smart...lol. I've financed a bajillion flip deals in addition to doing it myself. You're doing it right.
@Jessica Taylor There is plenty of private money out there! The 'ole saying, if you have a great deal, the money will come' is actually real. I am a board member with CFRI, the local chapter for the national REIA and I personally know about a dozen private lenders that are members. If you come to meetings and network you can easily find it if you have a deal that the numbers work. There are also several hard money lenders as well as lenders that specialize in DSCR or Non QM loan products too.
Let me know if you'd like to attend a meeting, I can get you a guest pass.
Best of luck
Very hard to get started with no capital. Even in the smaller markets, a life cycle of a deal can stretch out 6 months before the exit and that can cost 30k once all is said and done.
I like to tell people 50k is a nice starting point capital wise. There's plenty of markets in the US where deals can require 25k all in on all costs. Florida is not one of them however. Mostly in the midwest, southeast and south west.
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@Jessica Taylor do you mean wholesaling?
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