All Forum Posts by: Alan Crookham

@Andrea Weule great advice, thank you! I was leaning toward the 80k number too, but I am of course nervous about my first venture into this!

This is probably going to sound like a fake scenario, but this is the real deal! I live in a fairly small town in PA of about 10k people. I am planning to do my first house flip as soon as I finish setting up my newest rental (which will be my second, so I’m a newby still).

I found a neighborhood I really like, and started researching recently sold houses on Realtor.com, and there are three in the neighborhood. Same neighborhood, fairly similar houses, but the sale prices are 40k, 80k, and 175k. All on the same street. I do know that the 40k house needed a new roof, but that is still a massive price difference. How would I conservatively work out the comps in a situation like this?

Thanks!

@Edwin G Cruz Jr Any time! I am not a big player at all right now, but I’m happy to share the little bit of experience I have.

@Edwin G Cruz Jr welcome! I would say take it slow and make sure you have as much education as possible before you jump it. Make sure you understand the legal system in your area for real estate. Then I personally would start small for the experience. My first rental (which I still have) was in the nation of Panama. I obtained and renovated it for $14k, all cash, and have rented it for $300-$400 a month for a couple of years now. With no taxes in Panama it’s pure profit.

I am currently working on buying a second rental property in Pennsylvania once I am confident in the housing market this year. After that I am going to dip my toes into the flipping market. I want to flip a few houses to have the money to invest in rentals. I plan on started small. In PA I can buy a distressed property for about $20k, fix it for $20-$30k, and sell for $60-$80k. That depends on the area of course.

I don’t have that kind of up front money, so I will probably use hard money lenders, which is why I want to start small. If I run into any problems with the flip, since I know statistically first time flippers take significantly longer on their first renovation, I could afford the payments to the lender.

Those are my thoughts!

@Jared Smith personally I have been doing the slow acquisitions, number 1. I am a big believer in not over extending and putting myself at unnecessary risk. However, like others here have said, once there is a really solid foundation in place and you have a strong structure, teams, finances, etc..., you could definitely ramp it up.

@Rashad K. That is amazing! Congratulations! I'm working on getting into BRRRR game myself. I am a baby in this with just one rental property, and working on a second. I want my next to be a flip for the experience and to test the waters. This is inspiring!

@Llewelyn A. Wow! Yes, I definitely need to make a spreadsheet like that. That helps a ton! Thank you!

@Gregory Schwartz thank you! I really appreciate you taking the time to explain!

@Alexander Roeschmann Thank you! That really helps me understand. My first house was given to me by my father in law as a wedding present, so I never had to work out all the math on it. This clears things up for me!

@J Scott thank you for taking the time to explain! Math has never been by strength so I’ve been banging my head against the wall all afternoon trying to figure it out. But that makes a lot of sense. I was thinking of the $100k as all my own money, but the fact is only $20k would be. I appreciate it!