HOW TO FLIP HOUSES WITH NO MONEY

Longview, TX · Member since 2017 · 15 posts · 4 votes

I have been talking with a few mentors and keep getting told different things, go figure! My beginning strategy was to wholesale houses until I built enough capital to do some buy and holds or buy and flip/rehab. I quickly found that to be a successful wholesaler you need quite a bit of money for continuous marketing as well as knowledge in repair cost etc. My question is how does one get into flipping houses with little startup money? Just go hard money lender and private lender to cover rehab costs? Or are there more options? Any advice would be helpful! Happy Investing.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

well at least you realized that its not possible with NO money.

if you have no personal funds to do this you need to partner with a money partner.

if you are too inexperienced to attract a money partner..

then you may want to get your RE license and go to work on a top producer team and get paid to learn.

Or you may want to get a JOB with a big flipping or building company to learn that end and create and save your dollars so you can become an investor...

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
well at least you realized that its not possible with NO money.
if you have no personal funds to do this you need to partner with a money partner.
if you are too inexperienced to attract a money partner..
then you may want to get your RE license and go to work on a top producer team and get paid to learn.
Or you may want to get a JOB with a big flipping or building company to learn that end and create and save your dollars so you can become an investor...
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Ty Murray
Graham, NC · Member since 2015 · 23 posts · 7 votes
9y
That No or little money narrative is just for people who don't know any better. You need money to do this, either yours or someone else's.
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Charles Trussell
OP
Longview, TX · Member since 2017 · 15 posts · 4 votes
9y
@Jay Hinrichs Thanks for the advice I will definitely be partnering with another investor that I have "bird dogged" deals for. I was just curious as to a few different creative strategies.undefined
2 Reply
Charles Trussell
OP
Longview, TX · Member since 2017 · 15 posts · 4 votes
9y
@Ty Murray Very true man i appreciate the response will probably go the hard money and private lender route along with my money.
0 Reply
Rebecca Belnap
Rental Property Investor · Lehi, UT · Member since 2015 · 195 posts · 133 votes
9y
A good place to start is with your own home. If you don't own a house, start with a no money down program and buy something that can allow you to add equity by fixing it up. You stay in it for "more than half a year" and then you can stay in it longer and get a HELOC, sell it for a profit, or rent it. It doesn't hurt to get your real estate license like @Jay Hinrichs said so profit isn't all eaten up in costs.
If you already have a home and don't want to move, do some affordable improvements to maximize the value and get a HELOC. To really flip homes effectively, you need 20% down and repair costs of the home. Partners can work for this, but if you aren't careful, partners and Hard money lenders earn most of it and you would earn more if you were working for McDonalds. When you are cash poor, you have to pass on a lot of good deals in your search for the GREAT deal.
1 Reply
Anthony Dadlani
Investor · New York City, NY · Member since 2013 · 1k+ posts · 269 votes
9y
Charles
Yes develop a relationship with a lender. There is such a thing as using other peoples money to get started.
Best of luck in all your endeavors
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Charles Trussell
OP
Longview, TX · Member since 2017 · 15 posts · 4 votes
9y
@Anthony Dadlani Thanks man i appreciate the response I know it can be done because that's how one of my mentors got started flipping houses using "OPM".undefined
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Doug W.
Flipper/Rehabber · Alexandria, VA · Member since 2014 · 461 posts · 262 votes
9y
@Charles Trussell
If you cannot estimate repairs in a wholesaling scenario how are you going to estimate repairs when you own the property and are flipping it? Think about it. You have all of the risk when you are flipping vs. little or none when you wholesale.
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Charles Trussell
OP
Longview, TX · Member since 2017 · 15 posts · 4 votes
9y
Doug W. That's true you are taking more risk flipping but you are also getting first hand experience working with General contractors to learn repair costs.
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Thomas C. Barrage
Cranberry Twp, PA · Member since 2016 · 27 posts · 6 votes
9y
Charles,
You may want to look into a new website "HouseFlipCapital.com." You may have to use Google to find it because it is still being worked into the other search engines. The website has a very inexpensive House Flipper ($100.00/year) membership. I believe that the more house flippers that sign up the better, because that will draw in investors and wholesalers where the house flippers are located. You may be able to find other people in your area who are also new to the industry. If you all work together, you may start business relationships that move all of you forward. You may just find the relationships you need to start flipping much sooner that you thought possible.
Best wishes,
Tom Barrage
House Flip Capital, LLC
1 Reply
Andrew David Evans
Atlanta, GA · Member since 2016 · 44 posts · 9 votes
9y
As apposed to the common answer of going to a hard money lender, you could also network an try to find someone that can go in on the deal with you. If you do not have the funds to go 50/50, maybe you could work out a private loan situation in which you could do more of the work in return for a greater private loan. A hard money loan is a great way for anyone with limited capital to get involved however hard money is very expensive. Keep us updated on what you decide, good luck!
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Jason Hirko
Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
9y
Originally posted by @Andrew David Evans:

