Traveling House Flipper Idea - Thoughts, Criticisms, Advice?

Question

Here is just an idea I wanted to run by the community. After I graduate from college I plan on staying near home for a while saving up money through wholesaling, house hacking and etc. But after I saved up a bit of money want to travel.

So here is my plan, as far as I understand you can pretty much invest in real estate no matter where you go. What I mean by that, is in theory assuming I have sufficient funds I could travel to any city I wish stay there for a few months to find a deal, go through the entire process of buying and flipping it and after it is sold move on to another city.

This wouldn't be what I will be doing for the rest of my life of course, but I would like to take a couple years to travel a lot throughout the country, and I believe this method could help me do that

I know that this plan will have a few obvious pitfall problems, but that is why I want your input to help find ways around the pitfalls such as:

- Where to live during this time?

I've thought about this some, and I figured I stay in a motel until I've secured the property then while I am in the process of flipping it live in it, and then move out when I'm ready to sell it.

- Lack Of Knowledge of the area

I figure I can get around this by doing research on the market of the area I want to invest in next before I actually head over there. Also utilizing the community here on Bigger Pockets would provide a lot of insight.

Bill Richard · Answer

As someone who has been doing this for 9+years, I have a few opinions and some advice.

First, it can be done.

Second, you'd probably be better off picking a fair sized town in the beginning, say over 250,000 population. This should give you a large enough base to feed you enough deals to keep busy. The larger the better.

Third, pick a place with a GROWING population.

Fourth, Assemble your real-time re agent, lawyer, banker, contractors, etc. Understand that they will need to be kept busy or they will drop you as a customer. It's just business. Expect turnover. Find a way to deal with it.

Fifth: Develop a working system that produces a steady supply of places, whatever it is. Do what works for you.

Sixth, don't try to make the last dollar from any deal. Every team member should want to work with you because they make plenty. As soon as any member thinks it's not worth it, they're gone. It is way more expensive to replace a member than the few dollars you might save.

Seventh,  Don't try to do it all yourself. Don't do low dollar work, no matter how  much you might want to.

Eighth, Once you make it work, then you can establish more teams in different places.

The PAYOFF : You're sitting on the stern of your 50 foot plus boat in the Caribbean, say St. Johns, in Februrary and the phone rings. It's your real estate agent. We've found another one, she says. Details are handled by your team. You reply: fine, I'll have the money sent to the closing agent. Handle all the details, please. A few weeks later, your agent notifies you everything is completed, repairs made and either new tenants are in place or it's  been sold. You verify that the money is in the bank account.  Repeat as often as possible.

Kenny Oliver · Answer

@Joshua Manning

Im currently in the process of doing the same thing.

I have some money saved up taking the road trip tomorrow gonna meet with agents and property managers and hopefully purchase 2 properties.

I plan on doing an Airbnb as they are cheaper than hotels but dont know how long it will take for the whole transaction and rehab to be done but i am determined to close in on my first deal and make the most while im there!

Good luck!

David Faulkner · Answer

The biggest issue would be lack of market knowledge and network of professionals already established to work with. This is not something you can "google" and don't think it is realistic to waltz into a market you are not familiar with, do a few online searches, and in a month beat out local flippers who have been in that market for a decade or more to a great deal. You may be able to find mediocre deals or pay retail price or find deals that look great but locals know better that it is in a bad part of town, but then you are taking on more risk and won't likely be as profitable.

One twist I think may work is if you pick the same markets to travel to ... then you establish a local network and knowledge in each of those markets. So, say you stay in LA in the winter, then go to Ohio to flip in the summer, or something like that. This however would limit your travels to just a few markets. You could tow a small RV with your work truck to have a place to stay before you find a property, and then park it on the property you find to avoid living inside a construction zone.

Another more realistic way would be just work as a travelling contractor or other professional (eg: insurance adjuster). Or outside of RE, you could start an online business or other remote job and work from anywhere you could get an internet connection. A job in consulting may also accomplish this and have the company pick up the tab for the travel expenses. These may be better suited for your plan and desire to travel.

Peter Vekselman · Answer

@Joshua Manning.....I really like how you think.  you got tons of things going for you.  Having said that, I currently do deals in 3 markets.  I have done them in as many as 12 markets simultaneously.

Each time we go into a new market our ramp up time is about 4-6 months.   As long as you are OK with that then go for it!!!!!

If I can be of further help just PM me.....

Peter Vekselman

Joshua Manning · Answer

@Michael Seeker thanks for the advice. Although I have to say I don't think it would take me 6months to source a deal. I was expecting 2 or 3mo. max. But still I see your point, I may even look into purchasing an RV or a trailer to live in to save on cost. As for the contractors I had never thought of that before, I always intended to do most of the repairs for the home myself. Only hiring out contractors for major problems and such.

Michael Seeker · Answer

@Joshua Manning - this is definitely an ambitious plan and would be a great way to learn a lot from a variety of markets.  My father actually purchased my childhood home from a couple that did exactly this.  They bought really blighted properties, fixed them up and lived in them while doing so and did most of the work themselves.  I think they lived in the home for 12+ months or possibly even 24+ months for tax purposes.  You might want to consider something like this.

One thing I've found from dealing with contractors in multiple cities is that it is very difficult to find good ones and that will do quality work, show up on time and not price gauge you.  To do so with no background in it and in multiple cities would be a tall task.  It's also very difficult to move to a new city and quickly figure out where to target and find a deal.

If it takes you 6 mos to source a deal and another 2-3 mos to find contractors to get started, you'd be looking at a lot of nights in an expensive hotel.

While this may make for a great experience, it's not likely that you'll make much money doing it.

Bill Richard · Answer

Choosing the right person to leave in charge is one of the biggest problems. They need to not only be aware of how your system works but also be experienced in construction and remodeling because there will likely be plenty of that. Remember that you will need to pay them VERY well (from the profits) or they will soon just do the same thing and be your competitor. Look for a middle aged family person who is a real estate sales person, preferably a retired contractor or  with a spouse who is one. They will make money on the buy side, the sell side as well as the remodeling side. Look for someone who wants to make their money through selling real estate, not a hustler who will duplicate the system and take deals out from under you.

Expect problems, especially in the beginning. It  takes a while to get the right members in place. Having backup members is recommended. It keeps everyone on track and because things happen-sickness, vacations,retirement, quitting and more.

Get several financing sources in place early.

Remember -the first or second time you don't or can't deliver or do what you say, your team will leave/quit.

Joshua Manning · Answer

@Bill Richard Thank you for your advice you don't know how encouraging that is for me to hear. If you don't mind me asking who would you leave in charge of finding more properties for you to buy and coordinating the efforts of your team while your gone? I would assume it would be the real estate agent, and if that is the case would you formally hire them as member of your business, or is it more like your just partnering with them and the brokerage?

@Peter Vekselman Thanks for the encouragement and advice. I'm curious to know what your mean by ramp up time? Is that the time it takes for you to find and finish a deal, or is it the time it takes you to get used to the market?

@David Faulkner that is an interesting idea, and I think I would rather travel to a fixed circuit of places rather than a try to find a more obscure way to travel ad work. I'm really hoping BP will come through for me though in some ways, who knows I may be able to partner with an investor in another area for a deal or two to just try and get used to the market before striking out on my own. And the RV also really appeals to me lol.

@Kenny Oliver That's awesome man, I wish you the best of luck. I don't know if you would be interested in ding this but you could start an investor diary about your experience as well. I for one would love to see something like that.

Traveling House Flipper Idea - Thoughts, Criticisms, Advice?

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