Here is my story. Since I decided to start a flipping business 8 months ago I've done a lot of preparation to get started. I've washed tons of Youtube videos, read thousands of resources on the internet, and here as well, attended local investment events and seminars. Besides that, I've learned about my local market and connected with contractors and agents, got pre-approval letters from several hard money lenders. When everything was ready I was eager to begin my first flip. The only thing is finding a good deal.
I decided that I would find something on local wholesale groups on FB or find something on MLS contacting directly a listing agent.
My market is North Jersey where the average price is 350-650K.
It's been almost 3 months of searching for any deal that has the economic sense to go forward. Here is the reason for my failure:
-almost every single house that I saw through wholesalers was a piece of trash needed to full rehab involving fixing structural issues(I planned to find something light or moderate for start)
-wholesaler's number was totally wrong - underestimated the cost of rehab and overpriced comps- their greediness went over the roof
-when the deal on MLS was good enough to put my offer it ended up bidding my offer 40-50K over the asking price that ate entirely estimated profit. And that story repeated 4-6 times.
-since I've got the economic background I really track the real estate market and now expecting the titanic shift for a long-term downtrend meaning that ARV should be on the conservative side, but unfortunately, the current market condition is not favorable to me to start here.
What was wrong with my strategy?
