How long did you wait?

Question

How long did you wait before you did you first purchases on a rehab? how long did you study and learn about it before you took the hit and went for it?

James Vermillion · Answer

Knowing when to start investing is somewhat difficult and must include a balance.  You will never know everything or feel completely comfortable going into your first rehab, and trying to will cause you to never get started.  However, there is definitely a such thing as knowing too little...which can lead to a very difficult start.

We were similar to JScott in that we focused on education and planning for approx 12 months before we decided to put the plan in motion.  During that year though we were making contacts (contractors, lenders, accountants), lining up financing, and other things in anticipation for making our first deal, so its not as if we were just reading books for a year.

John Evan Miller · Answer

Is it time for you to invest?  See if you can answer these questions:

What are your investment goals? Are you looking to hold and rent? Or buy, remodel and flip? How active is your market? Is there high demand for rentals?

How will you pay for it? If you need a mortgage, do you have a down payment? If you have a down payment, have you gotten pre-approved? This will tell you how much you can borrow/spend on a property.

Do you have renovation skills or will you hire it out? If you are a handyman, then your confidence level can be higher and your risk is a little lower.  If not, make sure you find a skilled, licensed contractor to go through a potential property.  You may also want to get a home inspection before purchase. Write that into the PA, so if they find a big problem, you can get out of the PA.

Knowing the answers to these questions, will help gauge how ready you are to invest.

J Scott · Answer

About a year reading, studying and putting together a plan, and then about 6 months to completely throw out my plan, start looking at houses and find something I thought would make a good deal.

So, about 1.5 years in total, though only 6 months was actually looking for deals.

Mike Nelson · Answer

I started of wholesaling first, I built up great relationships with my local buyers and now they are walking me through the rehab process. I'm not sure where you are in your learning phase but I say find someone who's doing it and follow in their steps.

Darrell Essex · Answer

That sounds like great advice @Sam Craven, whenever I watch those flipping shows on TV they always want to estimate cheap and accomplish the job in like minutes, why don't they estimate high and try to finish the job in something more realistic.  When I get to the point where I can afford to take on some rehabbs I am definately going to estimate like 20k extra budget for incidentals like a crack in the foundation, unseen termites or like I just saw on a show the other day, a new septic system because the old one is completely under the deck lol.  Then estimate like 2 months not 2 weeks so I know the works done correctly, and not sitting there slave mastering a bunch of guys to finish a job just to be going 2 weeks over estimated anyway.  Thats just me though and what makes sense to me.

Will Browm · Answer

2 months.  I knew that I would make a few mistakes but went for it.

Bella Anderson · Answer

i agreed with @ glenn

Glenn Espinosa · Answer

1 month before I took the jump. Im a poker player and am not adverse to risk. I did good on my first rehab but I would not advise jumping in that quick.

It really depends on when you feel confident about your numbers, the process, and your finances.

It really helps when you overestimate rehab, underestimate ARV, and still come out on the green side.

Also, when the right deal comes along, don't twiddle your thumbs is all I can say. In this market another investor will be there within minutes and you better believe that.

Sam Craven · Answer

6mo casually as i got my professional life in order where i was saving 50% of my take home pay and read a few books.

And another 6 mo head first where i read books constantly and this forum non stop as well as networked at any RE event i could make it to.

Formed the LLC 5mo ago and have done one wholesale, in the middle of rehabbing 2 and have 2 more under contract that will close in the next 2 weeks.

I think you can move faster than I did but being fresh out of school and being recruited away from my first job into the industry i really wanted slowed me down a bit.

How long did you wait?

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