1st Fix & Flip Advice

[Scot Evans]

Hello BP Friends,

After reading and listening to many BP Podcasts episodes I've decided that I am finally taking the first step into my real estate investing journey. I am looking to invest in my "backyard" in the Atlanta Metropolitan area. I have ran the numbers on a few potential single family one story 3b & 1-2.5/ba properties and they all have potential to do really well after calculations. I am seeking to use Hard Money to fund. The only experience I have in investing is the purchase of my current residence which was newly constructed using my VA Loan. How should I approach a potential Hard Money lender to back these deals with little experience? I am confident they are great deals just skeptical of my approach to the lenders. Any advice would be greatly appreciated especially if you're a contractor, local investor, lender, agent, etc.

[Curt Smith]

Scott, Please please find a local mentor!!!   Join the local REIAs, which is where more experienced folks hang.   I have gotten into new folks first flips after they where in contract, even after closing and found they lost money NOT made money.

A 3/1 punch out to a 3/2 even with NO exterior walls moved/roof extended has exceeded $90k (easy) and you may end up more then $90k (for a 3/1 into a 3/2).   Only $15k or so less if same floor plan 3/2 --> 3/2 but new everything.

Rule of thumbs;  10% cost of sale not 6%, sellers have to cover buyers closing costs is std practice.  Higher rehab costs then estimated and cost of cash is higher then expected not only due but other issues due to rehab taking months longer then planed.  Holding costs aren'ed considered.  many oops and cost over runs..

Please get some training and a mentor. REI especially flipping is a team sport.

The REIA I ended up keeping aftrer joining them all, is GaREIA and they have a Northside flipers group and an Intown rehabbers bgroup where you meet other flippers, an email list to get contractor referals.

I just got a flooring (LVT) quote 2.5x higher then my last rehab.  $5k going up to $13k for just 1300sqft (including quarter round).   Of course this forces me to go to plan B and buy the LVT from Dalton myself and hire the installer myself...  All adding to my work and PIA!!!   Just FYI, re what additional hassel is in play and ways where you'll loose your shirt.

Good luck, curt