Aspiring ChicagoLand Flipper, Ready to Learn More

[Paige Alexandre]

Good Morning All!

My name is Paige and I am from the Chicagoland Area. I am 26 and I am finally ready to take a step into real estate, and I have to say that it is quite intimidating. I have begun reading the Beginner's Guide, but I would love some more feedback as I go through this process. I have an extreme interest in flipping houses, I know that this process is not as lavish or easy as they make it seem on Flip of Flop, but it is a challenge that I feel I'm ready to take on. I have a current income of around 45K a year and I want to flip houses in the suburban areas of Chicago. 

I guess my questions to you all here is how easy (or difficult) is it to get funding for flipping projects starting out with no experience? How did you pursue your own flipping process? First flip common mistakes? And finally, I plan to move to Houston (not set in stone) by this time next year, would it be best to wait, study more, and pursue a flipping career in Texas or would Illinois be better? What were your very first steps in entering the real estate flipping business? 

All comments are appreciated!

[Jim Cummings]

@Paige Alexandre. Welcome to the BP Forum.

To become a successful Flipper you need knowledge & experience in several areas.

1. Finding properties that make a successful flip possible. There are a number of ways to find homes: Wholesalers, MLS, driving for dollars, mailing campaigns, Auctions, Bird Dogs, etc. Look for distressed homes in established neighborhoods, or homes in neighborhoods that are being revitalized.

2, Evaluating Homes for a Profitable Flip. There are a vast number of homes in any market area that need Rehab. There is a significantly smaller number of homes that need Rehab -  you can buy and make a profit ($$$) after the Rehab. 

You need to be able to determine, what the realistic value (ARV) of the property will be after you've completed the Rehab. This is best done by comparing what other homes have Sold For in the general vicinity of the property. As a general rule of thumb, an educated buyer will not pay substantially more than the average price for a home in a neighborhoods. There are a number of sources for data to evaluate home prices, the best known and most useful is a competent real estate agent with access to MLS data.

You also need skills in evaluating what repairs are needed, and what the costs of the repairs will be to create a realistic budget for the project. 

3. Funds. You need Funds, or access to funds to complete the purchase and rehab. Sources of funds are only limited by your imagination, creativity and ability to "Sell" your ability to make it happen. Some immediate sources are personal funds, community banks, friends and family, hard money lenders, crowdfunding, etc.

4. Rehab Team. Unless you have all the skills necessary to do the rehab work yourself, you'll need to find competent people with construction experience to do the actual work.  You need to find these people before you close on the property. Waiting until you closed on the property will only extend completion of the rehab, costing you time and money.  

5. Management Skills. Do you have the People Management Skills and "Moxie" to deal with contractors that don't show up when they say they will or don't complete their portion of the job on time and budget.  

5. Marketing and Sales Skills. Do you have the Marketing and Sales skills to get the project Sold once the rehab is completed. 

Surely I left off many other items / issues that need to be covered. All the information is out there - you just have to do the research and work to  boil it down to something that works for you. And then after all your research - You have to get your "nose bloodied" a few times to reinforce your research.

Good Luck! Look forward to seeing the report on your first flip.