As apposed to the common answer of going to a hard money lender, you could also network an try to find someone that can go in on the deal with you. If you do not have the funds to go 50/50, maybe you could work out a private loan situation in which you could do more of the work in return for a greater private loan. A hard money loan is a great way for anyone with limited capital to get involved however hard money is very expensive. Keep us updated on what you decide, good luck!
Hopefully this isn't the common answer... No HML that plans to be in business tomorrow will give a loan to someone with no money and no experience.
Best thing to do is find/develop a way that you add value to experienced investors, and find people who will let you work with them while you gain experience, then find someone willing to partner on a deal. So many people skip the first step.
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Andrew David Evans
Atlanta, GA · Member since 2016 · 44 posts · 9 votes
9y
@Jason Hirko So obviously there is no such thins as "no money" investing, would you recommend going to hard money route vs. trying to partner and find a more private money source to avoid paying extra for money? I completely agree with the idea of adding value in exchange for first hand experience much before attempting to find money for purchasing a property. So after that first step what is the best way to go in with "low money" down?
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Jason Hirko do hard money will give a newbie a loan.. they just have to pay 3k up front and 800 per submission.. and hope and prey they actually find a deal that meets these peoples lending requirements..
many on BP that post about this company talk of losing 5k then finally giving up.. nice gig for the company... but there was a few that said they actually got funded.
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Elbert D.
Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
9y
There is no way to do almost anything in real estate. Wholesaling and flips both require you to put up some type of money. Even with hard money you still have to put something up. Or you can partner with a mentor and he will put the funds up and maybe have a buyer as well and you do the rest of the work such as analysis or helping clean up or whatever else is needed. So if you don't have money. Your going have to have the time to atleast become an asset to somebody and do some type of work. But be careful there are so many people that get in real estate to and become greedy or scam you. It also depends on your market. Because IMO flips are very hard. But things that are worth doing doing require patience so find your niche and good luck!
1 Reply
Jason Hirko
Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
9y
@Jay Hinrichs I guess if you fund one once in a while, you can claim you aren't running a scam?!
2 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
@Jason Hirko I think that is an accurate statement.. did you ever catch Remington financial on American greed... ( not comparing DHM to them of course)
they had offices in PHX I think then maybe Minneapolis I remember talking to them years ago on a deal and they just approved me to easily I thought.. something were folks with experience would question it.. but those starting out or really really want it and have blinders on would not.
scam went like this.. OK send us docs we will give it a free look.. 3 days later free look is over send us 10k for in depth due diligence.. then string borrower along until they go away.
Some lady was trying to develop a parcel in Clear Lake CA.. ( I happen to have first hand knowledge of this as I am from there) that parcel could never be developed.. they led her on and she lost her EM deposit her 10k to these guys and her dream.. she went ballistic and some how got a retired FBI agent to help her.
bottom line 25 years in business they could only document 3 loans that Remington had actually done and they brought in over 40 million dollars over those years..
so now were just bereft with the little time scammer.. the guy who pops on BP with a phoney company and promises private lenders at 3 % 100% ltv the newbies and beginners on BP think they hit the jack pot only to get scammed out of 500 to 1000 bucks before they too realize its a fake.
One guy posted HEY I NEED DEALS I just got approved for 20 million... LOL in looking at his background never did a deal.. of course he was connned
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Tom S.
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
9y
@Charles Trussell I started off with little startup money. Found a partner willing to put up the downpayment and closing costs, and I put the loan in my name. We split everything 50/50 after. Fairly straight forward and worked fine for us.
Good luck!
- Tom
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Charles Trussell
OP
Longview, TX · Member since 2017 · 15 posts · 4 votes
9y
Tom S. Thanks man that's really the approach I'm hoping to take! I will continue going to my local REI meetings and networking to hopefully find a suitable partner
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