All Forum Posts by: Steve A.

All real estate markets are local. I am sure there are some strong neighborhoods to flip around you, and some to stay away from.

In my local market, the first time home buyers are the target buyers. That means buying flips for 40-50k and selling for 85-90k (comping out at 100-110). This is where the buyers are in my market.

You have to buy right, so you can sell a rehabbed home under comps and still make money.

If a realtor shows me comps at 100k and they say they could sell it fast for 95k...... I plan on selling it for 85k. I know this before I make an offer to purchase.

You have to do enough local market research to feel confident enough to give yourself the "green light"!

My 2 cents:

You are only asking for trouble if your first flipping experience is out of state tax auctions. LLC formation would be the least of my worries.

Tax foreclosures can be very complex. Get a great real estate attorney to work with you for tax sales AFTER you do some local REO flips (again this is just my 2 cents).

I would use Investor A as a mentor and just go to him when you need advice for specific challenges on the property. You will get the best education approaching it this way.

Tell him about your deal and ask if he would be willing to share his knowledge if necessary throughout the process.

The learning curve is all about solving the challenges that will come up. If he is going to solve all of the challenges..... you aren't going to learn (but worse, you will be in the way for him as he conducts his day to day business while he would make less money than he is making on his other properties).

I guess I should clarify: I would not look to keep the earnest money and find another buyer. You have the buyer already who is willing to buy at a good price for you. All you need is a lender that can complete this deal.

Find a lender and then tell your buyer to work with them. If they are hesitant...that is when you tell them either work with this lender or lose your earnest money.

Local investors and real estate agents could point you in the right direction. I use a local mortgage bank that has their own underwriter, and funds these types of deals. There should be one in your area.

If (when) I am in this situation I go find a lender to send my buyers to. It looks like they qualify for FHA..... Ask around and find a lender who will fund this. Tell the buyer to go there or the deal is off and you keep the earnest money.