My First Deal?
I would like to here some of your thoughts on getting started. What I have is about 20 to 25k in equity in my house that I could use to cut my first deal. What I am afraid of is that borrowing against that equity will raise my monthly expenses past what I can afford for too long.
But now say I have 25k to invest, I was hoping to flip the first time around for a quick retun. In the long run I want to do "flips" as well as rentals and L/Os. But for someone in my position, what would you guys recomend I do with my 25k to break in to the business? Any feedback would be greatly appreciated.
Flipping is a great way to get started and you shouldn't have to touch your equity.
When I started writing up contracts I felt guilty about putting down small sums of money so I used $100 held in escrow by my lawyer. I know $100 is not a lot of money but a lot of people here use $10.
When dealing with truely motivated sellers they don't care what you are putting down only that you are taking what they see as their problem away.
Best of Luck
JohnNH
Ok, now I am confused. Anyone know where I can read a case example of the average "flip"? I know they are all different but if someone could give me an example of one, step by step, that would be great. I learn and retain information much better that way.
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On 2004-03-12 05:33, Methost wrote:
Ok, now I am confused. Anyone know where I can read a case example of the average "flip"? I know they are all different but if someone could give me an example of one, step by step, that would be great. I learn and retain information much better that way.
I guess you can get confused on this site because the terms change with the area and the investor.
I'll give you an example of one I just worked on with someone:
He is the flipper and I am the wholesaler
He bought house for $20K in 08/2003
He took out loan for $35K
He fixed it up
01/2004 We agreed to sell for 65K
02/2004 I got an appraisal for $93K
I got a buyer for the property through an ad in the paper.
Buyer got a loan
At the closing Flipper received a check for $28K.
I received a check for $2K
The buyer got the house.
This is what I consider Flipping and Wholesaling.
Lori
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I dont understand.
He bought the house for 20k.
Took a loan out for 35k and fixed up the house. Thats 55k spent on the house.
You guys agreed to sell for 65k. But the house appraised for 93k.
So, the flipper got a check for 28k which is 93k-65k. You only got 2k? What happened to the 10k that was between the 55k he spent on the house buying it and fixing in up and the 65k you agree to sell it for?
Quote:
On 2004-03-12 12:45, Almu wrote:
I dont understand.
He bought the house for 20k.
Took a loan out for 35k and fixed up the house. Thats 55k spent on the house.
You guys agreed to sell for 65k. But the house appraised for 93k.
So, the flipper got a check for 28k which is 93k-65k. You only got 2k? What happened to the 10k that was between the 55k he spent on the house buying it and fixing in up and the 65k you agree to sell it for?
When he bought the house he took out a 35K loan, 20K for house, 2K for closing closts, 13K for repairs.
65K sales price
-35K loan payoff
-2K for closing
Total to owner 28K
Lori
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