Re: New Investor - What to do? - Posted by Trevor
Posted by Trevor on July 23, 2007 at 22:51:47:
Congrats on the Fico once again. That definetely doesn’t hurt. However, if you are going to go about it as a legitimate business that fico won’t matter as much as you may think.
Flipping is definetly not usually a starters avenue into REI. However, it sounds like you know real estate and how to accurately estimate repair costs.
You have two parts of the puzzle down:
- accurately estimating repair costs
- accurately estimating the sales price
Now, you need to get the other parts down and you’ll be golden.
You need to begin marketing and bringing in a steady stream of qualified leads. I’m not talking 10-20 leads a month. At that pace you may not get a deal for 4 or 5 months. I’m talking 100+ leads a month so you can pick out only the most motivated sellers and make max profits.
Anyhow, with your knowledge, a good place to start may be to wholesale a few properties to experienced flippers first.
Basically, you will be learning the ropes without the risk.
You will still learn how to identify the right properties.
You will still learn how to accurately estimate the properties (even better than you already do)
You will still learn how to calculate the profits and purchase price to ensure a profit.
The only things that you will not do are put up the cash to purchase the property and worry about repairing anything at all.
You will simply find the properties that will turn a profit when repaired, find experienced flippers who have cash to purchase the property, assign the contract over to them, collect your fee, and do the next one.
After you have done a few wholesales and are very comfortable with your abilities in all aspects of the deal, go and do a flip from start to finish on your own.
This is just my 2cents… but, wholesaling is one of the best educations on learning the ropes on the basics of flipping you can get. Learn from the experienced flippers who buy your first couple wholesale deals and use what they did good and avoid what they did wrong.