I just went by a local home that was in the process of being rehabbed. The investor was not around, but I got the opportunity to ask the general contractor some questions. In our short conversation, I let him know that I had been interested in the house he was working on. Based on our chat, I think he could sense that I was a newbie. That assumption must have been made when I asked if he would be able to give me a rough estimate for another home I have seen in the area. He was nice enough to take a moment to chat with me. Although I lost the opportunity with that home, he did mention that it would not be a good home for a first time investor. Based on the repairs involved, the price of the house, and ARV; we both agreed that the investor would probably break even. He also went on to tell me that one of the first steps is to put the house under contract, before I consider getting an inspection from him or any other contractor. He mentioned something to the effect of making the contract contingent upon the inspection (I wish I could have written the steps down!). He says that he works with investors all the time, so I guess he's also knowledgeable on the details prior to taking over a property. My question to all experienced flippers and agents… What are the detailed steps involved? We all hear about the general processes, but what steps come before what?... Let's say that I came across a potential fix/flip deal. What steps do I need to take? Do I need to have a hard money lender lined up? (if I chose that type of financing)
The experience turned out well. I told the general contractor that I may need someone like him in the future. We exchanged info., and he may very well be someone I could consider working with.
@Orlando Paz I highly recommend you check out @J Scott's book on Flipping Houses which is available as a single item via amazon or as a bundle here on BP with his other book on estimating rehab costs. The flipping book literally lays out step by step what you should do and I like the fact that in the first few pages he lists an overview of all the steps.
great questions @Orlando Paz ! My husband and I are newbies as well and we had alot of the same questions. I did read the book mentioned above and it was a HUGE help! Answered pretty much all our questions and then some. Attending any local REIA meetings and getting to know other investors is a great start. There are alot of helpful people out there who can answer some of your questions. The forums on BP are great too! Lots of resources available.
If you are going hard money lender route, it's good to meet with a few and see what their terms are. Get pre-approved and see what you can afford property wise. Good luck and read, read, read!!!
I best advice to you is to speak with a potential hard money source to know what you loan amount options could be.Keep in mind that each flip is unique in it's own way. The other piece of the puzzle is to have your contractor or sub's lined up and vetted as well as the hard money source. When you are ready to make your move time becomes a precious commodity.
- Line up financing.
- View potential properties.
- Estimate repair costs.
- Make offers.
- Get offers accepted.
- Enter escrow.
- Close on the sale.
- Rehab property.
- List for sale.
Gotta love this site! Good questions with even better answers and direction!