A few newbie rehab questions.

[Aaron Herman]

I started in the rental business by neccesity about 5 years ago because we couldn't sell my Wife's house once we got married and decided to rent it out. We recently purchased our 3rd rental and our trying to learn and grow as we go. I would like to do our first flip but need a little guidance. Are most rehabbers marketing, setting up websites, calling on leads, etc. or can you still make decent profits buying the right properties on the mls and rehabbing them? If you can make it using mls listings how do you appraise if you're only doing cosmetic improvements?
My second question is funding. When you did your first flip did you use hard money, private lenders, cash, conventional?

Thanks in advance.

[Danny Day]

It really depends on your local market. Many times over rehabbers on here have said the best place to find the best deals is on your own.. "we buy houses" signs, mailers, etc. This might not be the best approach on your 1st deal though. Finding a good RE agent who can tell you the ARV (after repair value) will be critical in your success , as well as how fast they can sell the house. Tap into local wholesalers and get deals from them. They will make some $$ on the deal but leave enough for you to make a profit.

What I've heard on funding is on both sides of the fence. Some would rather pay cash out right and rehab / sell and pay no interest. Others would rather pay very little down to increase their ROI (return on investment) by using hard money. Typical terms on hard money range from 9-15% interest rate on a 6 month - 12 month term, ranging from 0-5% origination. These lenders might require you to have X$ worth of assets, liquid cash, or others. I wouldn't fund a rehab/sell with conventional financing, no point if you're in and out in 3 months.