How to Prepare for a Career as a Flipper

Question

Hello everyone, I am new to Bigger Pockets and this is my first post. My question is about how to prepare myself and gain the necessary skills to flip houses and fix up rentals for a living.

I am a sophomore in college majoring in business management. To be quite honest, every second of it feels like a waste and I constantly wonder if I should transfer to my local community college where I will be just a couple classes short of an associates degree. I have no desire to get an office job and climb the corporate ladder because I get very frustrated when I have to sit inside all day. I am very much interested in the construction side of flipping/renovating and love to get my hands dirty. I am much more handy than the average 20 year old and have undertaken some pretty big fixer-upper type projects with my dad at our house, but I don't know if I have all the skills to flip a house from start to finish by myself. Where do I start? Do I just go all in and get a fixer-upper and learn as I go? And am I crazy for feeling like the bachelor's in business is a waste of time for me? I am not sure if it is realistic or not for someone my age to just jump into flipping homes full time (or perhaps part time) as opposed to getting a traditional job.

Costin I. · Answer

@Timothy Durham Here is my "starting up" collection:

• Finish the school and get your degree - you'll need it later, especially if it's business management.
• Get a job first where you have W2 income.  Save 50 percent after tax income. Find deals in your market.  Buy at discounted prices.  Rehab.  Rent.  Refinance.  Repeat.
• Find a mentor as well to help with the process.
• Doing an internship with someone that is serious about their business, and then making sure that you're just as serious about their business as they are, is an awesome way to gain invaluable experience and support for yourself in the long run.
• Intern with a flipper. Intern with a wholesaler. Intern with Rental Investor. Then decide what you want to do long term. You have a long journey ahead.
• Find a duplex/triplex that needs a little work, live in one unit rent out the rest. Repeat. Do this four or five times and you'll never have to work again if you choose.
• Aggressively save money and buy a Multifamily 2-4 units with 3.5% FHA loan and house hack. Raise the rents to market values and rehab to force equity and sell in 2 years to avoid capital gains. If you decide to keep the property you can refinance into a conventional loan and hopefully you have enough equity to eliminate the PMI/MIP. Then move out and repeat the process.
• I would look for a 2-4 unit too house hack. You can get into these with 3.5% down for an owner occupied FHA loan. Great way to get started FHA makes sure its a cash flowing deal before they allow you too buy. And house hacking allows you to make a little off the property, and seriously subsidize your rent. And lastly, you gotta live like a college kid. Rent out rooms, go the cheap route. Having those cheap expenses will really catapult you forward financially!
• Income from RE investing is slow and boring (in a good way). The RE investing that makes fast money is not really “investing” - it’s a self-employed RE business. For example, flipping, dealfinding, wholesaling, syndicating.
• Boosting your credit score is the no-brainer investment. Go on My Fico and learn the credit hacks. Do them!!!
• [Biggerpockets] is notorious for the no and no money down niche, but you really need to have a good financial runway prior to investing otherwise you will lose your bottom when it goes sideways.
• Read Scott Trench’s book “Set for Life.”
• Read all the usual books. But to be honest with you, If you do not learn some construction skills, your progress will be a lot slower! as contractors will be raking in the majority of your profits.
• Work slave job with W-2 documentation for 2 years to gain favor with banks. Freddy/Fannie conventional loans want to see those 2 years. Keep same job no matter how crappy. It's only a stepping stone to break free.
• While you are slaving, eat ramen, room mate up or live in trailer, avoid Starbucks and tuck every dollar you can squeeze out into a bank account. need 20% down and money for materials. so for 80K home (trashed), you will want 35K banked to get started, just a rough idea.
• Get a pro account on this site so you can access the PRO only blogs and avoid all the goofy stuff that can confuse you sometimes.
• Take NO advice from salesmen such as realtors/brokers. Not because they are wrong, but because they are salesmen.
• Take NO advice from anyone who does not own more real estate than you do. Why chance it.
• Just keep reading, saving, researching your target area. Know the rents! Know the values.
• Then, get pre approved. Buy property. Buy another and another until you have enough equity to refinance one for large amount of cash. Take cash and start BRRRRR process (read up all you can on BRRRRR). Give boss notice. (sorry about all the school time you invested). Your free. Done.

Andrew Faukner · Answer

Despite what you were told in high school, college isn't for everyone. I say that as a recently retired high school teacher. BUT, if you can stick it out for 2 more years, and get that BA, sometimes that degree opens doors for you that you never even realized were there. It worked that way for me. Listen, you want to flip houses, great, but this is a business, and you are majoring in business management. How about this, while you are finishing the degree, keep reading Bigger Pockets, and make a plan to put into place in two years. Need a job? See if you can do some construction work. That will give you some skills, and connections for when you start to flip houses.

