Virginia Beach, VA · Member since 2016 · 4 posts · 5 votes
Hey guys my name is Kadijah I'm from Virginia beach, Va. I'm interested in flipping single family homes. I've been reading articles and books for the past few weeks and I have to admit I'm a little afraid and I keep feeling like I need a spreadsheet of every little detail/step that goes into flipping a house. I want to do this I know I do..... I guess I was hoping you guys could maybe share how you finally started the action phase of flipping...
Investor · Raleigh, NC · Member since 2016 · 36 posts · 12 votes
10y
@Jon Q. How do you recommend that folks get experience? We all start somewhere and the biggest hurdle for most folks is to get started. It looks like you're an experienced investor who can offer some guidance for newbies looking for a way to get into the business.
Kadijah Hammond , it may be a good idea to wet your feet in real estate investing by starting with wholesaling. It does require hard work, but carries less risk as compared to flipping.
You can read free wholesaling guide on BP.
Attend local REIs and get connected to other wholesalers, cash buyers and lenders.
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
10y
I am a tad late to this conversation but as an experienced investor, I wanted to touch on several comments in this thread, I will do my best to remember them all.
Build your team first (of course this comes after educating yourself on the specific strategy you intend to do with books, BP, mentor, RE group meet ups, etc). Part of your TEAM is your lenders so to answer the first question, line up financing ahead of time. This allows you to be a stronger negotiator as you go into it with the backing of funds. It also allows you to calculate to the dime your debt service costs based on your estimated hold time.
Building buyers lists as a wholesaler is also portent but keep in mind bigger dies not mean better. All you need is a handful of quality rehab performers to sell your deals. This assumes you contract deals with legit spreads of course.notherwise, you will only be able to dump them off yo rookies and ignorant buyers.
Your motivated seller leads are the base of your business, without these, you have no acquisitions. There are hundreds of threads on this topic here so I will not regurgitate them here.
A comment was made that flipping is not investing. This has also been debated a few times on BP and I disagree entirely. Look up the definition, one of them is: "toput(money)touse,bypurchaseorexpenditure,insomethingofferingpotentialprofitablereturns,asinterest,income,orappreciationinvalue." Flipping a house requires you invest money into the acquisition costs, rehab costs, holding costs, and resale costs with the expectation of making a profit. That IS investing. I will agree completely that it is an active BUSINESS and not passive investing.
Rental Property Investor · Estero, FL · Member since 2016 · 195 posts · 105 votes
10y
Will Barnard As an experienced entrepreneur (novice REI) I agree. An investment for profit makes you an investor. Whether everyone likes it or not.
I wonder do you recommend a novice invest in lower cost properties to start? Perhaps a condo or a smaller home? I know profit is profit no matter the size but I am just thinking it may help with the comfort level of a beginner with likely limited funds.
How do you feel about using home equity on a first investment?
Will Barnard As an experienced entrepreneur (novice REI) I agree. An investment for profit makes you an investor. Whether everyone likes it or not.
I wonder do you recommend a novice invest in lower cost properties to start? Perhaps a condo or a smaller home? I know profit is profit no matter the size but I am just thinking it may help with the comfort level of a beginner with likely limited funds.
How do you feel about using home equity on a first investment?
I do agree that starting with lower valued properties lowers the barrier to entry and lowers the potential loss amounts in some fashion. It does however bring you into the most highly competitive areas as "everybody goes after the lower hanging fruit.
As far as using home equity to make your first flip purchase, that is a call only you can make. You must live with the outcome and if you lose $20k as an example, you will have to pay on that to pay it off. That said, it is very common for a newbie to break even or even lose a few thousand dollars on their first. Consider that your college education fee into the business and make it up on the second one and beyond . . .
Can someone please advice how to find a credible realtor who is also a investor.
Tough question as "credible" can mean different things to different people. What you are looking for is an experienced agent with a proven solid track record who has also done RE flips. To find this, you would have to ask each agent you interview and ask for an address so that you can verify they have in fact flipped at least one. There is no list that you can acquire (that I know of) that lists solid agents who also do RE investments so this task will tale a bit of work and effort on your part.
You'll need to learn about private lenders and other sources as banks are not lending to investors these days. They do lend to business entities - LLCs and such; however, those are, by nature, commercial loans.
If you check my profile, you'll see that I'm connected with an on-line REI school. It may be best to get some education under your belt before you begin.
You can spend your days combing these forums, of course, and hoping you find what you need from an authoritative source.
...or, you can take classes from a syllabus where everything is organized into a logical sequence.
PM me if you have interest in exploring this option. Hover your mouse over my picture and you'll find the "Connect" link.
Virginia Beach, VA · Member since 2016 · 4 posts · 5 votes
9y
Hey guys thanks for all your great advice just an update. I'm currently enrolled in a course to become a licensed real estate agent and I'm super excited still nervous of course. I'm in Virginia and not really sure what company would be good to work for... also if any locals want to connect that would be great. Have an awesome day in real estate!
@Will Barnard I guess it also goes back to the market and what it is offering as a "good deal". Thank you for the pro and cons.
What form of investment capital would you recommend I research further before considering using equity?
I am a firm believer in building your private investor network. It is where I started in this business and where I have stayed for the most part. A vast majority of my acquisitions come from a combination of private investor funds and my own capital. Seller financing (can come in several forms) is also a great tool for funding.
Investor · Campbell Hall, NY · Member since 2016 · 30 posts · 10 votes
9y
Being a contractor I can tell you this. When looking at a property make sure you leave room for the mechanicals. Most of the time these cant be trouble shooter until you own it. Also check where the septic is. No encroachments. Make sure no under ground oil tanks that are over looked. Most areas you need a permit to have taken up and added costs. Lastly, check your municipals. Things that aren't listed on the assessment are usually because they were never recorded. I've had plenty of instances where a shed or garage was done without a permit only to have to rip it down because the new buyer cant close until it's gone. Another added cost to demo and dispose. Just a few mistakes investors that don't know will make. Do your due diligence before closing.
Real Estate Investor · Los Angeles, CA · Member since 2013 · 2k+ posts · 694 votes
9y
Hi Kadijah Hammond
A lot has been said already but it can't be stressed enough to find a local REIA and network with others in person. It will not only help you find your team, but also help motivate you to act.
Good luck!
Kuba