Hey everyone, I am a newbie in the house flipping game. I have studied, read books and listen to countless pod casts on flipping house. I am just about finished with "The Book on Flipping Houses" by J. Scott and Brando Turner from bigger pockets. I am knowledgeable about my real estate market in Traverse City, Michigan, I have a cousin that is a real estate agent, so i have access to the MLS, I have done research about what townships sell the most houses, at what prices, and the similarities about the houses sold. I feel I am ready for my first deal, I have been scouting, I went and viewed one, put together a cost analysis using the bigger pockets house flipping calculator, material, labor, holding and fixed costs and from that there was around $24,000 profit left after considering the loan at 10%. Well, i didn't have an investor ready and the house sold to someone else. Another great opportunity arose and was sold a few days later. At this point I need an investor ready to go, but what do i say to her to convince her I know what I am doing, considering that I don't have a deal right at this moment and that I have not flipped a house in the past. Please help guys, I am meeting her in a day or two. Thanks!!!
Everyone asks "What's new?" Tell them. "I just missed a killer real estate deal because I couldn't get the money fast enough. If I could have found a lender at 10% I would have made $24K!" Say that around enough people and someone will ask "Gee how much would you need?"
That is solid advise. Thank you Ned!
David I'm in the same position although I do have 1 investor. I personally really like the flipping/wholesaling calculators here on BP. They are super easy to use and put the info together in a way that looks professional for lenders while giving you the confidence that all your numbers work together for the deal
Use your cost estimating sheets to show the two examples to prove out your due diligence. From an investors standpoint if the deal makes since then the money will come. If you can bring another potential deal with you when you meet then will create the urgency to close on the investor.
Thanks everyone, for the advise. It has been very helpful. I should know by the end of next week if I've got an investor. I will certainly keep you all posted.
I was in your shoes a couple of years ago. Here's how I did it:
-I told many friends and family that I was working with real estate, and trying to find a good house to flip. Because they trusted me, and knew that I would only move forward if I was very confident I wouldn't lose their money, one or two of them said things like 'if you find a small deal, let me know!'
-So I started small. The first flip was a purchase of $6500, rehab of $4200, so $10,700 all in. This is hard to find, I know, but it helped.
-I offered an equity partnership to a friend I had known for 15 years. I found the deal and coordinated everything on the business end (realtors, closing, contractors, etc), he put in the cash. We both put in 'on the ground work' for the place, which was mostly very minor fix-up jobs (carpet, paint, doors, cleaning, etc). We then split the profits 50/50.
-It took probably 2.5 months from start to finish, which was a lot of time for the small amount of work, but it was my first one, and I was doing it nights and weekends after my regular job at the time (being full time now is nice!). We then split the profit - I believe we sold it for $37,500.
I was fortunate in a lot of ways with that deal, but the point is, that you can start with family and friends that trust you. If you can start with a small deal, all the better!
I think with an investor, you might be able to work similarly - prove that you are a reliable person, and start with a smaller transaction. Show them your plan, the team of people you have in place, and how you plan to run the operation. Good luck!!
This is all really helpful, I was able it get the interest of an old friend in a partnership. He is a GC, that should come in handy. I wasn't able to talk to the investor, but I've been chatting people up looking for other inestors, I also found www.lendinghome.Com. so if I can come up with 10% I should be able to use them for a loan... has anyone used them before? I know they only service like 6 states right now. Anyone ever partnered up with a GC before?
You have J scotts book, copy the prices there, talk to your GC without the book in hand, ask them if they could make everything work with those prices. Don't forget to put like 10% contingency, if yes move on with them, if not change GC. Just make sure they are legit and you have solid contract with them. Good luck.
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