Plan B. Maybe you decide in 2 years you don't want to flip houses, at maybe that BA will open some unexpected doors for you.

Plan C. This is what I did. Get the 2 year degree in Bus. Mgmt.  Start work in the real world. I opened a business, ran it for 7 years, never made much money. Closed the business with the shirt on my back, barely. Went back to school, got my BA, started a career, (for me teaching). Then started buying rentals.

While Plan C worked for me, of course, only you can figure out the best plan for you. For any path you decide, I wish you the best of luck.

Costin I. · Answer

@Timothy Durham Both your degree and your W2 job are important. Here are the reasons I consider:

1. You are graduating from Business Management - that should come very handy later because you'll want to build a business and work most of the time on the business, not in the business (read The E-Myth Real Estate Investor). Regardless of the business you'll end up building.

2. Your W2 should allow you to get the best financing possible. And you'll want that to get you started in RE investing. Later, you'll exhaust that option and might have no choice but to get creative for financing. I might be wrong here and this could be a self limiting belief, and you might be able to burn/skip this step, but it requires a different mindset, different approach and experience, and higher risk. I simply think that a few years on W2 will prepare you better for later and you'll also have a fallback position in case things don't work out. If you had an arts degree, then I would probably advise the opposite.

You can moonlight, part-time, weekend play and get your rehab experience. If finishing with a business management degree is worse than climbing the ladder in a construction crew, then definitely there is something wrong with our colleges and educational system. And why you bring in the discussion your friends and their tuition payment? This is not about ranking or competing with your peers.

RE investing is a long term play, slow and steady. Flipping/rehabbing is a job, and often is closer to speculating than investing - don't be "house horny" and attracted like a moth to the promises of get-rich-fast schemes of shiny flipping promoters.

Mel Cosio · Answer

My advise, for what it's worth: finish with at least an associate's degree, and try to latch on with a construction crew or experienced flipper. In flipping, best way to learn is by doing. You might love it, or you might hate it after going through a couple of flips. It sure ain't the same as what you see on tv! You can always go back to college if flipping isn't for you.

Whatever you decide, good luck to you.

Gilbert Dominguez · Answer

I will tell you how I did it. First before, during, and after my military service My dad, uncles and all of theit grown children, my cousins all got into doing construction work. I mean I was exposed to construction job site since I was a kid, maybe 9 years old when my dad started taking me along. At some point I decide to go to trade school to become a carpenter. One thing lead to another and I eventually became a journeyman worker is about every trade you can think of except concrete. I then taught myself how to create construction drawings, that was a breeze.

I believe in 1980 or so I became a licensed building contractor, a GC. There was nothing I did not know about construction, repairing, or remodling a house or any buiding from foundation to being free standing and turn key.

On all of the fix and flips I have ever done I have been my own GC and Architectural designer. Of course I learned to coordinate with structural engineers, the utilities, and city planning and building departments. On occasions when I have to do some basic or detailed research I also learned to work with local assessors officies and realtors.

Stick to it long enough and you will get around to including learning all about lenders, banks, financiers, and private investors or private lenders as they are called now days.

Real estate investing evolves an awful lot of management skills and knowledge so no, I would not say your education in the management field would be a waste of time although project management might be more in line with real estate.

Todd Powell · Answer

@Costin I.  well stated ! Great advice!

Timothy Durham · Answer

@Costin I. Any suggestions on some good jobs/types of jobs to look for upon graduation? Something that will help me develop practical and useful skills while letting me save for RE investment. Management is a fairly broad degree and can land you in a number of places. I know I still have over a year before I begin job searching, but it wouldn't hurt to start getting an idea on where I want to get that first "real job." I am aware that a degree doesn't entitle me to any job I want or an endless list of options, I'm just trying to get a general idea of what I can shoot for. I suppose there is no one path to becoming a RE investor, but I have to believe that some jobs/careers can put you in a better position to get started.

Timothy Durham · Answer

@Blake Luken there is definitely a huge demand for trade jobs, especially as the baby boomers reach retirement. It seems as if an entire generation skipped skilled labor. Do you have any idea what particular trade might prove most useful in flipping a house? Obviously knowing how to do everything is ideal, but being great at one thing wouldn't be too bad either. I was thinking that perhaps plumbing would be the most useful. Electrical work seems like the most complicated aspect of construction to me.

How to Prepare for a Career as a Flipper

Most Popular Reply