All Forum Posts by: Ryan Butler

Finding a good deal source, buy-box, or a strong realtor who is knowledgeable on the area and what you are trying to do.

Otherwise, securing reliable funding is going to be your next hurdle. A lot of good lenders and brokers on Bigger Pockets but certainly being aware of who is financing in your area of interest with specific knowledge on amounts, leverages, and experience requirements to go along with rates.

Being up front goes a long ways, so talking to groups and have a good idea on what you are trying to do will really help.

Good luck though! Tons of good opportunities and never too late to jump in!

Happy to connect and help if it would be helpful. 

Hey Ryan — props to you for jumping in! Sounds like you're in a great spot to start, especially with some experience already under your belt. I remember the day I called it quits on the main job and focused on this business. Its a big leap, but a good one :)  

From what you’ve got lined up, it seems like you’ve got two main paths:

1. Go high leverage — borrow with hard/private money, maybe use the 401k loan to supplement, and keep your cash as reserves. This lets you do more deals, but comes with more risk and tighter margins.

2. Be your own investor — use your own capital, either from savings or your 401k (ideally not a full withdrawal), and avoid lender fees and high interest. Less risk of overextending, but it limits how many deals you can do early on.

Neither path is “wrong,” it just depends on your comfort level with risk and speed. You could even do a mix — self-fund your first flip to learn the process, then start using leverage once you're more confident.

Keep us posted on what you go with — exciting stuff ahead! If you would like to talk more about either option, let me know! Happy to jump on a call

Hi Ryan, I just moved out of Massachusetts in 2022.  I still have many active contacts there if you are looking to stay local.  Let me know what your needs are.  I have qualified realtors, GCs, PMLs, inspectors, etc.  You name it, I likely have someone trustworthy. 

@Ryan Butler We are local to the area. There are high leverage options available where you wouldn't have to pull much from your 401k to buy a flip. 

@Ryan Butler

I am on the financing side of things and we work with a lot of new and seasoned flipper for financing options.  There are quite a few options out there and each has their own specialties of what they do well and what they don't do well.  Starting out, liquidity is usually one of the larger components for financing as most lenders will want to see that you have x amount of reserves available beyond down payment and closing costs.  The reserve requirements vary greatly from lender to lender.  Many also require seasoning and sourcing of these funds.

With no experience, most lenders will want to see 20-25% down on the purchase price, but there are some exceptions.  We can often get 10% down for new investors based on FICO, subject property location, and ratios of the deal.  The higher down payment can be very restrictive if liquidity is not sound.

Are you working with a mortgage broker who specializes in fix and flip or BRRRR lending?

Cheers!

have you established a relationship with a reliable fix and flip lender? i find most investors doing fix and flips aren't getting the best terms they could be getting

Im in Little Rock, Arkansas. Bought my first home in 1997, duplex. Lived in one unit and rented the other side. Rental side almost covered my entire mortgage. I was hooked! Still own that same duplex today, plus many more. So I think you are on to something!

I always buy value add, distress property. What I have always had good success with is going to local bank and getting a construction loan. Sometimes they will offer 80% loan of projected ARV (after repair value). They will take your list of repairs and provide to appraiser. Appraiser will come up with the ARV. Sometimes, if you are lucky, the purchase price of the home, plus your repair estimate combined will come in below the 80% ARV and you can get into the home with no money down and interest only for 1 year etc. Make your repairs and then either sell or refi the home to a 30 year if you decide to keep as a rental.

Of course, thats a best case scenario with no money down and a lot of things have to line up, starting with making a good deal on the buy! BUT, even still, if it doesnt work out in that scenario,  you may get into it for less than 20% down.  

So start with a local bank. Ive also had success with credit unions. 

Lender is charging two points of the loan amount as start up cost. Enter that cost into the valuation as a negative number. APR is the points and fees paid one time up front for your loan. The rate is the long term cost.

Use the PITI principle/Interest /(what taxes will be after being re-assessed)/ insurance / and HOA not just the rate. Taxes are around 1.25- 1.875 of sale price depending on location. Fire insurance is 3% in most places excepting California and Florida it's 1% now. The BP calculator is only going to give you a rough number and it will be more expensive than the calculator spits out.