New to this industry and looking for advise

[Jason Mathews]

Hello, I’m brand new to this page and was needing some advise from the pro’s. Looking to get into Property Investing and know enough to know I don’t know sh*t.

Here's a little on my background. I was a General Contractor back in the 00's Specializing in Handyman type and small construction (Kitchen and Bathroom's, Fences and Decks). I also had an account with HUD homes where I would go into Repossessed homes and cleaned them out to prepare them for sale on the open market. That made me realize I wanted to get into real estate investment. These types of houses were CASH only, but there was LOTS of money to be made in them. I'm not afraid of a good project and am pretty good at estimating the costs involved. I rode the market till it crashed on 2008 and when people stopped using their houses as ATM machines, my business dried up quick. Having a pregnant wife and a failed business, I went back to Auto Sales which I did before I was a GC.

Currently I’m in the banking side of the Automotive industry working for a captive lender as a dealer rep. I making a 6 figure salary which allows the wife to stay home and raise the kids. I’m currently in the process of paying off a couple of fatty credit cards and saving up some cash to get into this business. Starting out by flipping houses and eventually getting into rentals and passive income properties eventually allowing me to leave my 9-5 job.

Here’s the start of the Idea:

locate and buy flip houses where I can do the work on myself and also new build construction. I have an eye at locating the REO properties and have found a few over the last few years in my neighborhood. Also, New Construction is HOT in my market and feel very confident I can manage a project like that with my background. I currently live in the Phoenix Arizona market and we're seeing some major growth here in the past 4 years. I have ZERO clue how to access capital other than a convectional Mortgage and those REO properties are typically CASH ONLY, this is a MAJOR problem. I have ran into Hard Money loan guys, but their 14/4 (interest/origination fee) ratios are nothing more than predatory if you ask me. I'm pretty savvy with loans, since thats what I'm doing currently and also have Mortgage background. I know I can lose my butt quick with reckless loans like that, the whole point is to make money after all, not pay it all in interest to a loan shark. Plus I'll be doing these projects on the evening and weekends so I can't flip them as fast as I could if I was doing it full time, another problem. Since I have that debt and hold the only income for my family, I currently don't make enough to carry two mortgages till those are paid off. At least I don't think so.. I have some equity in my home currently ($80K), but would like to not tap into that if at all possible. At least till I know what the hell I'm doing, I don't want to lose it.. :)

I’m researching hard right now while I’m saving and paying off debt and would LOVE some tips/ideas from the pros. Maybe someone was in my situation and has some ideas, I’m currently not thinking about. Sorry for the long post, I wanted to paint the exact picture to get the best information possible…

[Wes Johnson]

@Jason Mathews I think you've got some advantages that would help you for sure. You've got construction experience, you've got finance experience, and you've got a high paying W2 that will allow you to ease into this business.

But...

My fear for your is if you try to manage the flip yourself while trying to juggle your W2 and your family, something will give. You're going to spread yourself too thin and put your family at risk. Either the flip won't have the on hands management it needs from you thereby making it a less than successful venture or you're going to neglect your family. And in the end isn't more time with the people we love the whole reason why we all are trying to do real estate in the first place?

I get that you don't want to use hard money and that's fine. Fund it all cash if you want. But if you're going to use all cash and therefore gamble large sums of money at least promise me you won't try to juggle family, a flip, and a full time job. You need to turn over some of that control to an experienced GC who can manage the flip for you. I'd still recommend going to the site 2x per week but the flip is going to need someone there full time ensuring things go right

I'm a control freak and very meticulous about my money so I get it. But until you're ready to do this full time don't try to wear too many hats. It's just a recipe for either a failed business venture, a pink slip from your boss or divorce courts. Something will give if you try to do this all yourself. Hate to be so grim but I want you to be aware of what you're up against.