Greetings Investors!

[Michael Linquist]

Hey, 

My name is Mike, I live in Tampa Florida. I'm in my mid 20's and work as a Registered nurse full time at Tampa General hospital. I am getting started with rehabbing real estate properties in the next couple of months, and I am going to need a lot of advice. I've never rehabbed a house before nor do I have the cash to do so. So, this is my plan over the next couple of months. Let me know what you think. 

First thing that I already did is network with a local real estate guru. He buys properties from house auction and then sells them to investors to rehab and sell at market value price. So, he makes profit and then investor also makes profit after putting in work for rehab. 

I'm going to purchase a property from him because it is my first and he checks the properties to make sure there is no 2nd mortgage, Hoa, or other hidden cost....or to not buy a house with something like "chinese drywall" and have to gut the whole thing. So, I will purchase from him with hard money loan and then rehab with hard money loan and sell at market value. He gave me an example that went like this: He buys property for 145,000 and then sells to me for 160,000. I put 20,000 of rehab repair in house and according to comps he showed me of surrounding houses. The house I buy should sell for at least 210,000 after rehab. 

Is this a good way to start? I just am kinda scared of losing money on my first rehab, especially because I'm using a hard money loan. Please reply with suggestions to my plan or let me know how you first got started in rehabbing or flipping houses with no previous knowledge? Thanks :)

[Hattie Dizmond]

@Michael Linquist 

The very polite point  @Dawn Anastasi is making with her question is...this better be your Dad or someone else you're willing to trust with your life, because you're about to put all your eggs in one basket. 

This "guru" (FYI...that term doesn't exactly breed warm responses around BP.) you're talking to...where did you find this person?  Have you checked his references?  Have you actually seen properties he's wholesaled?  (Wholesaling is what you're describing that he's doing.)  What do you actually know about him other than what he has told you?  You might want to do some homework, before you just blindly accept what he's telling you.

Also, there are some really great people and highly successful investors on this sight.  But, I'm not buying a deal from any of them, up to and including Brandon Turner, without doing my own due diligence on the deal.  I'm going to run the comps myself - or get MY realtor to do it for me.  I'm going to run the deal through my calculator and apply my analysis protocol.  I'm going to make sure I walk through the property for myself to validate the rehab requirements.  (If I'm not confident in my ability to assess the rehab, then I'm going to take my contractor with me.)

My partner and I "check each other's work", before we make an offer on a property.  That's a deal that doesn't involve anyone but us, and we double check each other.  Why?  Because anyone can make a mistake.  And, because she sees things I don't, and I see things she doesn't.  It's the same reason there are so many people who post deals here on BP for review.

My best advice to you is to continue to save for your first investment and build your reserves, while you're getting educated. Listen to the Podcasts. Read the blogs & monitor the forums. Get involved in your local REIA and make sure you diversify your information sources. That way, when everyone is giving you the same answer, you can have a degree of confidence in that answer. Only getting the answer from one place leaves you in a very vulnerable position.