Flipping while working a full time gig.

[Ken Jones]

Greetings BP! I'm a newbie flipper and I'm looking for advice on: 1. What should I expect from my agent ( and vice versa) while looking to view properties given my full time gig. 2. What's the proper approach to buying and rehabbing a property while working a full time job. I have identified a general contractor that I have a good feel for and we've met and talked. Plus the quality of the work looks great. I plan to visit the project daily after work. But I'm not sure if that's too much? Not enough? Just looking for the insight from any of you who've worked a full time gig while rehabbing your 1st flip. Thanks..

[Shiloh Lundahl]

I also work full time so I had to build a team of people I trust in order to do real estate. Networking with other investors can be a good place to find a good GC (on BiggerPockets or at a local REIA). Having a contract with the GC can also be good. One that includes the bid and timeline. On my team, if one of the subs didn't get something done, and it needs to be done by a certain time, my GC is at the property doing it himself. Whenever there is a change order (something that wasn't originally spelled out in the original bid) have the GC update the bid and timeline. You will want to get a GC that can walk properties when you are in the inspection period so that you can back out of the purchase contract or adjust it according to what you didn't know was wrong with the property. In the contract you can include bonuses for completion done before the deadline and reductions for each day it is not complete after the deadline. It is also good to get multiple bids until you find a couple of contractors that you like and trust.

As for finding a good realtor. This is one of the keys to my business. You don't have to work with just one realtor. You can have several that you work with. Each realtor can be an avenue to finding deals. With that being said, I partner up with my realtor and he has become one of my best friends over the past 2 years. I have reached out to several wholesalers in my area and I get 5-15 emails a day from them marketing their deals. Some deals work for me, most don't. I send the deals that look good to my realtor who will find the ARV for the property (I also spend about 20-30 minutes each morning looking on Realtor.com or Zillow.com for any new properties that have been on the market for 1 day so that I can be the first to make offers on them).

Have your realtor find the accurate ARV. If it is a flip deal, we times the ARV by .93 (this takes away the closing costs, 3% to the buyers realtor, 3% for concessions or BINSR items, and 1% to the title company - by the way, you should find a title company that gives discounts to investors). Then we subtract estimated holding costs for 6 months which can be between $1500 and 3k or 4k depending upon the property taxes, insurance, utilities, HOA, and other holding costs. Then we minus the hard money costs (origination fee, any points, and percentage rate for 6 months). Then we minus the estimated rehab costs and the purchase price and closing costs when we buy the property. This will give you the total profit. Than, rather than taking a commission, we split the deal 50/50. If that number is lower than you would like it to be than you will probably want to offer a lower amount. Once the purchase price is found, the realtor has his assistant create the offer and she sends me an email to sign it. We usually offer on 1-2 properties a day and get 1-2 properties a month. In other words, we look at about 100 "deals" plus scroll through the new listings that come up on the market, make about 20-40 offers, and get 1-2 properties a month.

Another team member you want to have a relationship with is a hard money lender who can fund your properties in a week or less.  Since time is money, the quicker you can close on a deal, the more advantage you may have over another buyer.

Because I work full time, and I travel back and forth from Arizona to California each week, I can't get to the properties and oversee them.  My realtor partner does that as he is out and about doing showings for his clients.  I also have my contractor send me pictures of the properties each week to oversee the construction.  

You may want to be more part of the renovation at first so that you gain experience.  But once you create a system that works for you, then you can dedicate most of your time in real estate on the most profitable parts for you and you can delegate the rest.  Once your business gets busy enough, hiring a part-time assistant will be the best move you make.

Hope this was more helpful than it was long-winded.

Good Luck.