Flipping in real life or just hgtv?

Question

Help! My husband and I are really motivated to flip houses. We have no experience. Is it possible to flip with "someone else's money?" We can't go the traditional bank lending route but we don't have enough cash to do cash only flips. Hard money loans look to be very risky. Any recommendations on how to get started? Also, I'm looking into getting a real estate license to use mainly for msl access and buying/selling flips. Does this work in real life or just on hgtv?

Anthony Dooley · Answer

I recommend saving up your own money to invest in real estate. If you can't afford to lose it, don't do it. If you borrow money and screw up the deal, you still owe somebody some money.  Have you ever loaned a friend or a relative some money and they didn't pay it back?  If so, you probably don't talk to them much anymore.

This may be hard to believe, but not everything on reality TV is reality.

Patrice Boenzi · Answer

@Sally Red flipping is fun, stressful, risky, and you need to know what you are doing or you can "loose the house" so to speak. Now, I said all that to say if it is your desire then invest in yourself first! Educate yourself by reading, listening to podcasts, take webinars and BP is a great place to start doing that. You need a plan (short and long term goal) so you know where you are going and to help you stay focused because there are many ways to invest in real estate. You need to know your investing personality, risk levels and if someone else is involved (like a spouse) you are on the same page.

I am a Realtor and investor, but was an investor first. I loved it so I want to help others learn and reach their investing goals too. I became a Realtor because I was tired of waiting for an agent to get back to me and lost too many deals. We flip for capital to buy and hold!

Back to you... take your time and invest in yourself, get your finances in order, build a team - you can't flip without a team. Do you want to live in your flips? Are you handy?

I would suggest what @Percy N. said - try to shadow someone and bring value. PM if you have any questions - I love this stuff!

Good Luck!

Will Barnard · Answer

This could be good advice or bad advice depending on YOU. Flipping is not easy and a lot of mistakes can and likely will be made on your first, and even your 10th so placing your family's or friend's money at risk and losing some of it could do some major harm. Keep that in mind first and foremost. Now that said, my first and several deals after were all done with private funding from family and people in my circle, however, I already had some training, and was self employed for over a decade before I did this so I was not exactly new to business, just new to real estate.

Getting your license is a great idea and advantage, so I would recommend that and I would also recommend learning as much as you can of ALL aspects of a flip before you put your money or more importantly, thatbof your family and friends at risk. You should know all the costs associated with a purchase and sale, rehab numbers, and his to manage the rehab. You also need to know a lot about lending including proper and safe loan to values, contracts, deeds of trust, etc. having this knowledge will help you keep your investor's money safer.

While this may or may not be right for you, you may want to think about doing a hard money loan on your first deal with a REPUTABLE hard money lender as they will only lend on a safe deal and somewhat be your second set of eyes on your deal. If they turn you down , you know the deal was not a good one and can learn from that for the next offer.

Jonathan Safa · Answer

Sally,

I had many of the same questions that you have. First, the best way to get started in this is to not go through Hard Money, you're right, but to get private funding from family members and friends who are rooting for you in this experience. Also, I feel that there is more incentive to do well when you are dealing with a friends' finances, versus someone you've never met before.

Getting the license definitely has its benefits. I have always enjoyed making offers off MLS, and grew very tired of having to wait on a realtor to make one offer every few days (if I was lucky). Now I'm pumping out ten offers a day on my own - as a licensed realtor. I think it will certainly pay for itself within the next few months. If you don't go that route, try to find an investor-friendly realtor. But let them know that you mean business and are ready to close a deal if you come across a good one.

Jonathan

Flipping in real life or just hgtv?

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