Fix and fliping for newbies

13 Replies

When fixing and flipping, what should you put down for payment 30% or do you do 100%...

I have analysed a few flips in Las Vegas where I live and not sure if you should put 100% down or should you do like rentals and put 25 to 30%.

After watching HDTV show it looks like they put 100% down on their fixing clips in by the properties at there asking price

@Jordan Autrey it all depends on your goals and your cash position. 

For flips some people pay cash and use their own funds others put as little down as possible and borrow as much as they can. 

For rentals the same applies. 

@Greg Dickerson that makes complete sense.. truly I’m in no stage to put up capital for down payments anymore being i have a Orbisor which we talked about my travel start up taken the savings i did have and we don’t launch till September so no capital from that to until after September.

So I’m looking to be very creative and share profits with partners with the capital and any-connections to help me build BlckOak.com into a true ibuying real estate platform.

So my plan and goals are aligned and now i need a team/partners to complete the business model, which is was i wanted to talk to you about yesterday but life got busy.

@Jordan Autrey  

I would not recommend flipping or using hard money to flip if you’re just starting out and have limited funds. Hard money Is very expensive, you will need a down payment if you’re just starting out and you need reserves to pay for your mistakes and cost overruns. Also the interest carry will eat your profits fast especially if you struggle to get the project done and sold quickly

The best way to get started in REI is by wholesaling. Once you have done several deals and have at least $100k set aside then you could try a flip. For now focus on getting really good at finding buyers and good deals.

First step is to educate yourself on the business and your market.You really need to immerse yourself and learn all you can. Attend REI groups and meetups and network with other experienced investors.

Start with finding cash buyers.You will learn a ton from them and as you build a relationship they can potentially become a private lender or even partner with you on some deals down the road.

Best way to find cash buyers is networking at local REI meetups, masterminds, Facebook groups etc,

Also Realtors, title companies and closing attorneys, property management companies, auctions, Craigslist.

You can search real estate transactions in your tax database. Look for entities and individuals that have bought multiple properties. You may need to search by the address of the buyer as they may change their name or the name of the entity on each purchase.

You can also buy lists from companies like list source

Originally posted by @Greg Dickerson :

@Jordan Autrey  

I would not recommend flipping or using hard money to flip if you’re just starting out and have limited funds. Hard money Is very expensive, you will need a down payment if you’re just starting out and you need reserves to pay for your mistakes and cost overruns. Also the interest carry will eat your profits fast especially if you struggle to get the project done and sold quickly

The best way to get started in REI is by wholesaling. Once you have done several deals and have at least $100k set aside then you could try a flip. For now focus on getting really good at finding buyers and good deals.

First step is to educate yourself on the business and your market.You really need to immerse yourself and learn all you can. Attend REI groups and meetups and network with other experienced investors.

Start with finding cash buyers.You will learn a ton from them and as you build a relationship they can potentially become a private lender or even partner with you on some deals down the road.

Best way to find cash buyers is networking at local REI meetups, masterminds, Facebook groups etc,

Also Realtors, title companies and closing attorneys, property management companies, auctions, Craigslist.

You can search real estate transactions in your tax database. Look for entities and individuals that have bought multiple properties. You may need to search by the address of the buyer as they may change their name or the name of the entity on each purchase.

You can also buy lists from companies like list source

 It's funny Greg, I have the completely opposite mentality. I actually got started by using 10% down hard money loans and worked my way into private money. I learned a lot on the first few flips and how to calculate costs properly. 

I definitely think wholesaling is a much more advanced strategy than many advertise it to be. It requires a full understanding of the scope of the deal as well as seller negotiation and marketing. Yes, the financial barriers are lower and it's a great way to fuel your business, but it's not easy. 

Originally posted by @Kevin M Finley :
Originally posted by @Greg Dickerson:

@Jordan Autrey  

I would not recommend flipping or using hard money to flip if you’re just starting out and have limited funds. Hard money Is very expensive, you will need a down payment if you’re just starting out and you need reserves to pay for your mistakes and cost overruns. Also the interest carry will eat your profits fast especially if you struggle to get the project done and sold quickly

The best way to get started in REI is by wholesaling. Once you have done several deals and have at least $100k set aside then you could try a flip. For now focus on getting really good at finding buyers and good deals.

First step is to educate yourself on the business and your market.You really need to immerse yourself and learn all you can. Attend REI groups and meetups and network with other experienced investors.

Start with finding cash buyers.You will learn a ton from them and as you build a relationship they can potentially become a private lender or even partner with you on some deals down the road.

Best way to find cash buyers is networking at local REI meetups, masterminds, Facebook groups etc,

Also Realtors, title companies and closing attorneys, property management companies, auctions, Craigslist.

You can search real estate transactions in your tax database. Look for entities and individuals that have bought multiple properties. You may need to search by the address of the buyer as they may change their name or the name of the entity on each purchase.

You can also buy lists from companies like list source

 It's funny Greg, I have the completely opposite mentality. I actually got started by using 10% down hard money loans and worked my way into private money. I learned a lot on the first few flips and how to calculate costs properly. 

I definitely think wholesaling is a much more advanced strategy than many advertise it to be. It requires a full understanding of the scope of the deal as well as seller negotiation and marketing. Yes, the financial barriers are lower and it's a great way to fuel your business, but it's not easy. 

Sounds like you’ve done well. You are definitely an exception as most people even experienced wholesalers struggle with flips. Some of the top rehabbers I know are switching to wholesale due the the difficulty and issues with contractors.


Sounds like you’ve done well. You are definitely an exception as most people even experienced wholesalers struggle with flips. Some of the top rehabbers I know are switching to wholesale due the the difficulty and issues with contractors.

It's tough for me to point at what the best strategy to get started is because they all require experience...

The wolesaling issue usually lies in the top-backward nature of our business. It's not much for a wholesaler to determine an ARV, but putting together renovation budgets is tough to do without having actually done a renovation before. Then on the negotiating side they offer more than a flipper is willing to pay, leaving them out $1000 earnest and a bad taste in their mouth.


Sometimes first timers miss awesomely too. I bought one last year that was presented as: $72k purchase. $15k renovation. $110k ARV.

Actual numbers? $72k purchase, $83k renovation, $225k sell.  

@Kevin M Finley @Greg Dickerson

You both make great points and these are reasons why its hard to say which would be better for ME and what I’m great at.

Wholesale sounds like it can be simple but sounds to blah being money doesn’t excited me like being able to say, hey i did that like i can with fix and flip.

Neither i feel will be something i cant achieve my goals from but only one feels like ill love waking up doing it everyday.

@Jordan Autrey , understand that I am more conservative than most, but I think taking on your first flip is risky enough, as Greg mentions. Compounding that risk with hard money lending can very quickly lead to losses, and it sounds like you have enough going on that you cannot sustain a loss. 

I started with cash, and made sure I had more than enough of it.  You will think you are being conservative and then blow through your whole reserve and then some.  And remember, lenders are not giving non-recourse loans.  If you run out of cash, you very well could lose the property, and the lender can sue you for any balance left on the loan after a sale.