Justin, getting into any new sector will seem overwhelming and you'll always feel like the dumbest person in the room for a while but that is ok. You can get a decent education here pretty quickly. Utah is an upper echelon market generally speaking. The distressed houses will be 250k+, I don't know for sure but I did look at setting up a network in Salt Lake City a few years back and I remember the price to play being very high and it was a competitive/active market with a ton of cash transactions.
The minor leagues to this REI thing is:
1) Get yourself ready by opening an LLC. These loans will be Biz to Biz loans, not Biz to individual. You will come across lenders that will let you close in your name, but it's rare. Remember, anyone in business for themselves out of an LLC in this country has to pay a 15% self employment tax. This goes for people that flip as well or make short term gains in RE. To avoid this you file with the IRS to be designated an S-Corp for tax purposes. An S-Corp can have employees as W2 workers (which are the owners) and they can be paid by company check and now they just pay their normal taxes, they are no longer "self-employed". They are an employee of the company. Talking to an investor who is a lawyer and an investor who also is an accountant is SUPER helpful. There's a few of those hanging here.
2) Credit and Capital. The dreaded C - C. I know what the podcasts say, and yes, you can find private money ...maybe. I mean but really with no track record, who will lend you their private money? If you have a rich uncle/brother/parent then borrow 75k from them. With 75k you can buy in the 90k - 120k range with financing and safely cover the costs of the project with a cushion. A deal like that will cost 30k to close, maybe 10k -15k deposit to contractor, and maybe 10k in holding costs. And if you have the credit and the capital, even as a 0 you can play.
3) Let's say you get 1 and 2 set-up. Great. You have a brand new S-Corp and 75k is parked in its bank account. Now you need to build a team. Who is going to find, analyze, sort, cherry-pick, and send you the creme de la creme? Who is going to coordinate all the subs/procure all the materials/manage the rehab team? Who is going to sell this beautiful new house when it is done. Who is the agent with an endless reach on buyers? Getting a team of strangers to work in unison is difficult and then you have an expiration with people. If your agent or GC underwrites three deals for you and then you pass on all three, guess who is not getting their phone call answered any longer. In this biz ppl view their time as money more so than others.
4) Let's say you get through 1, 2...and 3! You have the brand new S-Corp are filed with the IRS, you have 75k just sitting in the account, and now you have the team. You have a property funnel coming in, a GC on call to visit sites and provide estimates, and you have your exit agent with his big white teeth ready to market the property everywhere. Now, you gotta make a move. You have to act now and hope the agent underwriting for you isn't off in his calculations, you gotta pray that the GC can do a good job in the time he said and that he can get the job done to the quality of the comps we need to be at, and you can only wish that the exit agent ain't lookin to list and then reduce big and make the sale easy for him and he can just collect his 3% and hit the beach in Florida. If anyone of those team pieces fails, the entire process fails.
This can be done and it can be done well and be profitable, but there is a secret sauce to the BRRRR and if you do not know what it is and you're in the arena just playing with fire then you will get burned, but on the other hand show me a fire handler with no scars so it works both ways.
Good Luck, if you have any questions do not hesitate to reach out.
