Wondering if I'm at least in the right direction

[Mike Frelund]

Hey all I made a real basic outline here as to the steps I need to take in order to flip a property. I'm sure I've left a lot out but am more so wondering if I'm at least in the right direction as far as the order of the steps. I'd love to be able to find someone I could shadow for a bit to be more hands on with the process. But at the same time I still have so much to learn to even make me a new rehabber. I was told in another post to start attending rei meetings which I do plan to do as well, but again I feel I still need to learn more just to be able to have a conversation that's not wasting mine or their time. Anyways this is what I have so far, again, real green, and real basic at the moment. But any and all information good and bad is greatly appreciated. Calculate funds (find partners,loans,rehab budget, timeline etc) Analyze neighborhoods Find property and real estate agent Find contractors (I can do a lot myself but I'm sure I'll run into things I'm unable to do properly)

[JD Martin]

Personally, I find it is helpful if you want to get somewhere to identify what you want to get to, then simply reverse engineer what has to happen.

For example, if you decide "I want to go on vacation", you generally don't just show up at the airport and tell the ticket counter "Fly me to anywhere!" Instead, you consider how much free time and free money you have, where you want to go, determine that you can go there with the resources you have, and work backwards: OK, my final destination is Bermuda, so I need 2 round trip flights. But there's no flights from my airport so I have to catch a connector. I need to get my passport updated. ETC.

Flipping a house is not really any different. If your goal is just to be employed flipping houses, you can start anywhere. But what is your goal? A certain amount of money made every year? Great! Let's start with "I want to make $100,00 annually flipping houses within 5 years". OK. I don't want to move, and I don't want to commute out of state to oversee, so that leaves me with my market. OK, that means in my market, if I can make $50k per flip, I need to do 2 flips per year. But houses in this market sell for $100k, tops, so it's unlikely I can make $50k per flip when low sale prices are $50k. So I need to flip 4 houses in this market, making $25k each. Great! What do I need to flip 4 houses per year? 

ETC.

[Drew MacDermott]

@Mike Frelund  That's a great start!  It sounds as though you have some background already.  If you haven't yet, check out all the Beginner Guides found under "Education" to continue your learning of relevant niches you are interested in.

Yes, find local REIA clubs. Start attending those to introduce yourself and what you want to accomplish. Once you find your real estate agent, have him/her send you listings every week or every day and analyze every one of those leads. Eventually, you'll find one that meets the criteria that YOU set for YOUR business. It appears you want to flip property, so what is your desired minimum profit per deal? Do you know how much the repairs will cost? Finding multiple contractors to supply bids will help. Buying significantly under market price will give you equitable breathing room should anything happen to the property (i.e. repair costs blowup, can't sell the flip right away).

Best of luck!

[Mike Frelund]

Drew MacDermott those are all questions that I would assume vary from project to project. The only constant I would be able to foresee would be my desired profit but even with unexpected problems that could fluctuate too. Part of that list that I left out would definitely be to allocate x amount of money for unseen problems.

[JD Martin]

Personally, I find it is helpful if you want to get somewhere to identify what you want to get to, then simply reverse engineer what has to happen.

For example, if you decide "I want to go on vacation", you generally don't just show up at the airport and tell the ticket counter "Fly me to anywhere!" Instead, you consider how much free time and free money you have, where you want to go, determine that you can go there with the resources you have, and work backwards: OK, my final destination is Bermuda, so I need 2 round trip flights. But there's no flights from my airport so I have to catch a connector. I need to get my passport updated. ETC.

Flipping a house is not really any different. If your goal is just to be employed flipping houses, you can start anywhere. But what is your goal? A certain amount of money made every year? Great! Let's start with "I want to make $100,00 annually flipping houses within 5 years". OK. I don't want to move, and I don't want to commute out of state to oversee, so that leaves me with my market. OK, that means in my market, if I can make $50k per flip, I need to do 2 flips per year. But houses in this market sell for $100k, tops, so it's unlikely I can make $50k per flip when low sale prices are $50k. So I need to flip 4 houses in this market, making $25k each. Great! What do I need to flip 4 houses per year? 

ETC.

[Drew MacDermott]

You should obviously mitigate your risk on any project for unforeseen issues.  Whatever your repair estimate is, add a contingency factor because you will go over budget.  Read Jd's explanation again.  Then read it again.  And again.  This is a great strategy to move forward from where you are now.  Figure out how your business will run, how you need to accomplish each task, and apply that philosophy to each project.

[Mike Frelund]

Jd Martin my ultimate goal is to get out of my job by yesterday. But realistically that can't happen, however, the way you laid it out is perfect. So far what I've seen is you get out what you put in. If you want to make 100,000 a year it's possible, but not easy. Luckily I'm a very ambitious person and have always had the understanding that you can have anything in this world, but nothing is free and has to be worked for. I think I'm gonna build a better plan around the advice you gave and that should start to point me in the direction I'm looking to go.

Drew MacDermott thanks again for the advice. My posts are pretty limited on here so far due to the fact that I've noticed basically all the questions are already around here with a simple search. I'm sure I will def be asking a lot more questions in the near future to everyone around here.

[Mike Frelund]

Also I should add that driving isn't an issue for me. I live in ocean county but most of my time is spent in mercer county. So areas for me would basically be from the long beach island area, as far north as say Morristown and I'd even go west into Pennsylvania. I don't want to limit myself to one single county or anything so that id have a greater chance of finding properties.

[Paul Timmins]

@Mike Frelund

Welcome. 

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and rehabbers (cash buyers). Find them through Google and meetup.com

Two Great reads, I bought both J. Scott The Book on Flipping Houses, The Book on Estimating ReHab Costs http://www.biggerpockets.com/flippingbook

Consider checking out HUD homes for small multi's owner occupied gets first crack.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good Luck

Paul 

[Steve Babiak]

I suggest you look into SJREIA for starters. They have educational meetings too.