Fix and Flip - jumping in

[Karen Williams]

My husband and I are just starting out and are looking at properties in our area to fix and then flip. I’ve been running numbers on a few properties and haven’t any luck meeting the 70% rule.

I feel like I am stuck in analysis paralysis and wanted advice on just going for a property even if it doesn’t meet all of the suggested calculations. Any thoughts, advice and opinions welcomed.

Thank you!

[Nicholas L.]

@Karen Williams how do you plan to purchase?

[Karen Williams]

@Nicholas L. Conventional with 3% down and splitting the rehab costs with a partner.

[Nicholas L.]

@Karen Williams got it. So the partner will get some of the profits? Just because you can't find a good deal doesn't mean you're in analysis paralysis. With the partner involved I think caution is warranted. It's extremely difficult to find good deals on the MLS right now.

[Karen Williams]

@Nicholas L. Yes, our partner will receive some of the profits. We are in the Fresno area in California and wanted to invest in this area, from what I’m finding, its pretty challenging for beginners. We will look at nearby areas as well. Thank you for your input!

[Dylan Miracle]

Hi, Karen. I wish you the best of luck. I am involved in REI with a team out of Fresno area as well. You're right to say it is competitive, but there are deals to be had. Have you thought at all about investing in more more affordable areas? I know quite a few investors that are investing in other states, such as Indiana where you might find it a bit easier to find deals that match the 70% rule.

If you decide to do that, I would make sure that you try to make contact with the core four a deal finder (could be an agent), a contractor, a property manager, and a good lender. You can connect with these people on biggerpockets or find people that have worked with these people through BP! Hope this helps. 

[Karen Williams]

@Dylan Miracle I will have to agree with you on Fresno being competitive. We are both still working full time and thought it would be easier (for now) to invest in our area, however, we are open to looking at areas. We will keep at it.

Thank you for the insight.

[Darryl Putnam]

@Karen Williams congratulations on taking the leap forward on your real estate journey. Do not get discouraged your first property is always the most challenging to find. Fresno is a great area to invest.  Fixing and Flipping in the area you live has a lot of advantages.  Stay focused and a deal will present itself. The 70% rule is just a bench mark not a hard and fast rule.  Run your numbers at 70%, 75%, 80% even 85%.  Getting that first deal under you belt is most important. The metrics in Fresno are in your favor now but still plan for multiple exit strategies.  If the market slows could you live in it, can you rent it and cover your expenses.  Look at rents month to month, Air BNB, traveling nurses.  Best of luck.