Good morning all. I havent posted for a while...life has been pretty busy since my wife and I bought our first property earlier this year(4-unit multi). We have rehabbed 2 of the 4 units, and are fully rented, and making good money now. Things are going great, and we are ready to start thinking about the big question...What is next? So we bought our last property with 20% down, and used up a good portion of our other savings with the rehab of the other units(new bathrooms, flooring, paint, and an A/C unit). I would estimate that we have around 20-30k in equity right now, but i am trying not to use it. i want to keep buying properites without touching any equity, just money from my savings, and the income from the property we alread own. --the goal would be to use all equity in a few years to buy a much larger property with equity from any/all properties we have acquired.
All of that being said, it is going to take a long time to save up for the next multi-family purchase, and 95% of my research in the past two years have been on buy and hold...not flipping. I feel that flipping a house could make the extra income that I need to buy the next property. I live in the midwest, and a nice home doesnt sell for the huge money that the flippers on the East/West coasts on TV flip. The margins seem pretty small for a flip. i could buy a property for 40-50k, and once totally rehabbed still be lucky to reach 100k(probably more like 85k-ish). I guess there is a little room for profit, but not sure it is worth the time and effort for such a small possible profit.
So...can you flip in any market? where should i start my research? I have been re-listening to the flippers podcasts, and I am going to order J Scott's book after i finish the two i am reading. So what advice do you have? I appreciate it!
Are you only interested in homes? I have done the SFR flip a few times, had a blast because I truly enjoyed the process, but found more profit in buying and selling land.
Maybe consider other types of properties to build up your capital while watching for your next great deal?
And to answer the "can you flip in any market" question - the answer is yes - as long as you do your homework AND buy it right. I sat with a very successful commercial developer from Minneapolis at a comedy club last night & we both agreed that You Win When You Buy It.
Just a thought.... Jill
There are likely deals available everywhere as long as you are willing to work hard enough to find them. If you know you could get $85K up to $100k for a house in your area, then you have to find a house which has a total purchase and repair cost of less than $59K (70% of $85K). They are out there you just have to find them. If you spend $2K on a yellow letter campaign and you are able to make $15-20K on the flip then it is money well spent. Similarly, if you pay a wholesaler $5K on a $40K house that needs $15K in repairs that is also money well spent.
But it is imperative to have a very good handle on repair costs and ARV!
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So @DJ Cummins ,
can you let us in on what happened with the lady who passed away? Curious what you found out, how it was handled, etc. A lot of people contributed to the post but you never responded with what happened.
yes, sorry ronald, I'll go back and post. It's been a crazy month
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