Looking for $100k property in Sacramento. Buy and hold or flip?

[Alex Gadbois]

I am looking for a property in roughly the $100k range in the Sacramento area. There are some SFR's and condos on the mls in that price range. Most of the SFR's need work. I have about $25k in the bank, but I am trying not to spend it and keep it as cash reserves. I have at least one other person that is willing to loan me around $25k or so for a down payment. I know a couple of other people that may be willing to loan me some money as well. So, do I buy and hold or flip? The market is hot in Sacramento and it seems to be getting harder to find a rental propery that will produce positive cash flow. I am intrigued by the idea of flipping, but I have never done it and I really don't know much about fixing houses or estimating rehab costs. If I buy a rental property I will have to get one in a less desirable are and would have to deal with less than stellar tenants, if the property can cash flow at all. If I buy to flip, I am concerned that I may get eaten alive buy rehab and holding costs. What should I do?

[Sergey Tkachev]

@Alex Gadbois, I agree with @Derek Jones - the market in Sacramento in tougher to get into than it was.  Having said that, it doesn't mean you can't, you just have to put in a lot more effort than you would have a couple years ago.  

It seems that once a market becomes hot, it's much harder for newer investors to get in and not get burned because there is more risk created by the higher prices and buyers who are purchasing emotionally.  So you have to be extra careful and do extra due diligence in order to find a good deal or even know whether a deal is a deal.  If you are a new investor, you can get burned easily if you're not working with or at least being helped by someone who is experienced.

Finding someone who has experience and offering to help them maybe something to consider, might be your best option to learn.  Find locals here on BP or in local meetups who need help.  That's just a consideration but I think it will go a long way in terms of your learning curve.