Newbie Flip Assistance

[martin]

Hello and thank you all in advance.

My friend and I are deciding to flip a house however have no idea on how any of this works. Currently I work in IT with minimal wage. I have roughly 1,200 in checking, no savings and $5,000 in debt (never a late payment). I'm tired of working 9-5 day in and day out and would like to take control of my life. My friend on the other hand is a college student, never held a job and has roughly $8K in savings. First of all, is this a good idea for the both of us to flip a house? We are thinking of purchasing a small unit some where in the range of 80K-120K and resell it (we live in california so home prices are some what high). I've read somewhere on the internet that when flipping a house, I should finance the unit at 100% and try to use as little out of pocket money for renovation, is this the right thing to do? I really have no idea on how all this works.

[flippinout]

Jared is a member here and is very knowledgeable when it comes to house flipping. I am sure that he will have some great advice for you.

[JaredfromIndiana]

Originally Posted by martin

Hello and thank you all in advance.

My friend and I are deciding to flip a house however have no idea on how any of this works. Currently I work in IT with minimal wage. I have roughly 1,200 in checking, no savings and $5,000 in debt (never a late payment). I'm tired of working 9-5 day in and day out and would like to take control of my life. My friend on the other hand is a college student, never held a job and has roughly $8K in savings. First of all, is this a good idea for the both of us to flip a house? We are thinking of purchasing a small unit some where in the range of 80K-120K and resell it (we live in california so home prices are some what high). I've read somewhere on the internet that when flipping a house, I should finance the unit at 100% and try to use as little out of pocket money for renovation, is this the right thing to do? I really have no idea on how all this works.

Disclaimer: I used to flip houses, now am a full time Realtor. When I flipped houses I did it mostly the wrong way, so my advice comes from my point of view.

Minimal wage, $1,200 in checking, no savings and $5,000 in debt. Your friend: $8,000 in savings, in college and never held a job. Sounds like a disaster waiting to happen.

I watched the shows and read the books and thought house flipping was IT! Thought it sounded pretty easy and thought I would make big bucks QUICK. No friggin way. The shows are BS and unrealistic, it's not that easy.

If you have no idea how any of this works then the first thing you need to do is learn how it works. Join your local real estate investing club and find somebody that is successful. You'll be able to tell who they are. Volunteer to work for them for FREE for a while and in return they teach you the ropes. Some investors may take you up on it, some won't.

Learn property values in your area. Don't go to Zillow or any online sites like that, go to a local Realtor and tell them what you want to do and ask them for assistance. Some may help, some won't. Personally, if a young guy called me and told me that he wanted to get into flipping, needed help learning property values, etc... I would say thanks but no thanks. We're just too dang busy to spend time not making money.

All in all house flipping can be very profitable but you need to know what your doing. I speak from experience. I flipped 13 houses in a few years and made a little money but made more mistakes than anything.

I'm not trying to be a nay sayer, just a realist. It's not easy, it's not free, it's not quick. Educate yourself first, take action second. My two cents... keep the change!!

[flip_it_fast]

Lol Jared I think you hit the nail on the head! Your opinion is gold, you always have the best advice. I am no professional house flipper thats for sure but I have learned a ton about it from this site and doing other research as well and I completely agree with you Jared.

Martin, you have to have some money to begin with and what you have won't be a drop in a bucket. Although you have never missed payments on your bills it doesn't sound like you would be able to get a great loan. As the saying goes.. It takes money to make money.

People are doing really well right now in the house flipping business but those people have been doing it for years, they know the ins and outs of the business. House flipping is NOTHING like what you see on the reality shows. Nothing at all.

My advice is to follow Jareds advice. Back up and punt. Research, research and research. Do not jump in head first, you might get a goose egg!