About to take the plunge...

[Mike Garland]

I am a new member to BP and have not done any real estate investment deals.  I have experience financing them at the Bank I work at, but that is it.  

So I was visiting with a real estate investor acquaintance over lunch a week ago about wanting to become an investor.  We talked about the ins and outs and she informed me that she was going to wholesale a deal that came her way because she did not have the time to rehab the property.  

I told her I was interested in looking at the deal.  We met at the house which had been vacant for about 4 years.  It is a 3/1 and it needed work.  She was estimating about $15k-$20k in repair costs.  We walked the house and she explained that she was going to prehab it over the weekend (this coming one).

The property is not near my work or home, but in the same city.  It is lower middle class but the area is experiencing growth.  

I decided to meet with a real estate agent a few days later to discuss my plans for starting real estate investing.  I had already convinced myself to not do the deal on the vacant 3/1.  My agent recommended that I not discard it yet.  He said he would run comps in the area as well as introduce me to a good general contractor.  He recommended that because of the location, that a flip would probably be the best course.   The GC called me later that evening and we spoke for about 30 minutes discussing his experience, the project and other items.   

So now the plan is to meet at the property next Thursday with the GC and the agent and look at what needs to be done as well as various options.

I am definitely feeling the butterflies but in a good way.

I am still trying to decide whether to use my own cash (I have just enough) or to use other financing. I know I need to lock down the financing decision soon.

I am also in the process of reading "FLIP" and it is giving me a good base understanding of the process.

Will keep you guys posted.

[Robert Smith]

@Mike Garland be careful what you read about other people estimating costs on rehabs. I think you are probably on the better end of the labor prices but I know that a true $15k flip in my area is extremely rare. Costs can vary drastically from one geographic area to the another. I would love to be able to help you with estimating the costs once your GC gets them to you but I don't think prices in my market are going to be anywhere close to yours. Even still it wouldn't hurt to post the big line item prices and see what people think. 

As already mentioned, remember, everyone wants to create the most income for themselves via your pockets so be careful. Make sure you visit the site regularly, and don't give the GCba bunch of money for startup costs!

Best of luck!