High School student flipping houses to pay for college!

[Noah Doris]

Hello everyone!

This is my first post and although I am young, I am not a newbie to real estate. After looking into all forms of investment, I currently have decided to pursue a house flip in South Florida. I have 50k to invest but am looking at houses costing 150-170k including remodel costs. I know the tips and tricks and the basics to flipping a home(buy right, low interest, 70-rule) but I need help in one are: Loans.

What is my best option as far as loans for flips? She was successful in real estate before but in 2008, her tenant stopped paying and her credit got lowered so we need an alternative option to banks. If you can suggest a great private loaner in SF, I would really appreciate it.

Thank you!

[Miguel "Mike" Perez]

Welcome to BP.

Not sure the message is coming across as clear as possible but it sounds like you are a student (or student-aged) wanting to break into real estate with about $50k for a down payment and want to get into a property for about $150k including repairs.

Then there is some stuff about a she who had a bad experience creating credit issues. Maybe a parent or spouse?

There are some deals out there for you, of that I am sure.  However, unless you have a very compelling opportunity and factors that show you will make payments on time today and in the foreseeable future, a lender is likely to pass you up unless you present the opportunity properly and show you can meet the obligation.

There are a couple of folks in the south Florida RE world that I would recommend you reach out to. 

@Lucas Machado: he has deals flying into my inbox pretty much daily and he also offer hard money lending

I would also look at a webinar I remember from Brandon Turner, a VP here at Bigger Pockets.

https://www.biggerpockets.com/webinar

It's not the one happening this week, but it will likely come back around.

It was called 12 Steps to Getting a Bank to Say Yes.

Although I think I counted more than 12 or I lost count. These are my notes and should not be taken as a substitute for attending the webinar.

Here are the notes I took during it.

You need to have these factors wrapped up before a lender will take a chance with you. At the bottom it does account for compensating factors.  For example, if your income isn't that high, but the property cash flows incredibly, this may overcome the fact that your income isn't as high as they would like to see.

12 Steps to Getting a Bank to Say Yes.

1. Property
   1. Property Type
   2. Property Location
   3. Property Condition
2. Loan Amount
3. Debt to Income Ratio (DTI)
4. DTI = Debt / Income
   
   1. Front-End
   2. Back-End (most important)
   3. Relationship between total debt and how much income
   4. All lenders are different.
   5. Usually have two (front and back)
5. Loan to Value (LTV)
   
   1. LVT = Loan Amount / Property Value
   2. Examples
   3. FHA = 96.5%
   4. 403k = 96.5%
   5. Conventional = 80%
   6. Commercial = 70%
   7. Most of the time pre-hab value is used.
   8. Hard money focuses on after renovation value (ARV).
6. Credit Score
7. Repayment Source
8. Income
9. Rental Income
10. Experience
11. Cash Reserves
    
    1. 6 months of payment is preferred
12. Recent Credit Changes
13. Compensating Factors
    
    1. Outstanding performance on one factor can sometimes compensate for minor deficiency in another.
14. Present the Deal Properly
15. The 5Cs of a Perfect Loan Proposal
16. Confidence
17. Clarity
18. Concise
19. Convenient
20. Creative