All Forum Posts by: Account Closed

The market where I live is very tough, properties on the MLS sell very fast but I was fortunate to find a FSBO deal on Zillow. These homes typically get far less views so there is less competition.

Even in a red hot market the best advice is avoid reaching for a property, if it doesn't seem to be a great deal on paper then walk away.

That plan sounds good for a long term investment, although in that position you might want to start with buying one or two properties to see how it goes instead of rushing to buy ten. Having $3,000,000 in loans with little cash reserves left after buying ten buildings is also more risk than you may want for a 6% return.

My advice is keep the land, especially until you have a full understanding of what can be done with it. Read your local zoning ordinance to find the highest and best use for the zoning and lot conditions. If you have trouble with this it is worth having a real estate attorney look at it for an hour.

If the lots don't allow what you want to build, take a shot at getting a variance.

Material prices have come down a lot but finding workers is tough. It could be a good idea to frame out a 1,200 sq ft home at one of these sites if you can figure it out over time. If it goes well, repeat the process if not sell the other lot.  

At 18 you can learn to sell or learn to build to improve your odds at becoming a successful investor. I'd suggest doing both, at some point you will find the right combination, I still manage a lot of my projects and find things I can do myself to keep the budgets in line. I also have a brokers license which brings in a lot of bonus income in addition to saving me money.

100% get a license when you want to start buying property because you will gain an advantage over other investors that don't have a license. Even one small commission a year should cover your costs. Plus every time you purchase a property you'll gain a 2% to 3% commission and save your listing commission too when you resell one...instead of having it go to your agent. The savings add up fast over 5-10 properties.

Invest and learn to sell, it isn't the easiest way to make a living when you're starting out at 18 but eventually if you are halfway decent at either you will be able to make a living doing it. Talk to 5 or 6 firms before hanging your license with a broker. Since you want to invest find one that has deals on personal transactions if you can. It is also important to avoid firms that take big chunks of your commission or ask for desk fees. Learn the business and when you have success then get your brokers license as soon as possible.

Plumbing and heating is always a big expense on flips, if you can stand it as a day job to build income while you're starting out it is certainly a valuable skill to learn.  

Hello All,

Does anyone on here prefer to build and flip the new construction?

The market where I live has become extremely tight, I started flipping homes and slowly had to shift my business to buying spot lots to build new homes on. Now I'm finding even single building lots aren't leaving much room for profit so I'm considering multi-lot developments. Seems to be a big gamble in this market, especially with the road costs between 500 and 800 a foot. 

I was lucky to find a decent 1978 home to flip for my next project, but I'm going to have to consider larger tracts of land in the near future and was curious what other investors are doing in tight markets where good deals are hard to find. Has the build and flip strategy worked for others and has anyone been able to scale it up to larger developments?

Any advice would be greatly appreciated!

- Luke

Based on the numbers provided I'd go with the flip, especially if it is a quick turn around and you are confident you can stick to that budget. Plus you have the offer accepted on the flip!

It is tough to vote for the rental without seeing the taxes, fees and expenses.

A couple of those flips and you can buy a similar townhouse outright. Keep up the good work.

@Evan Polaski That is a valid point although the 15M number is inflated by putting a 60% ROI on top of the massive gross profits for 10 years. Breaking it down for years 4 to 5 the profit would take 7 homes all making $80,000 for that year. Years 6 to 7 over 17 deals are needed for the 1.38 M profit. I didn't calculate past that point but I'd guess it is near 70 homes a year by year 10.

Overall I agree with the TRAJECTORY point on successful flips, it has been a great way to build wealth. Moving forward I have to look to hold the low cost / high cash flowing properties for the reasons mentioned. Plus owning some of these over the long haul is a good way to add passive income.

I joined Bigger Pockets yesterday to expand what I know, make business connections and to stay motivated.

Going to look at another house to flip this afternoon. I always save it and redeploy it, homes and land are what I spend my money on!

Thanks for reaching out, I appreciate it.

My second deal was about 3 times the square footage as my first deal. The biggest mistake I made purchasing it was being in too much of a hurry and not taking a closer look down in the crawl space. (Always bring a flashlight and take a close look)

The previous owner was throwing junk down there and there was some dry rot on the sills, nothing too serious but it could have been a lot worse.

Hello All,

I wasted a portion of my day looking back on past deals and spread sheets instead of finding my next project...Long gone are the days of buying a POS like this for $46,000! (In my market at least.)

Seeing the current estimated values on some of these flips has been a gut punch. The home below: Bought 46k had 90k in repairs - Sold at 240k - Current Est Value is $350,000!!!

I have to admit, this is making me reconsider my fix and flip strategy. If I RRR'ed the smallest 3 of my flips over the past decade I'd have $675,000 in equity before even counting the rental income.

Looking back I had the mentality that I have to sell them to free up cash and keep moving but clearly I dropped the ball over the past 10 years.

Never should have sold the smaller deals, never should have watched the Big Short movie.

Are other flippers looking back at deals and coming to a similar conclusion?

It is a tough market to get started in, especially in the Northeast. The inventory is so low here and rate increases haven't helped the situation but don't let it stop you from investing in the right property.

Financing options are out there, my best advice is find a lender that can help with the type of project you want and be patient. Don't over extend in this market and find something that is a good long term investment.