Rehabbing / Flipping Part-Time?

Question

Hey everyone,I have a discussion topic that I would like some input on. My wife and I are looking to enter the RE investor world as house flippers, but we only want to do it part-time. We're both health professionals and make a decent income, so we're more looking for supplemental income and not really trying to replace it. Our question is:Is it possible to be a successful house flipper part-time?Due to our day jobs, we will not be able to oversee the rehab daily unless we go before/after work, or at lunch. In this situation, we will be relying on our contractors heavily to complete the job they were contracted to do. What other options do we have in this situation? We currently have about $30K in cash, but aren't planning on starting our journey until early next year to give us time to research the market and get educated on rehabbing. By that time I'm expecting us to have roughly $80-100K in cash. We live in and are planning to rehab houses in the Dallas/Ft.Worth (Texas) market. Thanks.

Tom Hurford · Answer

Hi @Ali Dawood . Just to start, you've already made the best decision you can by taking the time to get educated and create a plan before jumping into your first flip. While gaining your education, I suggest finding the right GC for you. One of the keys when you get started with your first project is to buy a property that is a simpler rehab and in an area close to your home or where you can visit the project frequently. Once you choose the geographic area, you'll know the rehab type for the area and then you can begin interviewing the right GC's for the type of work you'll needSecondly, I believe you absolutely can do this part time. Many people don't have the luxury to do this full time right out of the gate, so it can be done! It will take a detailed system to plan and monitor your project so that you can be successful and finish on time and on budget out of the gate. I would suggest checking out an education system that teaches you not only when to work with a GC, but from starting, running and growing your house flipping business the right way. You should not have to spend a fortune for this education. Good luck.

JD Martin · Answer

Definitely possible but you need a good project manager. Whether that's your GC or someone else, time is money and subs can't wait around for decisions to be made or materials to arrive.

Manolo D. · Answer

Ali Dawood Completely doable. I suggest taking a small hit on the first one, lesser profit, be prepared to pay for some real estate learning tuition. If you are saving 50-70 a year, it won't be as bad. Construction, especially in less regulated states like Texas, has a higher risk of non-performance. Why not be the bank (aka private money lender) and learn from the side first?

Mateusz Prawdzik · Answer

@Ali Dawood My recommendation is to not read books on rehab estimates because prices within the mile change. I know people 40 mins from where I do most of my work that pay x2 as much as I pay for Plumber connections and electricians. Trust me when I tell you, go hands on. Stop reading and just do. Doing is more effective. You might screw up and lose money but you'll LEARN so much quicker that way than not losing anything and just reading some text in a book. I know because I experienced losing first hand. Please just connect with me if you have any questions about anything that has to do with construction, managing, or if a contractor gives you an estimate, I will let you know what I think is good or bad about the estimate and what questions you need to ask him with regards to the estimate that he sent you.

Kuba F. · Answer

Hey @Ali DawoodI'm late to the party, but to answer you original question, it's definitely possible. Most of my flips have been remote where I've never actually set foot on the property. You don't necessarily need a project manager, as you can still do that and delegate to your GC and realtor. A great team is absolutely key. Finding that great team might take a few tries however. The other problem of course is that there isn't as much upside with more people involved.

Nikolas Ferreira · Answer

@Ali Dawood pretty much yes, im upfront about the fact that i have one that im currently working with and if there are any issues i will reach out to them, granted they might not be available when i need them and thats why its good to have more than one

Ali Dawood · Answer

@Nikolas Ferreira Sounds like it's not all fun like they show on TV, huh? haha What's the conversation like for your backup GC's? Do you just let them know that you're currently working with someone else and if it doesn't work out you'll be in touch with them?

Nikolas Ferreira · Answer

@Ali Dawood, the last 8 months or so have been crazy! we havent had anyone leave but we have had people not show up when they were telling us they were there. texted the GC and asked how it was going he said everything is fine we are moving right along so later in the day my partner stopped by only to realize they never even showed up. It happens. and its all trial and error and recommendations from others. we used one that we met a Jet Lending event bigger company had a little tent set up. WE WILL NOT USE THEM AGAIN EVER!! used one that was referred by a friend and that wasnt all that we thought it would be and now we are with one that was referred by one of our realtors that sold some of our flips. so far its going well but we already have 2 back ups just in case. always have a backup

Ali Dawood · Answer

Thank you for your replies. I'm glad to know that rehabbing will be feasible and profitable on a part-time basis. When it comes to project managers - how are they typically paid? Flat fee? Percent of selling price? Do most project managers work on multiple projects at the same time - meaning working with me and another investor's project at the same time?@Nikolas Ferreira Sounds like you guys had a great 8 months! I have been reading some sad stories of contractors leaving projects mid-construction lately on BP - how did you and your partner determine which contractors to use for your projects?@Mateusz Prawdzik Thanks for the advice. And I'm definitely planning on learning as much about rehabbing as I can for the rest of the year. I have J Scott's book on flipping houses, I need to order his estimating rehab book, I also have the book called Flip, and I bought 3 house flipping courses on Udemy for $10 each. Some resources may be better than others, but I'm definitely all in! If you have any recommendations please let me know.

Mateusz Prawdzik · Answer

@Ali Dawood It is definitely possible just needs to be coordinated in your schedule. I manage all the jobs full time and don't hire a GC, you always have to be there if you are doing it that way because you never know the kind of stuff that will need your attention. If you are hiring a GC, make sure that you are paying him for the work that he did and the materials, that's it. Don't pay anything up front and make sure you keep an eye out for anything he does and/or DOESN'T do. If you are looking to learn anything about the flipping process as far as the nitty gritty goes, definitely allocate more time to it than less time. The more you know, the less people can play with you, and the less people play with you.... the juicier the return.