First flip under contract

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
6y
Originally posted by @Mark Cruse:

Well if you see it that way good luck. I was trying to get a grasp of the situation and provide you with an idea of what you are up against. When you put anything out in any social media it may not be 100 percent of what you may want to hear every time. I won't provide any further insight or guidance unless you request  aside from advising you to get with one of the Baltimore REIAs when you get here. Great resources and people with tons of experience. 

 I end up listing a flip or two per year from novice investors that get in over their head in Baltimore. MoCo, PG, DC, Anne Arundel are much more fogiving, and like youve alluded to, Baltimore will eat novices alive.  Take a PG County property.....you can sell a PG County property no matter what, you just have to find the right price and it will move. Baltimore, thats just not the case. It can be the right price and take over 6 months to move still while that hard money is hanging over someones head. I always get tempted by Baltimore, but always come back to reality, stay in DC and its suburbs, its 1000 times less riskier than Baltimore. 

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  • Sam Lewis
    Real Estate Agent · Baltimore, MD · Member since 2018 · 283 posts · 228 votes
    6y
    Originally posted by @Lamar Wint:

    The flip is in Baltimore. I’m still looking for a contractor and I could use some advice on navigating the entire process smoothly.

    Congrats on your purchase - do you have any network here in Baltimore? 

    That would be a great start for reliable contractors who have a vested interest in your network.

    0Reply
  • Lamar Wint
    OP
    Los Angeles, CA · Member since 2020 · 21 posts · 8 votes
    6y

    @Sam Lewis Thanks for your reply. Not really, I was hoping maybe someone here might be able to help with that, and/or mentor me throughout the process.

    1Reply
  • Sam Lewis
    Real Estate Agent · Baltimore, MD · Member since 2018 · 283 posts · 228 votes
    6y
    Originally posted by @Lamar Wint:

    @Sam Lewis Thanks for your reply. Not really, I was hoping maybe someone here might be able to help with that, and/or mentor me throughout the process.

    Be really careful man. Being both new to investing and an out of state investor makes you susceptible to gurus who will try to sell you their ‘expertise’

    That being said with no network in MD, BiggerPockets is a good place to start. The best way to go about not getting overcharged for rehab costs is to interview contractors and make sure you get separate bids from each one of them (minimum 3). 

    Make sure they aren’t under the impression that this is your first rodeo or they will try to sell you some expensive boots.

    3Reply
  • Lamar Wint
    OP
    Los Angeles, CA · Member since 2020 · 21 posts · 8 votes
    6y

    This is great advice, yea I’ve received 3 bids so far and I’m new so I’m not sure, but they seem very pricey. I think I have been too honest about my experience. I’ll definitely take that into consideration moving forward. Have you completed flips before?

    1Reply
  • Sam Lewis
    Real Estate Agent · Baltimore, MD · Member since 2018 · 283 posts · 228 votes
    6y
    Originally posted by @Lamar Wint:

    This is great advice, yea I’ve received 3 bids so far and I’m new so I’m not sure, but they seem very pricey. I think I have been too honest about my experience. I’ll definitely take that into consideration moving forward. Have you completed flips before?

    Yes seriously, less is more IMHO - I honestly wouldn't even tell them you live in California. All they need to know is that you won't be available to meet in person and what the lockbox code is. 

    Have the confidence in your voice as if this is your 50th transaction. To do this, have a 'practice' conversation with a friend or family member as if they were a contractor. End your sentences with downward inflection, rather than upward inflection.

    I do not specialize in flips, I do rent-ready buy and holds in Baltimore County. Hopefully some other folks can add to this chain, but I will keep you in mind with contractors. I have a few on the top of my head but I don't know the scope of work. 

    1Reply
  • Joseph Bangali
    New to Real Estate · Upper Marlboro, MD · Member since 2019 · 12 posts · 6 votes
    6y

    @Lamar Wint find someone in California that you can shadow on a couple of flips so that you can have a better idea of how it is supposed to go. And use that knowledge and experience when talking to your contractors in Baltimore. Obviously, the numbers will be different, but the experience will be somewhat the same. Also, start networking with any friends, families, investors in the Baltimore area in hopes of getting a referral. When it comes to contractors I believe referrals are a great way to go. 

