Need advice: Where to Start (Flipping and Rehab)

[Meagan Maestre]

Hello, everyone!

Just a bit of background information:

A few years ago, I inherited a beachside duplex from my grandparents and was finally able to start my dream of real estate investing. Only one thing got in my way: my brother. It was very hard to convince him that we should keep the property and generate income with it, but I managed to keep him on board for 3 years. However, he recently got married and I’m currently pregnant. He fought me to the point where I could no longer properly manage the property (I was doing all the work, he was reaping all the benefits), so I agreed to sell it and split the profit with him. This is where we differ. He wants to put his $200k profit down on a huge fancy home (to make his wife happy, I’m sure) and pay a mortgage while working a 9-5 the rest of his life. I want to purchase a small, first-time home for around $100k and slowly increase its value while using the rest of my profit for investment.

My boyfriend works in home renovation. He makes enough that I don’t have to work. He also shares my dream of investing in real estate. We want to start by flipping homes because he can do it all, maybe with the help of a friend or two, and we can save tons of money on labor while we’re still trying to get our foot in the door. Meanwhile, we’ll also be renovating the home we purchased to live in room-by-room to slowly increase the value of the property so that when it’s time to upgrade, we can sell and still make a profit on that same home.

So here’s the thing (or the things):

We have a real estate agent who is helping us with finding a property to live in, and I also would love to work with her for the flipping business, too, because she's amazing. I do wonder if it would be worth it for me to study and become a certified real estate agent and maybe save a bit in regards to commission and such. I know I'd have to join an agency to gain access to MLS, though, or pay out of pocket, but I don't know. It's something I've been considering since I have nothing better to do while at home.

We want to start with just one home. We’ll have around $70-100k to start with and I won’t be seeking financing. Is this okay? I’ve heard so many success stories of people going in with $50k or less but I also know flipping homes can be a pretty big risk. I want to be sure that when doing this, the worst that will happen is breaking even. How can I be safe going about this? I’m confident my bf knows what to look for before buying an investment property, but I’m not really sure how to do the research on my own. I know there is no fail-safe way to garner profit, but whatever I can do to help prevent losing it will be done.

Any other tips and advice are appreciated. I’m really excited to finally start this journey now that I don’t have my brother weighing me down. I’m only 25 and have a lot to learn. My goal is to eventually gain enough profit to purchase multiple rentals around town and gain passive income while flipping homes as a full-time job.

Thanks for taking the time to read this!

[Meagan Maestre]

@Dylan Vargas

Hi! I absolutely thought about somehow getting the money to buy my brother out because we were earning almost 3000 a month and the mortgage including escrow was only about 800 a month (and i have people for repairs so they aren’t too expensive), but the woman who was in charge of the duplex (living trust) while we were too young didn’t pay taxes and let the account accrue an escrow shortage and we started having to pay over 1800 a month just to catch up. At that rate, I’d have to pay 1800 a month plus the loan I’d have to take out to pay my brother for his half (which would be crazy high interest because of my credit) PLUS save for the property taxes for the following year (around 5000) so they didn’t add to the escrow shortage again. I figured that since I’d get about 200k after closing costs and realtor commission and all that other fun stuff, I could just start on my own. I already have experience managing properties and I’ve been learning a lot about renovations (I just can’t do most of the work right now due to the pregnancy), so I’m trying to find the best route for me now while also securing a little home for my little family. I just have so much more to learn now that I’m trying to make a business out of it.

Overall it was a great investment property but its history just wasn’t ideal for me to take on by myself.