What's the first step you took for your first rehab flip?

Question

Hey everyone! I was thinking about the first step that I should take in order to find my first deal, rehab and flip. I know some of you recommend finding a mentor, starting a DM campaign, finding contractors, lenders, doing comps, etc. etc. With all these different variables I'm finding it hard to take action. I don't know where to invest the limited time that I have due to my full time job.

Recently passed the state exam. Haven't hung my license yet though. My uncle has a friend who has a brokerage firm. He payed my exam and application fees and I plan om hanging my license with him. However, his mother just passed and he is getting things arranged for her service. We plan to sit down after the holidays, which means no MLS access until then. Been waiting for this to happen because mentoring will come along with it. Learning how to do comps etc., another road block I'm faced with.

I know there's a lot of you with experience doing rehab flips and I'm curious what steps you took first?

What steps should I take to get started? A mentor would be my best option, but I can't seem to find anyone willing to do that. Suggestions? Feedback?

Thanks in advance!

David Friedman · Answer

Hello @Jordan Sizelove

There are many ways to find your first deal. In the case of a flip, you really should partner with someone who:

1. Has experience

2. Is trustworthy

3. Does real estate investing as his/her full time job

I suggest this route because flipping isn't just investing. It can be a full time job. Because you already have a full time job, do you expect to be able to do what is necessary to protect and foster your investment?

In real estate investing you either need a lot of TIME or a lot of MONEY, especially when getting started. The people on BP who purchased a property and had the owner carry back a loan, had to have the time to negotiate with the seller. The people who got a great deal on that foreclosure property had to have the cash to do so.

Mentors can be hard to find. Even if you find one, they may not be interested in taking the time to teach you. Your best bet is to be able to offer them something in return for their time. Maybe you can help on their flips for free (Trashout, construction, door knocking) or you can offer to be capital partners with them. If you have some money saved from your full time job, you can offer to partner with the mentor. In return for letting them use your cash, they can show you the ropes.

Side Note: MLS deals are highly visible to everybody. Sometimes you get lucky, but most of the time the property is on the MLS in the first place because it isn't a deal. Negotiation skills might come in handy if you are trying to buy properties off of the MLS.

Let me know if any of that helps!

Antoine Stanley · Answer

When you say doing your first rehab and flip I'm assuming your looking to purchase one yourself. What I would do first is go to my local REIA and meet wholesalers and also the people who already rehabbing properties in your area and talk with them about things they do in your area that works when rehabbing properties.

Jordan Sizelove · Answer

Thank you for the fast reply. Your post was very helpful! You gave me the motivation I need to finally commit to one of my local meetups. My girlfriend and I are gonna attend one tomorrow night.

Is it bad to show up late? Not sure if I'll be off early enough to make it on time. The meetup location is about 45mins away to make matters worse. Thoughts?

@J Scott J. M.

Tom Lane · Answer

FUNDING

All great flips need funding!

OUR 'rule of thumb' is to spend 1/3 for purchase and 2/3 to bring it to market (i.e., 20k to buy, 40k to finish, = 60k total. This includes materials, labor, utilities, insurance) We add another 1/3 + closing costs and THAT number becomes our ask. OUR average ROI is about 25%.

ALL deals are unique, of course, but that is OUR target...

Yasmin Swaggerty · Answer

@Jordan Sizelove

Thank you so much!!

Yasmin Swaggerty · Answer

Hello Jordan

@Jordan Sizelove

I would love to attend meetup's, please let me know when will be the next meetup?

Looking forward to connecting with all of you soon! Thank you and have a wonderul day!

Jordan Sizelove · Answer

It would be really nice to hear how some of you got started investing. @J. Martin @J Scott @Eric Giovannucci @Michael Sarwari

Attended my first meetup last night and it was great! Got a chance to meet Michael Sarwari and a few others.

There's another meetup tonight in SF. Plan on meeting the famous @J. Martin and networking with others. Should be a good time.

So the networking has begun. That's the first step I'm taking. Let's see what happens next.

Jordan Sizelove · Answer

That sounds great Eric!

You are absolutely right! I've been going about things the wrong way. I'm gonna start up with some local investors and build a relationship. Pick their brain about the market and go from there.

That is a great plan! Interested in knowing more about the website you created. Maybe that can be one of our discussions when we meet up next week. I feel the same way. I have family who are willing to provide some capital on some of my deals after I show them that I know what I'm doing. Since I have no capitol, I wouldn't wanna risk anyone else's money just starting out. I'd prefer a mentor on my first flip.

Let's make next week happen!

Eric Giovannucci · Answer

Jordan,

I know we have spoken briefly about getting down to @j Martin's meetups. We can get together next week and talk some more.

However, to provide a little insight from where I sit. I too find myself becoming more paralyzed due to over analyzing everything. I've spoken with a few people that are established in the area and plan on just sitting down and having a cup of coffee with them to ask about the market. I feel like asking for anything besides some quality conversation and brain picking right off the bet is going to come off as needy and a typical newbie.

I think the best approach is to create a presence within the community. I have started marketing by creating a website and just emailing on fsbo and other craigslist ads. I honestly plan on either wholesaling or just providing a potential deal or two to an established investor in trade for some working knowledge. That being said, I have lined up a few lenders and talked to them about requirements. I feel like if I wanted to take the risk at this point and go at it just myself and my wife that I could, but I would prefer to work with or for someone on the first one.

Well get together soon, stay in touch.

Antoine Stanley · Answer

Hey @Jordan Sizelove

What I did to land my first rehab property was started becoming known in my local REIA by flipping wholesale deals to real estate investors. I also gave up my wholesale fee to an investor who purchased my wholesale deal so I can learn and follow his process for rehabbing the property. Not only was great information for me but I also started working with his crew on deals. I started teaching about wholesaling at my local REIA becoming an expert very quickly and than new investors that didn't have the time came to me about using their funds for rehab. I also found a partner who knew rehabbing and had the paperwork and procedures of dealing with contracts down. I said to him I have some lenders to work with I know how to find the deals I need someone to help run a tight ship and he came on board. Hope this helps that's how I got started rehabbing properties. You can visit my facebook page maisoninvestments to see some of the rehab work not sure if that's appropriate just wanting to assist.

What's the first step you took for your first rehab flip?

What's the first step you took for your first rehab flip?

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