Starting out, any advice?

Question

Hello Everyone, My girlfriend and I and getting into real estate investing, and we are rookies. I was wondering if we could get some advice on what our plan is so far. Currently I have been using Redfin, Zillow, etc to look at potential properties. I was wondering what would be the best strategy to fund our first flip, we don't have any capital, and we're thinking of going to Hard money, or private lending way, because banks won't approve us. From the research I have done there are a couple markets that are hot in our area, and we are wanting to get started asap. Is there anything or steps I should be taking too make our first move? Thank you

Jules Aton · Answer

Hi Axel, welcome!
Do you have any money available? Generally lenders want some skin in the game especially if you are new. My recommendation for first deal is a live-in rehab which gives you the opportunity to obtain favorable financing and avoid paying mortgage plus rent while you do updates.

Oleg Donets · Answer

@Axel Corado I'd suggest starting real estate investing by getting in to wholesaling. Wholesaling requires minimal capital but the upside is limitless. Not only your risk is minor with wholesaling, but you 'll also benefit in the process from the following:1) Acquire essential skills of sourcing off-market deals and negotiating with sellers2) Get access to nice chunks of cash through your assignment fees3) Have an opportunity to tap in to any market throughout the US4) Build a network cash buyers and other industry professionalsAnd perhaps more. From there, you'll be able to naturally transition into other investment models and expand your business.

Michael K Gallagher · Answer

@Axel Corado using hard and private money without a track record not only can be hard but can be expensive.  Not saying you can't be successful doing so, but certainly you'll have challenges.  If you are specifically looking to learn to flip the single best way I've seen it done well is a partnership.  I am not sure what market you are in, but here in central OH there is an operator that has an open offer to anyone if you bring him a deal, he will either pay you whatever fee you want (that still works with the deal) or he will partner withyou on it 50:50 and literally use his construction crews and business to flip the property and do the deal but you get to learn from an actual company doing it and take home half the profit.  I've honestly not seen anyone else do this kinda offer, but I've seen multiple people take him up on it and its really really impressive.

Corby Goade · Answer

Welcome!

My two cents...slow down a bit and start building relationships rather than spending all of your time dreaming on zillow. You don't have the capital or knowledge to make moves yet, so your time is best spent by reaching out to others investing in your market and learning from them and planning your first move and how to put that all together.

I'd be buying coffee and lunch for local flippers, agents, lenders, etc and ask them for referrals for others that they work with who are having success in your market.

I've said it a million times, but the absolute best way to start for someone in your position is to house hack a small multifamily- 2-4 units, as your primary. If it needs some love and you can paint and landscape while you live there and build up some equity, even better.

Best of luck out there!

Michael K Gallagher · Answer

gotta 1 up this idea here!  totally agree that house hacking is by far the best and lowest barrier to entry to get started.  especially if you can either purchase something in great shape and already done up, or using a construction loan but honestly I feel like the loans never end up being as great as they initially seem, and purchasing something already rehabbed or new built is honestly underrated from a risk perspective.

Michael Hernandez · Answer

Axel, since you are just starting out, the best move is to focus on learning how to find the right deal before worrying too much about funding. Hard money or private lending can work, but lenders will only step in if the numbers make sense and the deal shows profit after repairs and holding costs. Start building relationships with local agents, wholesalers, and contractors so you can get real numbers on costs and values. Run your math conservatively and make sure you have extra room for surprises. That groundwork will give you a much better chance of success on your first flip.

Charlene Livers · Answer

Realistically, you still need money down, like what Jules said. Without experience to leverage with lenders, you need at least 10 -20%. Build your capital. Wholesaling can be a great way to do that while also growing your network and learning the deal flow.

Johnathan Smith · Answer

Hey if i had any advice just don't lose faith in the process and don't let fear dictate your time and readiness to make a move that you have been thinking about some time. As an agent my clients usually lose out on their first one because they were not willing to trust what they have done to prepare for the moment. From getting the quote to fix the home to writing the check to secure the home itself. In our office we have one saying "Time kills all deals"

Kenisha Johnson · Answer

Congrats on taking the first step! That’s often the hardest part. I’d suggest focusing on building relationships with local lenders and investors, since having the right network can really make or break your first deal.

Scott Chilton · Answer

Hey Axel,Starting without capital is tough but not impossible. Hard money or private lending can get you in the game, but you need to be very sure your numbers leave enough profit after interest and fees. Spend time building a strong deal pipeline first so that when you approach a lender you can show a clear plan, budget, and exit strategy. Also think about finding a partner with funds who might be willing to split profits on the first deal. The key is to make your first project safe and simple so you build trust with lenders and confidence for yourself.

Starting out, any advice?

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