    3Reply
  • Darius Ogloza
    Investor · Marin County California · Member since 2018 · 1k+ posts · 2k+ votes
    6y

    It would help a lot if you had friends and/or family in Baltimore who could help look out for your investment.  I agree totally with Joseph Bangali.  Actually watching a flip happen is the very best training.

    1Reply
  • Lamar Wint
    OP
    Los Angeles, CA · Member since 2020 · 21 posts · 8 votes
    6y

    @Joseph Bangali That’s great advice thank you, the only thing is I’m under a bit of a time constraint. My closing date is in a couple of weeks and I think I should head our to Baltimore soon. I don’t know anyone who lives in Maryland, so I was hoping someone here my be able to give me a referral or something of the sort.

    0Reply
  • Lamar Wint
    OP
    Los Angeles, CA · Member since 2020 · 21 posts · 8 votes
    6y

    @Darius Ogloza Yes that definitely seems to be a helpful solution. I’m going to see if I can link up with some flippers once I get to Baltimore.

    0Reply
  • Alan C.
    Investor · Baltimore, MD · Member since 2015 · 155 posts · 166 votes
    6y

    I think you have your work cut out for you. Doing your first flip and visiting the job site several times a week is hard enough, but you've multiplied your problems by doing this from 3,000 miles away.

    I'm also concerned that you did not have a good/realistic idea of the rehab costs before you made your offer and committed to buying the property. This is a good way to lose money.

    So first, I have to ask why Baltimore? Was it the fact that the houses looked cheap compared to CA prices or were there other reasons.

    As other posters have said, you will need to be firm when dealing with contractors and if they sense you being a newbie.

    I hate being harsh on all the points above, but I also hate to see people lose money on their first project and then think that real estate investing doesn't work. 

    That being said, feel free to contact me. I'm a Baltimore native and full-time wholesaler.

    1Reply
  • Lamar Wint
    OP
    Los Angeles, CA · Member since 2020 · 21 posts · 8 votes
    6y

    @Alan C. No problem, I appreciate the candor. I mentioned above I’ll most likely be relocating to Baltimore very soon. I made this post mostly because I thought maybe someone could connect me to their network, and recommend a reliable investor friendly contractor in the area. It is true that I underestimated rehab costs, however I can still do well if the project is executed properly. To your other question, yes I chose Baltimore based on lower cost and feasibility of acquisition.

    0Reply
  • Beth H.
    Real Estate Investor · Catonsville, MD · Member since 2016 · 90 posts · 49 votes
    6y

    Baltimore is a tough place to invest from long distance. A couple of years ago I met 2 women from Denver who were rehabbing a property in Baltimore and they were flying in every Thursday to check on the property. They still ended up losing money because they paid too much, didn't know the market, and the rehab cost more than their budget. I have flipped over 100 properties in the past 20 years with the majority being in the city. I have had the same crew for the last 10 years or I would not have been able to manage as well. First thing you need to do is make sure the property is really a fix and flip candidate. Go to sdat and see how many homeowners are on that street and block. I made that mistake on my first deal when I was living in VA and didnt know the market. I still own the property as a rental. Best wishes.

    1Reply
  • Lamar Wint
    OP
    Los Angeles, CA · Member since 2020 · 21 posts · 8 votes
    6y

    @Beth H. Thanks for your insight, it seems you have a lot of experience in the field. Congrats on your success! Yes I decided initially that I would need to relocate to Baltimore for the duration of the flip in order to properly manage the job. Based on the numbers, my research and the ppl I’ve consulted with, it’s a good deal. I’ve already committed to the project and I’m seeking advice moving forward. Contractor recommendations, budgeting tips, dos and don’ts, mentorship, etc...

    0Reply
  • Beth H.
    Real Estate Investor · Catonsville, MD · Member since 2016 · 90 posts · 49 votes
    6y

    @Lamar Wint. Most of the reasonable and good contractors are booked months in advance.  My crew only works for me and are busy with 3 projects right now.  Best bet is to check the MHIC website to make sure they are licensed, check judiciary case search to make sure they are not being sued.  Make sure they pull permits for everything, get copies of permits. Verify inspections have passed before you pay for it. I am hoping you are using a local lender who can give you some guidance.  Above all do not give them too much money upfront.

