New Investor Needs Advice! Wholesale or Rehab/Flip

[Mimi A]

Hey Everyone,

I have been wanting to start my rei career for some time, but some circumstances stood in the way. Anyways I want to take a chance.

I was doing some research and I found a house that seems like a great deal. So....

Its,in San Diego,CA in a nice central area
3/2 about 1700sf for about $135 sq.ft and the area sells for on average over $240 sq.ft so its seems like a great deal for a flip. Its also through Fannie Mae, so what should I do...I dont have alot of money either, please let me know what I can do, I really want to take some action and risk!

Thanks,
Mimi

[James Vermillion]

I am a little confused by your question...you are asking if you should wholesale this property or rehab it, right? You go on to say that you have very little money...so how is flipping even an option unless you are able to get a loan (in which case you would need money for a down payment), or you partnered with someone (which is unlikely since few people are looking for partners with zero experience). It looks as if your best bet would be to wholesale this property, but you are going to need much more information and some knowledge before you jump into wholesaling, otherwise you will ruin your reputation in a hurry by presenting bad deals to potential buyers (you reputation is all you will have).

My recommendation would be to slow down. I know you are eager to take action and are ready for risk, but in my opinion you have very little to gain. The action you should be taking is to start learning. Start figuring out what properties cost in your area and what causes differences in value. Start looking at renovation costs in your area (get with some experienced investors and start learning from them). Find a local real estate investing association/club and start attending meetings. Ask questions, network, and learn!

I, of course, do not know your entire situation, but I have seen a lot of people dig themselves into a hole by being too eager to act instead of learn. I can’t think of too many jobs where you would go in untrained and perform well…real estate investing is no different.
Good luck!