Good evening everyone,
Small time real estate investor from Ct here, my buddy and I are beginning to educate ourselves on doing our first flip. What’s your most recommended book? We both own a couple 3 family houses, but want to try our hand at flipping to gain wealth and begin scaling at a slightly quicker level.
I’m a big fan of J Scott’s book here on BP
I like Flip: How to Find, Fix, and Sell House for Profit by Rick Villani and Clay Davis. Very helpful.
@Benjamin Lemieux J Scott also has a book on estimating rehab costs here on BP that is very helpful when you are getting started flipping houses.
Best of luck to you as you get started and if you need someone to fill in the gaps for you here locally let me know.
I liked Find it, Fix it, Flip it by Michael Corbett
The books mentioned here are good resources and definitely skim through them, but some things I like to keep in mind are:
One - as an agent I have MLS access so it's always nice to find properties that look like flips on the MLS (ideally recently sold) then look back and see what they bought the property for. It only gives you a rough idea of how the deal actually went, but I really like seeing what other flippers are buying for and what the ARV is on flips in my area. Like I said this is just a glimpse into nearby deals but I find it to be very valuable to know this. If you have this opportunity really just spend a lot of time getting familiar with flip numbers in your market, including seeing the agents selling them and potentially who is actually doing the flip. All good stuff to know.
Two - Kind of goes hand and hand with one. Just really study your market. Even if it's only through zillow there is good information and even if you learn nothing else, if you are looking to buy a 3 bed/ 2 bath 1,200 sq/ft house and you have studied your market enough to know the ARV for updated 3/2 - 1,200 sq/ft homes is between 160-185k depending upon the finishes.. this is again extremely valuable. If you know the ARV's in your market thats basically the most important number to know. Then you can practice working backwards to figure out what you want to pay.
Three - "The first principle is that you must not fool yourself, and you are the easiest person to fool." - Richard P Feynman... I think of this quote daily and especially when evaluating houses. It's easy to think "I can rehab that for like 25k and it'll sell for 250k" When the truth is the rehab will run more like 34k and the ARV is maybe 215k if you're lucky..
The point is, especially starting out, give yourself some room. Practice evaluating houses and to start add 15% to your estimated repairs.
You EST 35k for repairs. ($35k*.15%= $5,250)
(So $35k + $5,250 = New Est repairs of $40,250)
And subtract 6% to your Estimated ARV. Your estimate = $240k.
($240k *.06%= $14,400)
($240k - $14,400= New ARV = $225,600)
This is a super rough practice, and once you do more house you will know your actual percentages, maybe you avg being just 7% under on repairs and 2% over for ARV so you can adjust.
But starting off, I think this practice is helpful to greatly reduce your chances of getting crushed with unexpected repairs, and selling well below the ARV you expected.
If you're still awake.. lol I hope this helped.
thank you all very much for the book suggestions!
Ryan, your info was also very helpful. I will absolutely do that. Appreciate you taking the time go give such a detailed response!
Whatsthe name of the book by J Scott please anyone?
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing