hm.. I like to ask myself a few key questions:
How much education do I truly have?
Look at it from an objective standpoint, as in tally up the exact number of books you've read, videos you've watched, etc. Although it is possible to become educated in real estate without utilizing books, being well-read on books does go a long ways to increasing the probability of your success. By "well-read," I'm talking about numbers of books in the double-digits. Again, it's not required, but it helps if you want to be secure.
How much networking have I done?
Look at it from an objective standpoint as well. What is the number of people you've met in real life? The number of people you've met on here? The number of people you've met in other related RE groups like a local REIA? Consider the quality of your connections as well. Having connections just for the sake of connection is always nice, but take a good look at who you know that actually has the solid experience to back you up if you get yourself into a sticky, confusing, and/or otherwise undesirable situation. The more support you have to fall back on, the more secure you can be.
How well do I know this market?
Real estate circumstances vary noticeably depending on the condition of your particular market. To truly understand whether a deal is good, you need a holistic view of what's going on in the market. Take the time to really research the market in-depth. If you're not sure how to do market research, make sure to look into the various methods people use to get a good grasp on markets.
Do I have my relevant team members assembled?
This relates to networking - it helps to have your relevant team members assembled ahead of time, rather than trying to improvise them in the middle of the deal. Especially for flips, having a great contractor is pivotal. Bad contractors will drag the project on and cost you many unneeded expenses. Having a great agent will provide you guidance along every step of the deal. Bad agents will just be lazy, complacent, indifferent, and/or otherwise headaches to try to work with. Some other worthwhile team members to evaluate include mentor, mortgage broker, handyman, escrow agent, property manager, inspector, appraiser, etc. Maybe an accountant as well, but that usually comes later down the line when your business is well-developed.
Where will my financing come from?
It doesn't matter how good a deal you find if you can't actually get your hands on the deal. You will need some way of obtaining the money to put down for the deal. In some cases you don't have to put down much, or even any at all. That would be using "creative financing" and OPM (other people's money). How much money you put down, interest rate on borrowed money, and etc many other variables, depends all on the terms of your financing. You don't have to have every detail worked out, but it helps to have some general sense of which direction your financing will take, because financing will be required no matter what (unless you fund 100% of the deal with your own cash, but I'm assuming you don't have that means since you're just starting out). As an example, I rather like the FHA loan. It has a very low down payment of only 3.5%. However, it does have a limitation in that you have to take up residence in the property you finance with it. So those are some of the terms to consider in using a FHA loan as financing.
What is my plan?
Take a look at the overall picture of your plan. What are your short-term and long-term goals? How much risk can you afford to take? Where do you see yourself in the next few years? Where do you see yourself many years down the line? How much time do you have to work with? How much starting capital do you have to work with? What sort of properties are you interested in? What is the your target market (sometimes called "farm")? How do you intend to get financing? These are examples of some of the questions that should already be answered in your business plan. If you don't have a business plan, it is highly recommended that you craft one. It's not impossible to succeed without a plan, but it would be like trying to run to the finish line in the dark, hoping that you don't collide into obstacles or fall into a trap on the way.
What are my exit strategies?
You mentioned that you'd like to flip with your partner. While having plan A succeed is ideal, reality will not always conform to your expectations, which is why you need to have plan B and plan C in place just in case. If you aren't able to pull off the flip, could you possibly rent out and hold? Renting and holding would allow you to "weather out the storm," and maintain positive cash flow until a great opportunity arises in the future for you to flip it. Another exit strategy to consider is to apply seller financing, where you take a promissory note and have the buyer of your property pay you back in a steady stream of income over time. An advantage of this strategy is that you can charge interest. Trading up the property with a 1031 tax-deferred exchange is also a possibility. As the name suggests, doing so allows you to defer capital gains taxes.
And finally..
How confident do I feel?
This is self-explanatory. If you don't feel confident in what you're doing, chances are you're not good to succeed at what you're doing. Let your intuitions guide you in terms of when you feel that you are ready.
Whew.. it took me a while to write all that, but hopefully it helps!
