Fix and Flip beginners

[Curtis Delaurie]

Me and a friend who grew up together are planning in the next year or so to begin our fix and flip journey. We are both contractors, him being a licensed carpenter and me being a plasterer so we plan on doing a lot of the work ourselves and split profits 50/50. We both work full time but would love to eventually get into flipping full time. We are planning to start our first few properties with cash so we don't get burned on hard money interest payments since it will be after work and weekends we are working on the project. Would love to hear any advise and or stories about your first steps into the real estate investment world and things you wish you could of told yourself when beginning, thanks! 

[Jeff S.]

Sorry, @Curtis Delaurie, but your plan does not sound great in part because of your combined contracting skills. I know you know this, but you will need many more skills and subs than you present. We’ve flipped homes and now exclusively lend on them in Los Angeles. Many of the issues we’ve seen can be boiled down to a few mistakes.

The three greatest mistakes we see are:

1) Overpaying for your property,

2) Treating your flip as a part-time job,

3) Doing the work yourself.

You check two of these boxes. Time is the greatest enemy of the house flipper. At least you understand the issues of borrowing money, though that won’t stop lenders from soliciting you, as you can see.

Lastly, partnerships between friends like this never seem to work out. Someone always ends up doing more work than the other and becomes resentful. But if you insist...

I'm not trying to be harsh, Curtis, and I'm sorry if I'm not telling you what you want to hear. Nor am I looking to "connect and discuss." If you want to get into the flipping business, then give it some priority and don't treat it like others treat their hobbies. This would mean someone working full-time. If at least one of you can't do that, I wouldn’t do anything more than rethink this as a one-off project.