Newbie Wholesale/Fix and Flip Investor Saying Hello

[Jose Rodriguez]

Hello BP community,

I am a newbie looking to get into to wholesale and fix and flips.  I have 3 years experience in the mortgage industry and have great knowledge about bank loans and the traditional mortgage transaction process.  I had been contemplating becoming a real estate investor and much like a lot of people out there, I was afraid of the unknown.  I started educating my self; reading, listening to podcasts, reaching out to mentors, ect,..

I read the book "Quit Your Job in 19 Weeks or Less - The Ultimate Real Estate Investment Blueprint" by Sean Terry and was consumed by the concept of wholesales. Due to the nature of rising interest rates, my income took a hit with this shifting market so I figured there would be no better time than now to jump in full time into real estate.  I went ahead and resigned from my banking position and have taken a leap of faith into the real estate world.

I have assembled a small team a this point.  My fiancée is a licensed Real Estate Agent, her father focuses on the renovation of properties (fixes and flips for investors) and occasionally will fix and flip a property on his own. Both of them are established in their fields but I feel like I can help them and my self obtain long term success in this industry.

I am looking to network as much as possible and learn as much as possible. I have signed up for the AZREIA and will be attending a few meetings in the upcoming weeks.

If anyone has any pointers, tips tricks, or advice please reach out to me. I am looking to grow as much as possible and learn as I go.  I am currently working on marketing techniques for lead generation and will be putting them to the test next week.  If any newbie like my self is interested in comparing ideas please reach out to me.  I would also like to ask any seasoned wholesale/fix and flip investor if my ideas and strategies would stand a chance in this competitive market. I am seeking advice and help from everyone and anyone willing to give it.

I have listened to a ton of the BG podcasts as well as read a few books out there is so much more I can learn.

I look forward to connecting with everyone and am excited for this new journey.

[Rick Stein]

Hi, Jose,

Welcome to the wonderful and challenging world of real estate investing. You are doing well by getting as much education as possible. You can never have too much. Here are just a few tips on wholesaling:

1. Know your numbers. Most "wannabee" wholesalers make the mistake of over estimating the ARV (after repaired value) and underestimating the rehab costs. You are quite fortunate to have a fiance who is a licensed real estate agent to help you with comps and a dad experienced in rehabbing.

2. If your contract is going to read "and/or assigns" you may wish to have a due diligence period in the contract which would give you time to double check your rehab costs and find an assignee. A very good strategy would be to find out what your assignee want FIRST and then look for a property to fit those needs as opposed to finding getting a property under contract and then scrambling to find an assignee. Attend those REIA meetings and ask the members what they are looking for.

3. I personally do nit like "weasel" clauses that allow you to back out of a contract for an insignificant reason when the real reason is you can't find an assignee. It is not fair to the seller. Therefore, I would have some private lenders who might want to finance the project for you so you can buy it. For example, I just closed on a property which I purchased for $75K. It needed $12K in rehab. I borrowed $90K from a private lender at 5.5% for three years. In other words, I was able to borrow the acquisition cost, rehab cost and closing cost (nothing out of pocket) for a property I will rehab and rent with a positive cash flow.

Of course, I do not know your financial situation, but many folks get started in real estate investing as wholesalers because they don't have the cash to do it themselves. Having your own cash is wonderful, but having ACCESS to cash in the form of a private lender or a partner is just as good. Even if you have the cash, why use it if you don't have to?

There are many more points to cover, but these are just a few as I sit here in my "jammies" on a Sunday morning.

I wish you the best of luck!