Tons of Motivation, not enough $$.... FEELING STUCK HERE, help

[Natalie Allen]

OK BP friends, as of now I have gotten my feet wet and am dying to JUMP into the deep end, I've been spending a lot of time 'learning to swim' in this lake of RE but I'm feeling a little stuck. I have done a few wholesale deals & got my first flip finished and under contract, just waiting on a closing date. So far I have been paying off old debt from an injury , which was my original reasoning for starting in RE. Now that I'm seeing the end of that tunnel I want more. Much more. I see what some of you have accomplished and I KNOW I CAN do that too. My clear goal is to acquire 20 doors before my 35th birthday & be financially independent (I have a little over 5 years left to do this), I'll be turning 30 in September and would love more that anything to have my first income property by then. I have been offered private $ at 12% interest only payments for up to 12 months, at that point I would need to refinance to a long term loan. My credit is still repairing after being injured and I want to keep building up savings. I'm just not sure if I should just go for it, or wait until I can get lending on my own. Here is a specific example: there is a rented property for an asking price of $35K that rents for $595. A friend of the owner says I could probably get it for closer to $29K. Tenant pays all utilities. This is a property that could eventually be flipped with around $15k in rehab and ARV of $85-90K. So the interest only payment would be $290 for up to 12 months. By my math (and feel free to correct me if I have this wrong, all advice, criticism welcome good and ugly) I would be paying a total of $3480 in interest for the year. When I go to finance, if I cash flow recycle the money I'll have approx $3660 in reserves if nothing breaks in that year, which I expect. I already have about $3000 that I can dedicate to cap ex so I could essentially have about 10% to put down when I refinance. If I put 10% down & finance $26K at 8% (which might be too high) over 20 years I am looking at $217.47 plus tax & ins so say $310 total. Is this a bad idea or a good way to start? I know it's not ideal but I don't want to sit on my hands for another year and miss something just because I didn't ask the questions......

 Long term I want to do more large multi-families but I feel like I need to start somewhere.  Thanks BP friends, you all are my heroes. 

[Jerryll Noorden]

Originally posted by @Melissa Gittens:

@Jerryll Noorden YOU ARE SO ROTTTEN! LOL jk jk I know you must be itching to say " I TOLD YOU SO!!!!" well guess what you were absolutely right!!! We have known each for about 2 years now and in those two years I was kicking and pushing back on the idea of wholesaling or even flipping... I thought it was WAYYYYYY WAYYYYY WYAYYYY and I repeat WAYYYYY to risky flipping. But after having gotten pretty dang good at running my numbers and finding potential properties for some of my clients... I decided to jump right in!  All though not fully financially in. I recently have been partnering up with my clients to find on and off market flips and have been managing quite a few projects in the last few weeks. After making a decision last month to add in some flips. this year.

Right now we have 2 underway and a third closing by the end of this month, and a fourth project we will hopefully be starting on in the first week of August. Now, don't get me wrong I AM ABSOLUTELY A BUY AND HOLD TYPE OF GAL and won't stop purchasing rentals. I simply looked at my investing strategy and decided if I want to obtain my goal faster I needed to tweek my strategy just a bit to include a few flips a year. 

My advice is, find a partner for your first few deals or all of them for that matter and create value in the relationship. If you can only find great deals and run numbers... guess what! THATS OKAY! You are a diamond in a rough for a fix and flipper because they can't do it all.. In my case I did not have the money.... to be quite frank... BROKE COLLEGE STUDENT HERE!! But I found some amazing people who were looking to get started in flipping who also had the capital.

The value that I bring is that I am a real estate agent so from the sales perspective I know what buyers are looking for in a newly renovated home and can tell you what materials and paint colors to stay away from. Also I am genuine Jerryll will tell you, some of the biggest and best ideas we talk about stays between us. Yes we are competitors but we still work together because we both genuinely want to see each other and the people around us succeed in this industry. BECAUSE its not easy and it will require alot of blood sweat and even tears sometimes. to get to where we want to be. You must have that motivation and power to succeed in anything that you do. WHat makes it awesome is that you can have complete strangers who call you randomly to push you to make a change.. and in this case Jerryll helped me see that I needed to diversify my portfolio into flipping a few this year!!

 You are right...

I AM rotten!