Hello my BiggerPockets fam,
I have been wanting to step into the fix and flip market for quite a while but wanted to build up a lil passive income with rental properties first. So I have recently purchased about 7 properties that I have either rehabbed or am in the process of rehabbing and renting. I feel that now is the time for me to jump into the world of flipping. The only thing is in my town I live in fixing and flipping would probably be a career crusher because there are an abundance of houses on the market now and the job market here sucks. People would rather rent than take a chance on owning. so I have decided to jump in the market in Memphis. Any advice for a first time flipper? Idea price point to start? Do's and dont's? Should I go with a realtor to find deals? things of that nature. Any help is much appreciated. Thanks
There is LOTS of competition in Memphis @Glenn Miller so be aware of that. Guys like Curt, myself and Chris C etc. all have teams buying everything we can. So you will find it super hard work to get deals here. Not trying to put you off but just warning you in advance. The worse the area the less competition you have so you may be able to flip to locals in low C and D grade areas. Most of us sell to overseas buyers and are buying in the 30 to 50K range depending on how much work they need.
Most realtors are of no use to you. There is a very powerful old boys network here and good deals generally never hit the MLS.
wow! I wanna be in that position in my area, soon! Buying good deals before they hit MLS.
Glenn, you already buying & rehabbing. The only next step would be to sell some for profit :). I know I know. Easy said then done. What Dean said sounds reasonable. Maybe try that to see if it's your niche, then re-adjust accordingly based on the first couple of deals.
Welcome to BP. It's a great place to be. What @Dean Letfus said is the truth. Have you considered direct mail? It is probably the best way to get leads. You can learn a lot here by typing it into the search bar.
As far as price point; if you are buying in lower end areas as Dean mentioned make sure you are buying even cheaper than you would normally. Run the numbers by someone here that actively works the market.
Let me know if you need any help!
best of Success to You.
The other thought is to look for a market that is more home owners and not investors. In Memphis that would mean looking at higher end homes. Have you thought about maybe Little Rock instead of Memphis?
@Glenn Miller I have to agree with looking at other nearby cities for your first flips. We are pretty experienced investors here in the city and even we stay away from the flip model. There are just a finite number of homes that are in good areas and most are on the east and northeast areas of the county. At the same time, there is a ton of competition for those from the people in town who are really good at flipping (again, we are not one of them!).
If you still want to give it a go in Memphis, just take all the precautions you can to minimize your risk. I know that sounds like a cliche, but in your scenario it is going to be true. You are looking for positive deals that allow you a payday. Most people who go down the route you are choosing do not get to the payday. So be careful and and super diligent as you get going and be sure to reach out to the people on here if you have a question or need help.
Best of luck -
One more thought. Have you considered working with a wholesaler in other areas like Nashville or Chattanooga? These are growing areas not far from Memphis with strong economies. We are finding some nice deals there.
Just thought I'd mention it :-)
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