Ask me anything about "Flipping" homes

[Lefort]

So I'm starting a Property Investing firm with a good friend and our plan is to develop capital in the beginning by flipping single family homes. Our situation is that we are both 22 years old and graduating school in April '08. We have 8 months to prepare for our first flip. So far we have been reading books and making the preliminary steps to creating a social network by finding out who we know are real estate agents, contractors, sub-contractors, bankers, etc.. We really haven't done anything offical but we are two very intelligent and motivated people with about $50-80k capital to begin with.

I'm looking for any advice that you can offer us. The most important of which would be to give a bit of a timeline or order of importance of things that we should be doing and looking into. We feel like our first order of operation will be to find a good banker (after some interviews) and from there we will know our best mortgage option and we can start looking into a certain price range in a certain location as well as finding a good realtor.

[blue_water]

gordongecko,

How did you get started in this business?

Are there any books and/or a course that you recommend?

Thank you,
blue_water

[brendanb438]

OP also interested in a timeline / order of importance like which Lefort asked about. Those 2 items of knowledge are probably worth more than any book out there about flipping homes.

[wildb]

I am a noob to the flipping business.
I have the following being offered:

A wholesaler offered me a home to purcahse for 65% of value. The offer is a fact. The value is in question.
Have not begun the verification process.

Hard Money Lender associated with this deal is offering:
6 month loan
5 points built into loan
15.25% annual interest rate
Wants me to have a credit score of: 650
Wants me to put 10% down.

Based on the above information:
Can I assume that the hard money lender does not like this deal?
These terms seem insane to me, and if the property was really being sold at 65% of actual value I could easily get better terms.
If the property is really being sold at 65% of actual value why would the wholesaler want me in on this deal?

Help me wise people with experience. I will humbly listen and be thankful.

[Tien]

Check the value yourself.

Without knowing what the house is worth on the market in its after repaired value, everything you asked is worthless and we cannot answer.


Chances are the wholesaler sucked out all the profits out of the deal.

[NapoleonDolemite]

I have a question somewhat related to this. There is an old home near me (60 years+) that the owner needs moved off of the property. Moving it would cost more than the home itself. I might even be able to get the home for free or close to it.

I was thinking of buying a lot, moving the home onto it, rehabbing it, and then selling it later on down the road. I would probably live in the house for a little while once it was fixed up since I am renting now and don't own a home currently.

The problem is I will need to finance the purchase of a lot (they're epxensive around here) and the costs of moving the house.

My question is, how do I go about financing this? Can I package these things together in some type of mortgage loan, or will I have to find a hard money lender?

[john voight]

what classes, licenses should I get?
Real Estate License?
Appraiser's license?
Etc...

I'm guessing you dont need them if yoru real savy, but I'm a noob, and it would comfort my parents that I am working on some kind of license (since i dont do well in school).

I'm in cali, and prices are sick high here. Is it plausible to do flipping/ any type of RE stuff out of state efficiently?

[Kedu]

I have a subscription to a foreclosure listing website. Most of the deals seem to good to be true. For example one house:
purchase price 21k
last sold for 150k
appraised in 2006 for 90k

What's the catch?

[RobertHunter]

Napoleon,
If you are going to live in the home you might be able to find a lender to give you a loan on the package. Maybe consider using a mortgage broker if you can't find a lender directly. Will be dependent on your credit-worthiness and possibly how much down you have. Since you are renting now you should probably live in the house for 2 years as your primary residence, this way all profits should be tax-free. Also, if you are looking into moving a house I would first go talk to my local building department. Some municipalities consider moving a house to be new construction which could require you to bring items up to today's codes and that could get very costly. Good luck.

[CrazyAce]

Great topic