All Forum Posts by: Arpan Patel

It's not fool proof however there is more of a likelihood it will get better over time. Every market is different and one should always understand the local market and while I agree that opportunity cost is a real cost that should be factored in, it does have less logistics and management necessary. Furthermore in general, if you are doing a flip, one would have a higher costs of rehab and therefore more capital risk. You can lose money any which way in this business; however, what has the best risk profile and lease active management? 

I'd counter that having a rental with minimal or no rehab has the best risk profile. If that were not the case then why do banks prefer lending to long term rentals versus short term flips? If your point of flips being safer were true, then wouldn't banks (who make money on their ability to evaluate risk and judge interest rates as compensation for risk) rather lend to flips versus rentals? Why then do we have so many hard money lenders in the short term arena to fill the gaps left by bigger banks and not nearly as many in the long term marketplace? 

Those are just two reasons - intrinsic and extrinsic - that I recommend starting with a rental. Flips can work and there are many many example on BP of people starting out that way. I did. But the original question was "As a new investor would it make more sense to start flipping project or look for rental properties?" That is my reasoning behind my opinion. I of course can be wrong just like anyone. Let me know what you think but I hope that helps and let me know if you'd like for me to elaborate on any of the points.

Agreed with the others but have you tried putting the property in the BP calculators? They will insure that you don't miss any costs. My suspicion is that the deal will not work but I could be wrong as my market is different from yours. Try the calc and if you'd like I can help you go through it if you'd want to share with me. Good luck and Happy Hunting!

My advice is to rent. I flipped to start and looking back, it was too much risk for someone who really had no idea what they were doing. I would have benefited more from taking on a light rehab at most and renting. The risk profile of a rental is much more forgiving. Think about a property you rent and hold for 15 years, if you purchased it wrong in the beginning or put too much in rehab, the property may appreciate or the rents may go up and you will be vindicated. Time heals poor investment choice if you stick to them. Flips, there is no forgiveness and you will need to realize a loss right away. There are also more variable to manage and more moving parts that need to be overseen. I advise anyone I know who is starting off to find at least 3 rentals first and get comfortable with that model. I hope that helps and PM me if you want to discuss anything in specific. Happy Hunting!

Last thing to add onto what everyone else has been saying is if you know people with money. You can pool funds together and take down a large multifamily. for 75k passive with a 50/50 split with an investor and a typical unit will yield $100 a month cash flow you'll need to take down 125 units which you can do in one deal if you can find a partner that can qualify for the loan (say FHA), obtain the funds and you run it properly. It's been done and I think there are a few podcasts about people who did just that on their first deal (100+ units). You have some challenges ahead but then again, everything worth doing will have challenges. I hope this helps and Happy Hunting!!

Probably take a look at the BP calculators and keep reading. This game is about learning as much as you can and just keeping it in your head (other than numbers of course) to hone your instincts. You're doing everything right and there is no one most critical thing you need to learn first. This game has a lot moving parts - it's not rocket science but it does require strong sense of logistics and a strong sense of urgency. Keep up the book work and research and just go with your well reasoned instincts. I hope that helps

I'd probably start with: realtors, attorneys, CPAs, lenders (banks, hard money, private money), and insurance agents to start. Eventually you'll want contractors, inspectors, surveyors, title agents, specialty contractors, property managers if necessary, and maybe some branding people. That kind of rounds out our roster and what we look to acquire when we set up shop in our second state. I hope that helps!

It is definitely a roller coaster ride but what worth having isn't? Stay strong!! Happy hunting!

Properties is big of course because with a deal, many doors open up. Other obstacles are the classic financing but you'll be surprised how you will be able to find money if you have a good opportunity for others to invest in. It is a bit of a broad question but many start by figuring out what a deal looks like in your area and figure out a model based on what you are seeing are the soft spots. Then being to scale. Start with your local REIA and see what others are doing and go from there. I hope that helps. If you have some other specific questions please feel free to reach out. I will give you my best opinion. Happy hunting!!!

great plan!! Tried and true!!!

It will be rough to purely ask a realtor for that much time without any prospect for compensation. Open houses can work but not many blighted properties will run open houses. Maybe just be upfront with the realtor and if they agree then the expectation is set. Maybe work with a realtor who has many investor clients and shadow them for a while that way you aren't taking up a lot of time. Also viewing online pictures can help or ask the realtor to face time you if they running houses. maybe break that up to 20 homes and 5 realtors in 5 different areas. That might make more sense in that you can probably see 6-10 properties a day and that is basically 2 weekends per area. That might make it easier to swallow for the realtor and you have a large net to get deals. Just some ideas and I hope that helped!