Where To Find Financing For First Flip - Chicago

[Erik Ortiz]

Hey, BP community! My name is Erik and I'm from Chicago, IL. This is my first post so I'm not sure what to fully expect. I am finally deciding to make the jump into flipping houses which is something I have always wanted to do. I've found a home for about 40k, it's not in the best neighborhood but the comps are between 235k-275k fully remodeled so there's potential. I have a realtor that I can work with and a contractor as well. What I don't have, is the financing. I don't want to buy it cash because obviously that's not very smart, at least not when I'm starting out. I was looking into hard money loans but I believe I need an LLC, which I do plan on starting within the next 2 months but have not done yet. Private investing is probably not an option since I'm new to this. I hope I can get some advice and ideas from you guys on financing for the purchase and for the rehab as well. Any kind of advice is greatly appreciated! Thank you guys.

[Crystal Smith]

Quote from @Erik Ortiz:

Hey, BP community! My name is Erik and I'm from Chicago, IL. This is my first post so I'm not sure what to fully expect. I am finally deciding to make the jump into flipping houses which is something I have always wanted to do. I've found a home for about 40k, it's not in the best neighborhood but the comps are between 235k-275k fully remodeled so there's potential. I have a realtor that I can work with and a contractor as well. What I don't have, is the financing. I don't want to buy it cash because obviously that's not very smart, at least not when I'm starting out. I was looking into hard money loans but I believe I need an LLC, which I do plan on starting within the next 2 months but have not done yet. Private investing is probably not an option since I'm new to this. I hope I can get some advice and ideas from you guys on financing for the purchase and for the rehab as well. Any kind of advice is greatly appreciated! Thank you guys.

A few comments. I don't mean to be harsh but a lot of what you have written sounds like excuses. If you believe you need an LLC why are you waiting 2 months to start it. Getting an official LLC can be done on line in less than one day. Regarding paying cash- That's a strategy one can use to lock down a property then get all of you money back from a lender. Another reason to get your LLC started.

Why is private investing not an option?  It's not an option because you have convinced yourself it's not an option. If you have a good deal and can provide a private lender with a good plan, protection and he believes in you then it becomes an option. If you go in with an attitude of "I'm new so it's not possible....." then it's not an option.

My advice- Work on getting rid of all the negative thoughts first then:

1. Start your LLC

2. Get approved with a lender 

3. Learn how to put together a package to present to private lenders.

4. Attend a local cashflow game and get around some people and practice your pitch

5. Attend some local investment group meetups.

Start to get an education on the business you're entering and while getting the eduction remove all the negative, I don't, I can't,..... from your vocabulary.