    0Reply
  • Lamar Wint
    OP
    Los Angeles, CA · Member since 2020 · 21 posts · 8 votes
    6y

    @Beth H. This is awesome, thank you. Yes I am using a local lender who’s provided me with great insight as well. That makes sense as to why I’ve been having difficulty in the contractor search. The good ones probably are not returning my calls. I’ve had 3 bids completed so far but I’m not confident in their abilities yet, so I want to continue searching. I’ll definitely verify their licenses on the MHIC, thanks for that. 

    0Reply
  • Micah Haworth
    Rental Property Investor · Des Moines, IA · Member since 2020 · 56 posts · 36 votes
    6y

    I recently watched some videos from this guy on youtube he gives some great tips for working with contractors and rehabbing in general. Check them out!

    https://www.youtube.com/watch?v=j7zVv_rbLnI

    0Reply
  • Lamar Wint
    OP
    Los Angeles, CA · Member since 2020 · 21 posts · 8 votes
    6y

    @Micah Haworth You said the least, yet provided the most value. I owe you a cup of coffee or something.

    2Reply
  • Beth H.
    Real Estate Investor · Catonsville, MD · Member since 2016 · 90 posts · 49 votes
    6y

    Lamar may I ask.what street and bn lock the property on?  In Baltimore that makes a huge difference as comps and type of rehab will depend on it.

    0Reply
  • Mark Cruse
    Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
    6y

    Congrats on pulling the trigger but it appears you are taking a very high risk. Investing in Baltimore is very difficult for the average investor who is here on the ground watching it daily. Investors who have tons of experience still run into massive complications with the process. Now COVID has even made it more convoluted. What would make an investor with no experience, no network, no one on the ground and no crew invest in something on the other side of the country? There are thousands of things that can go wrong here. I'm an experienced investor with over a decade under my belt. I live in the DC area and Baltimore is only an hour away. I have never did a flip there because of risk and many other dynamics. Then you say you have time constraints. 

    0Reply
  • Lamar Wint
    OP
    Los Angeles, CA · Member since 2020 · 21 posts · 8 votes
    6y

    @Mark Cruse It seems majority of the replies here were curated prior to reading. I think I mentioned about 4 times that I’ll be relocating to Baltimore. I understand it’s a huge risk. I’ve been studying for years and I just decided that I’m ready to take action. I’m ready to learn hands on. I’m just going to go ahead and delete this thread as majority of the replies seem to have a negative undertone. I appreciate everyone’s help.

    0Reply
  • Mark Cruse
    Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
    6y

    @Lamar Wint I have no idea why you are getting offended. At least for me I would love to see you be successful and would assist you where I could. Many are just trying to grasp the scope of the entire situation. Just saying that the approach is difficult. There is no shade at all. Believe me, Bmore can be rough and very nasty with shady people. It's not a place for people getting offended easily. I'm glad you are relocating though! Good luck and I wish you the best. 

    0Reply
  • Beth H.
    Real Estate Investor · Catonsville, MD · Member since 2016 · 90 posts · 49 votes
    6y

    I don't think you should delete it. It is a learning experience.  Please do a search for street name Eierman for discussion on property in Baltimore. The investor from California was very thankful for all the feedback.  Best wishes.

    0Reply
  • Lamar Wint
    OP
    Los Angeles, CA · Member since 2020 · 21 posts · 8 votes
    6y

    @Mark Cruse I understand how you would gather that I’m offended but that’s not the case. There just seems to be a focus on the wrong aspects of my post. Bigger pockets is a network of real estate investors so I figured if I posted in here, then someone could connect me to their network, but instead I’ve just been repeating the same thing over and over. It’s just not constructive is all.

    0Reply
  • Lamar Wint
    OP
    Los Angeles, CA · Member since 2020 · 21 posts · 8 votes
    6y

    @Beth H. Will do thank you!!

    0Reply
  • Mark Cruse
    Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
    6y

    Well if you see it that way good luck. I was trying to get a grasp of the situation and provide you with an idea of what you are up against. When you put anything out in any social media it may not be 100 percent of what you may want to hear every time. I won't provide any further insight or guidance unless you request  aside from advising you to get with one of the Baltimore REIAs when you get here. Great resources and people with tons of experience. 

    0Reply
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