Beginner House Flipper

[Seth Bollinger]

Hello everyone! I am very new to this site and the community as a whole so please be nice as I am just trying to learn. I really want to get into flipping houses if not at least working on the in my own time, however; I am worried about the time and money aspect. A good friend of mine and I took up an armature landscaping company last summer and I really enjoyed it. Along with the usual bush and grass jobs people would have us do house cleanouts, cleanups, and basic maintenance, so I know that I would not be totally jumping into unknown waters. Does anyone have any basic or in depth tips or things that will give me progress in the early stages of me working this out. Like I said I am only trying to gain information and anything is helpful, Thank You!  

[Seth Bollinger]

Also it wouldn't let me type it in, but I reside in Peoria, Illinois.

[Katie Smith]

Hi Seth, I'd be happy to hop on a call and go over some basics with you. You mentioned you are worried about time and money. Do you have any capital to put into a deal? Lenders will require you to have some skin in the game. If you're looking to do a fix and flip - you'll need to come to the table with at least 10% towards the purchase price + closing costs. Cash and credit are key when it comes to fix and flip loans.

[Seth Bollinger]

Quote from @Katie Smith:

Hi Seth, I'd be happy to hop on a call and go over some basics with you. You mentioned you are worried about time and money. Do you have any capital to put into a deal? Lenders will require you to have some skin in the game. If you're looking to do a fix and flip - you'll need to come to the table with at least 10% towards the purchase price + closing costs. Cash and credit are key when it comes to fix and flip loans.

It really just depends on how much I can pull together, I'm really trying to find a nice small house, but at the same time isn't like basically at the state of being condemned. How much would you say is a good number to think of when doing an initial house investment all costs included. The time thing is mostly just my hours, I work 3rd shift 10 PM to 6 AM and have weekends off so my hours awake are very odd and depend on the day as I do tend to work overtime a lot. 

[Bill J Fay]

Welcome! BP is a great place to start. Start attending local real estate meet ups in your market. You are going to want to talk to as many people in your market as possible. Create a team of agents, contractors, and lenders. I would recommend using an Agent that also flips. They will be a great resource to guide you in the right direction.

[Jon Mitchell]

Hey Seth! Welcome to the community. I'm in the Tampa area, so I don't know anything about your particular market. However, the process does seem to be pretty similar across the board. 

The very first thing you should do before getting into any sort of real estate investing is to learn your local market. Learn about real estate before making costly mistakes:

1. Narrow down your desired home (seems like you have that done already).

2. Learn about your individual local markets based on your desired home. Search for areas via zip code or neighborhood. You should be able to easily search homes that have been sold and that are currently listed on Zillow or Realtor.com based on your criteria. Learn about the prices they typically go for, and how long these houses stay on the market. *Days on market are very important when flipping. 

3. Evaluate your days on market: As you do your research, you'll see what kinds of homes sell the fastest and the slowest. The ones that sell the fastest are the ones you want to pay attention to. Study those homes and see what features they have and their floorplans. Open concept is popular in Tampa for example. Little things can make a big difference as far has how long a house stays on market: school district, lot size, age of the home, flood zones (avoid) etc. 

4. Conduct off-market research: Targeting motivated sellers is the pillar of being a successful investor. Once you have found your desirable layout, evaluated the days on market for those homes, and learned about the market prices, start doing off-market research on homes similar to what you want to invest in. Typically, I look for at least 50% in equity from the start in order for me to even consider it. 

Those 4 things will get you started. Its not a be-all say-all approach, but it will get your feet wet as you progress. 

The next thing you want to consider is how you plan on getting these deals. Wholesalers are great resources since all of the work is already done for you. Wholesalers are already in contact with the homeowner have already gone under contract with them. Wholesalers take that original contract and will assign it to and end-buyer (you) for a small fee. You then take over and close with the homeowner. It's called an Assignment of Contract. Review your state laws for this. NOTE: Always do your due diligence before signing a contract with a wholesaler. Not all of them are honest people. 

The other option is that you do everything yourself. You create your own business image and branding including advertising. Direct mail campaigns are very much alive today and are quite successful if done correctly. With this strategy, you initiate contact with the homeowner, go under contract, and you can either close with them and buy the house yourself, or you take on the role of a wholesaler and assign the contract to another investor. 

Hope this helps! This is general information. We can always talk specifics later. 

[Jacob Sherman]

first thing would definitely be to connect with a realtor to start researching areas that you're interested in investing . Then would start the search for a reputable contractor 

[Anwar Nasir]

Seth first you need to determine which strategy you want to pursue such as wholesale or go the retail route because cash or credit may not be an issue.

Then gather contact information such as who the property owner is, contact them and get it under contract. Once you get it under contract you can simply sell your interest to another investor. This method cost you nothing.

This is a good starting point to build investment capital while you learn.

If you plan to buy and hold or rehab and flip, then you will need either investment partners on conventional funding sources. That route can get expensive.