Quote from
@Curt Smith:
Hi Brett, My number 1 tip that is general is find your local REIAs and join them all. Google REIA Philidelphia, then go to meetup.org. Go to the flipping and REIA oriented meetings. When at these meetings, go to a few a month, find folks who are experienced flippers. Be quiet at first and list. FWIW there's alot of talkers who actually do few if any deals. Listen for addresses, then look up on zillow, check price history for cost to buy and selling price. See if it adds up giving the profit mentioned? Today the deals I'm hearing of are making very little profit. Your first few deals might actually LOOSE MONEY. Yup I know a very smart guy and his first few deals lost money. Not just un-expecteds, more likely is under sizing the real scope.
#2 only do causmetic fixups at first. Paint, flooring, fixtures, paint the cabinets. You'll be lucky to make $10k on a simple flip but you'll not loose $50k either.
#3 get educated by local flipping trainers especially if its run by the local REIA. I agree re BP to stay away from the national education folks. Local teachers know the local zips / market / what works.
#4 Spend a few years learning, building your network. Getting contractor referals from within the local REIAs...
#5 Its not that all wholesalers are sharkes, but their job is the opposite of yours. They strive to get the most for their contract, your job is to buy a house that you can fix up and make money. You are at odds with a owner seller AND a wholesaler. This means its YOUR job to be able to single handedly (with a local expert looking over your numbers) the rehab costs AND selling price. Ignore the wholesaler and some times the blow-hard locals who don't know much. YOU need to be come your own expert,,, which is possible through educatoin, a deep network, and being smart at analyzing deals. THEN run those numbers by a few locals who have done flips in that area.
Then your rehab budget might include 10% more cash for oops. FYI my view of that stupid HGTV episode was they picked the wrong house!!!! Stay away as a beginner from complete wrecks.
Today unbelevably $110k rehab does not do as much as it used to. In Atlanta to take a solid 1940's 900sqft 2/1 and pop it out the back into a 1200 sqft 3/2 costs $120k. $110k might be needed for a no exterior walls moved, same roof line just remove a wall or 2, maybe 1200 to 1500 sqft 3/2 and just update. (might be enough).
Which is why its so tough to make money!!! $350k selling less 10% cost to sell $35k less $110k rehab less 20% profit less $20k hard money less 10% contingency = $80k the most you can pay for the 3/2 1200-1500 sqft house. Good luck finding that deal!!! Which is how most flippers are being forced to over pay and make very little since the rehab rarely goes smoothly tnx to many factors including rehab crew problems. ;( Keep reading and start joining local groups.
