I need to flip these houses what am I doing wrong?

Question

How do I manage this Flip deal ?Recently I got several SFH leads in Florida. Being "New" to real estate investing. the very first thing I did was to scout for financing for a down payment . I got one which offered $5,000 but I needed $850.00 upfront. (This one I sat on) I also located an attorney, an appraiser in the area of the SFH (should I need one, flipping). I took the address and got a full report on the house. Which had some red flags, High crime.., etc..., Do I need to do this, I assume I will be re-assigning the property.The initial price of the house was $210,000. Several days after I received my report the seller said the price was now $267,000 .I told the guy I thought the house was over valued (should I have said this, because I was not looking to be the end buyer). I was searching for a cash buyer , someone I could re-assign the contract to. My strategy is to buy & re-sell a couple of properties , before actually buying and holding. This house was an FSBO initially. While we were negotiating the owner turned the listing over to a realtor. I offered him $210,000 ( I was going to offer , less) but have not heard back from him. I am , "New" to this. Wholesaling and real estate investing but not to real estate. I have an attorney here that can deal with any attorney in the states. But am I wasting to much money structuring my deals like this? I have an associate sending me FSBO deals from Florida. He has sent me have about 5 leads so far. Is there anyone that is knowledgeable on how I can successfully contact and re-assign these deals and make a profit. I also have a few other leads from a mentor & fellow investor , that I am really not to as to structure. At this starting point learning to get these SFH re-sold fast are of prime importance to me. I can only guess at this time which deal needs what type of funding.Thanks for any advice you can give.Denise B.

JD Martin · Answer

Probably my first advice would be to build some cash reserves or other access to funds, because if you have to hunt for $5k financing and can't come up with $850, this is going to be a very difficult business to invest in. I don't care what anyone says - you can't buy real estate without money. You need money, whether it's yours or someone else's money. @John Thedford can fill you in on the law for wholesaling in Florida. I would imagine being a resident of another state would make it less legal, but that is only a guess.

John Thedford · Answer

Chapter 475.43 makes it illegal to use contracts to circumvent licensing law. It also specifically states advertising properties you do not own is considered brokering. The only way to legally deal with these issues is to:1. be licensed2. purchase, advertise, and then resell.

Mateusz Prawdzik · Answer

@Denice Blair Hey Denise, welcome to BP, the land where everyone tries to help everyone. That is why I am here. Let me warn you, even though I am not from Florida, I have heard people talking about it being illegal to wholesale in Florida. I don't know how true that is but that's just what I heard. Even though you are new to the business, make sure that you are doing everything with your head straight on your shoulders because you don't want to be accountable for a property when you can't close on it and then everyone treats you poorly and you diminish your rep because of a hiccup and not knowing what you were doing. With this being said, out of state wholesaling for a beginner sounds very tough especially because you can't see the house personally. Pictures are great but you can hide a lot of things with pictures. FSBO leads are great but as soon as they are posted online or something of that nature, you better expect someone else already saw it, so now you have competition. I like the ambition of trying to get started because that is the hardest thing to do, but ACTION is key, and everyone knows how I like the word ACTION. I would maybe try to stay local and get a feel for what and how things are done before going that far out. NJ is closer and a great place to start. Finding cash buyers is not too hard as long as you market yourself and network with people at meetups and thru BP. I just recently started to market my brand and create something for myself after gaining some experience and credibility and now I am trying to build a crazy following.( IG : PrawdzikProperties if you're interested in following I would appreciate it). I can tell you, you're on the right track because you are doing what 90% of people can't do and that's start, but I would stick to something more local so you don'y make the mistake of over offering for a property and then being stuck with it.