First time flipper, where to start?

Question

Hello! I'm Chantel. I live in Bozeman, MT. I am planning to relocate to Seattle area in 2019, but I would like to get a house or two under by belt before the move. I've pondered flipping for years. It's always been in the back of my mind. I'm tired of working for other people and not being respected. I've put off starting my flipping career because I had the doubt that I just don't have the money or the credit. I've done a TON of research. I've read books, blogs, articles, watched videos, networked with a few brokers in my area, attended seminars/webinars, and even found a property I may be interested in. I even  have a potential buyer. My question is, where do I start? I've seen all the hype about hard money lenders, and I'm hoping I can go in that direction, because as I previously stated, I just don't have it out of pocket. Is it realistic for someone with little money, and rough credit to go that route? I almost wish that I could find someone to help me walk through the first flip with of course, split compensation. Is that realistic? Any advice is welcome. Thanks in advance!

Account Closed · Answer

@Chantel Haywood start by reading J scott's books, they are on amazon. A typical HML will ask for 15-20 % of totalk project costs to fund a deal with a minimum of 15,000-20,000 plus 6 month of payments in your bank as cash reserves. So on a 110,000 project (purchase + rehab), you'll be looking at the 25K-30K range. There are HML out there lending to newbies but they will require you to bring a great deal or they won't fund it. Another option would be to bring a seasoned investor to partner on a deal with you. HML generally don't care about your credit since they are asset based lenders.

Rory Egelus · Answer

Hi Chantel, I'm also in Bozeman and am working on my third flip right now in Three Forks.  I'd be happy to help give you some direction and potentially look at a win-win deal if you already have a property in mind.  Feel free to PM me if you're interested in discussing further.

Patrick Britton · Answer

@Chantel Haywood  All the books in the world don't compare to the reality of flipping.  Just ask anyone who has actually flipped a house.

Seattle is a white hot market so if you don't have money, you can't participate, let alone compete.  And no one in their right mind will bother helping someone new, unless that person brings a lot to the table, like a genuinely fantastic deal.  It's now a market solely for the fully capitalized, liquid, experienced investors with GCs and subs at the ready.  Newbies do not stand a chance.

Anthony Dooley · Answer

@Chantel Haywood the best place to start is to find a great deal. This is what you would bring to the table. An experienced flipper or hard money lender, would bring their knowledge to the table and together you could all make a few bucks. You either need a deal, money, or knowledge. Once you have all three you will be set, but in the meantime, a deal is what you need.

Billy Daniel · Answer

I am in the middle of my first rehab and can give you my experience.

First of all, I am married to a realtor, so I have a bit of an inside scoop on the market.  That being said, all you have to do is call one and they can give you the same information I would discuss over dinner.  Don't be afraid to ask the realtor if they have ever flipped a house or worked with a house flipper.  They will help you find what you are looking for.

The next thing to do is find the money.  For me, the best way is to go to a local or regional bank or credit union who offers an in-house loan.  This means they do not sale your loan to another bank/investor.  They are able to be a little more lenient this way.  I was able to get a loan up to 80% of the after repair value.  The down payment required was "Just something to show you have skin in the game."  They never gave me a percentage or dollar amount they wanted me to pay.  I think i ended up paying around 10%, but could've gotten away with less.

Hope this helps!  Also, start shopping for contractors on the day you have an accepted offer!  They can be hard to reach!

First time flipper, where to start?

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