Newer to Flips (Need Advice)

Rehabbing & House Flipping
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Newer to Flips (Need Advice)

Annie Frazier
Rental Property Investor · Jackson, MS · Member since 2020 · 2 posts · 0 votes

I have a potential house for a flip. It's in a great location that is growing rapidly. The owner will take a lower cash offer than posted on MLS. However, I am new to flips and am trying to get some feedback.....

The house was built in 1915 and is 3235 square feet. Again, this is in PRIME LOCATION and walking distance to hospitals, dining, and nightlife. I have done a walk through and it basically needs to be completely redone, from wiring,foundation, to plumbing. This house needs the whole nine yards done. Do you think this is too much to take on being newer to flips. This has the possibility to be rented out room by room (up to 6 bedrooms) it doesn’t make sense to flip it and sell it as a whole in this area because it’s 2X bigger than any house in the area.... I’m asking for advice/ strategies.... thanks in advance

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  • Account Closed
    Investor · Mills River, NC · Member since 2019 · 37 posts · 68 votes
    6y

    @Annie Frazier

    It really depends on how comfortable you are with it and how much confidence you have. If you are knowledgeable and have a system in place to see this project through, then go for it. If you feel hesitant or nervous, it might be better to partner with someone that is experienced. That way you can see how it's done and still be able to make a profit by bringing the deal to them. First flips are definitely a challenge, I did mine and made tons of mistakes on my own which could have been avoided with the right knowledge and mentorship. Best of luck to you!

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  • Greg Dickerson
    Developer · Charlottesville, VA · Member since 2018 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @Annie Frazier:

    I have a potential house for a flip. It's in a great location that is growing rapidly. The owner will take a lower cash offer than posted on MLS. However, I am new to flips and am trying to get some feedback.....

    The house was built in 1915 and is 3235 square feet. Again, this is in PRIME LOCATION and walking distance to hospitals, dining, and nightlife. I have done a walk through and it basically needs to be completely redone, from wiring,foundation, to plumbing. This house needs the whole nine yards done. Do you think this is too much to take on being newer to flips. This has the possibility to be rented out room by room (up to 6 bedrooms) it doesn’t make sense to flip it and sell it as a whole in this area because it’s 2X bigger than any house in the area.... I’m asking for advice/ strategies.... thanks in advance

     You can definitely tackle the if you have the right team and an intimate understanding of the market in terms of values and rents if thats your strategy. You need to find a couple of GC's that do this type of work to give you some estimates and time frame. Once you know the costs and time it will take you can run the numbers to determine if the project will work.

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  • Sarah Brown
    Real Estate Agent · Nampa, ID · Member since 2017 · 439 posts · 361 votes
    6y

    What is your experience in constructions and repairs?  Not saying you need to have done them, but if you haven't seen or been around any type of construction project it might make it difficult.  You will need to hire a project manager who has so that they can help guide you along the way.  I wouldn't say it's too big, just make sure you include additional costs where you need to hire out for your lack of experience. 

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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    6y

    3235 square feet is definitely too big to start on. Even if you know some things, the bids for repairs are going to be far higher than expected and even if there is a cash deal to be made it doesn't sounds like it's a deep discount. What is the price point, the expected repair budget (and has this been verified by a reputable GC), and the ARV? Everyone says go for it, but your first flip should really be 1500 square feet or under to lower your risk expectancy. If this needs a wall-to-wall gut, it's a project that will often sink first-time flippers if they don't have established provider relationships and fully vetted contacts.

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  • Jenny Roman
    Lender · Member since 2020 · 89 posts · 69 votes
    6y

    @Annie Frazier Hi Annie, As a lender I want to help you build a long term portfolio and become your go to lender vested in your success ! However, due to the lack of experience you will be getting a higher rate and perhaps overpay fees and costs. Get that initial project at the minimal purchase possible and have at lease 1.5 - 2times over your initial deposit for the unexpected. It is a learning experience regardless and mistakes will be made but you will learn. let me know if I can help. Good Luck!

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