After years of analyzing deals for clients, I am finally under contract on my own flip, and with no money down. I have been in real estate since 2013, but even before then I was trying to buy from owners who would finance their home to me. I wish I could say that it worked but it didn’t for me. Most owners didn’t understand the whole process of owner financing, and truth be told I probably didn’t either. I believe a lot of owners could sense that, and I contribute to the reason I never got someone to owner finance.
So after several offers being declined because of the owner finance terms, I started to seek out investors. I started by asking friends and church members if they knew anyone that I could possibly get the money from, and I got a lot of leads. However, those leads were to people who had money, and not to people who invested in real estate. Let me tell you there is a big difference. I wish I understood that at the beginning because it would have eased the doubts that I started to believe after hearing all the “NO YOU’ll LOSE MONEY’’ or “THAT”S TOO RISKY”. When you start asking people you trust about borrowing money, you start to believe that they are right, and for a while I believed them.
After coming up short on finding the money to invest, I decided that I would have to wait and save up my money. Which is still great advice, and I am still saving. However, when you don’t have that much to save in the first place it takes a REALLY LONG TIME. But I was willing to wait no matter how long.
But that was a LIE. I was struggling to save up money plain and simple. Also, I was tired of watching my clients lose on deals that I would analyze for them, because they wanted to wait and watch what happens. Can you guess what happened every time a client said that? Yep someone else bought it. With that I had enough, and I went and asked my wife's folks if they wanted to partner with me.
Now, some of you might be saying why wouldn’t I go to them first. Well, that’s is simple, because they don’t have any money either. However, I told them my plans and I that needed a partner that will put the money up to buy and rehab the deals. I suggested to them to borrow equity out of another property that they owned, and before my mother-in-law could say no, my father-in-law yells out “DO IT”. Her face was in shock because she was mid sentence of say no. To tell the truth I was shocked as well; however, we were even more shocked to find out my father-in-law went in as a partner in deal a couple years ago on a real estate deal and each partner made 60k. Of course, my mother-in-law asked how come she didn’t know, and my father-in-law said because you didn’t ask.
Now, my in-law’s and I are 50/50 partners with them putting 100% of the money. I analyzed a deal that I presented to them as a flip. They agreed and it’s under contract.
The house is 3 bedrooms, 2 bath, 2080 sqft sitting on .58 of acer. It’s a ranch built in 1979 with a bonus room up stairs. I wrote the offer up with a 15-day contingency for inspections and a sells price of 35k cash to close in 21 days.
Today is day two, and I had the power and water turned on. I have walked through to make sure there are no leaks, and that the lights function. I am meeting contractors in the morning to get bids on the scope of work that I wrote up today after my walk through. If their bids come back in at the number I am estimating, then we will be closing on November 20.
To say the least, I am excited to have my first deal under contract. I have been waiting for this day for a long time. I have spent a lot of energy chasing down bad leads and getting bad advice from family and friends. My mother-in-law was one of the people who told me that I would lose money and it was too risky. My advice to anyone reading this is to talk to people who has invested before. Their mind set is different from those who haven’t done it. My father in-law for example, did that one deal a few years ago because his father was an investor who bought and flipped houses.
I will post photos and updates as time passes. If anyone has any question or comment please ask.
