Flipping houses at 18 looking to grow business
Hey im 18 and my name is Shiyear Woodbury. I'm from Grovetown,GA just graduated and I'm looking to have successful career in real estate investing but I need help. I found nice property for 17,500 that's forclosed but my parents are nervous as to if I should get loan at this age but I'm ready and I feel as though this property can sale and feel like there holding my dreams up. The comps run for 65-85 thousand so this could be home run. I need experience and need to change parents mind so need help.
Had the same problem once. First Make sure the house is a good deal in a good area. Needs to be a safe place where they would be comfortable with you living (even though that’s not the plan). Also how much work does the house need? Big things to look for is roof, Plumbing, Electrical and foundation these can turn a 17500 house into a 60K house. Maybe find a friend in construction to tour the house with you and give their opinion. You definitely need a second opinion as both you and your parents will be biased. You will want to do a deal, and they wont want you to.
When I was buying the house i now live in after moving out of my parents house I had the same problem. I told everyone I was going to move into it although I was fully committed to making it a rental. Maybe tell everyone that if all else fails you will live there, this might make them feel better about it.
Finally and most you said the house is in Foreclosure at 17,500 maybe you can get it less. Try a low ball offer and see what they counter with. I got my investment house for 15K when they were asking 21K for it. Hope it works out for you.
#2 General Landlording & Rental Properties Contributor
My advice is if you want to change your parents mind go out and prove yourself. Do not rely on your parents financial support starting out because if you fail you will destroy their lives. If you fail on your own at a young age you have very little worth destroying.
Do not drag your parents into your dream. First become successful and then see if they want to join in.
Step one is securing financing. Probably impossible at your age but it must be done before you can even consider buying.
Originally posted by @Brian Himes:
Had the same problem once. First Make sure the house is a good deal in a good area. Needs to be a safe place where they would be comfortable with you living (even though that’s not the plan). Also how much work does the house need? Big things to look for is roof, Plumbing, Electrical and foundation these can turn a 17500 house into a 60K house. Maybe find a friend in construction to tour the house with you and give their opinion. You definitely need a second opinion as both you and your parents will be biased. You will want to do a deal, and they wont want you to.
When I was buying the house i now live in after moving out of my parents house I had the same problem. I told everyone I was going to move into it although I was fully committed to making it a rental. Maybe tell everyone that if all else fails you will live there, this might make them feel better about it.
Finally and most you said the house is in Foreclosure at 17,500 maybe you can get it less. Try a low ball offer and see what they counter with. I got my investment house for 15K when they were asking 21K for it. Hope it works out for you.
Yeah I have a friend in army with 706 credit so I don't have to rely on parents credit and from looking at the house its just cosmetic needs like paint carpet and maybe a little modern updates but everyone once you start taking things apart there maybe some other damaged underneath but from the look I think 10,000 in repairs would do the job. But that's for advice
Originally posted by @Thomas S.:
My advice is if you want to change your parents mind go out and prove yourself. Do not rely on your parents financial support starting out because if you fail you will destroy their lives. If you fail on your own at a young age you have very little worth destroying.
Do not drag your parents into your dream. First become successful and then see if they want to join in.
Step one is securing financing. Probably impossible at your age but it must be done before you can even consider buying.
Yeah I wasn't gone use my parents money or credit I was going to use hard money and then use bank loan to pay off hard money once its renovated. But thanks for advice also
Your making me a bit nervous on how flippantly you are talking about the numbers on the house. What is your plan to pay for the house and repairs? Have you broke down each number and what it will cost? being this is due dalliance time, try to go in with the attitude of "why should i not buy this house".
I am excited for you that you are wanting to take action and prove to your parents that you are a capable adult. Let that drive you to have the guts to say NO to this deal if it is bad one.
If this one don't work out then keep going anyways! Worst case sanario is you might go 20k into debt. Way better than collage debt cuz you will have learned something epic at 18 and will be able to plow full force into the next one at 19! Keep moving forward.
@Joshua D. I work at IGA I have a little money saved for repairs but if deal doesn't work then I would just live in house until it does. I have partner so hopefully it would go better then being 20k in debt. I went over number though.
10k rehab will get you no where. Paint /carpet is all your doing
@Shiyear Woodbury If this is your first deal I would highly recommend just doing more research on the numbers, and you know what? You probably already know this. Just make sure you know this could be a huge risk and that your partner should also know what the risk could be because your using his credit. At the end of the day if it goes bad, like you said you can live there. Make sure you get to know the area before the purchase and what the houses around it are selling for. Best of luck man and kudos for being so young and having a go getter attitude. Romans 8:25:)
I live in GA....never been to Grovetown, but in my rural area it is completely reasonable to expect $20k in repairs with cheap entry-level finishes on most 1200 sf mid-60's brick ranch homes. I believe you when you say yours needs only $10k, because I've seen it before.
So, worst case, you need a little less than $40k. If you've got some cash saved up, you could easily get the rest from a place like Lending Club, Propser.com or even your local bank with a signature loan. Since you're employed, you should be good to go. Depending on your credit (you're so young, it hasn't had time to build yet), the rate may be horrible, but work that into your numbers and plan for it. Use the calculator on this website to really analyze your numbers.
But, honestly, it sounds like you've done all that so I would go secure your funding and go for it. If you fail, you are young enough to recover. You can't succeed unless you try and failure is how we learn things, so either way its win/win.
My only advice is that time is money. Get in there quick, get it fixed, and list it.
Hello and welcome to BP! Everyone has good advice on this post so for sure look into every detail before jumping in. Also, if you are able to pay for this home you need to conduct an inspection prior to closing. I know a few good home inspectors in the area that could help you. One of those guys invest in real estate as well so you could pick his brain and he'd be able to give you some guidance. Good luck to you!
@Shiyear Woodbury What did your Hard Money Lender tell you about getting a loan on a house that the ARV is around 65K after fix up? Were you able to get inside the foreclosed house and get an inspection done on it? If you think it will take 10K for repairs, plan on up to 15K. Even veteran investors end up spending up to 30% more on rehab costs than planned. Sometimes it is something big that you have to repair that was not planned on, or a contractor will leave you hanging so you have to get another contractor while paying the higher interest on your HML.
Let us know what you end up doing.