I’m currently a senior in a Orlando, Fl High School i have lived in the city for quite some time and i know the city very well. I also have friends and family in the real estate business. I am planning on taking my loan officer course and or real estate course immediately after graduating and since i don’t have many expenses I’m going to save to go into flipping a house and then using the commission from that to do another one then so on and so forth. I want to know if i have the right idea or not and if anyone has any advice about anything i will be doing…
Welcome to the site…
by “flipping” do you mean: buy, fix-up, sell? or buy & assign contract to someone else?
What does your family do in the REI business? Are they agents/brokers or Investors?
There is nothing wrong with your idea of getting your license per se, What I think you need to do is really figure out what you want to get into. Start by Networking & Attending your local REIA groups/clubs. See if you can get mentored or be willing to work for them for hands on education.
Learn the pros/cons of each type of investing…and treat it as a business.
Make a business plan, List of Goals, Action Plan…then take action to achieve them.
Good Luck, and Happy Investing.
thanks for the advice…
for the family question. My aunt is a Loan Originator and owns multiple properties in Florida and she rents and or sells them
and yes i would like to buy houses and doing a fix-up and sell
I’m planning on buying one that strictly needs cosmetic work for my first flip. i also forgot to mention my best friend is going to be partner with me do you have any good ideas on how two people can be successful and make a team?
I’d try to pick your aunts brain as much as possible about renting and such…plus a great opportunity to be “property manager” or handyman there…ie…experience.
Fix-up and sell…
above all else…be honest and truthful with yourself on ANY question.
- Know your market…use the low comps for ARV, be conservative.
- Know what the fix up costs are (then multiply by minimum of 1.5).
- Have at least 2, 3 is better, exit strategies.
- You MAKE the money when you BUY.
ARV
- Repairs (with the 1.5 multiplier)
- ALL Acquisition costs.
- Holding costs (use high MT’s in your area)
- Closing Costs
- Desired Profit
= MAO Maximum Allowable Offer
Partners…huge trap, be very careful. It may kill the friendship. But if you must, make sure you BOTH write the business plan and spell out every possible senerio you can think of and who is bring what to the table. There is no going back and saying “I thought you were doing this, or it was you job”…you and your partner MUST think as 1. I’d highly suggest get it in writing with a lawyer also.
Why a partner?
we are planning on being partners because we both pretty much on the same page on what we want to do. we were planning on one of us being the loan originator and the other a real estate agent among other things splitting things 50/50 except the money we are reinvesting and as we get more projects possibly branching off by ourselves or just making sepreate networking businesses
Make you go in with your eyes wide open…
There are many many things that can go wrong with this type of partnership. Someone MUST have a 51% say-so, or your going to be in trouble.
You guys have alot to think about…sit down and talk about every possible question you can come up with and how to handle it.
- Either get significant other?
- What if your off by more than 50% of the repair budget? could you handle a double or tripple that? (it happens all the time)
- Does the agent pay the listing fees and/or split commissions (if charged)
- Sits on market 6mo’s or more?
- upgrades
- Marketing budget
- Insurance
- Whos on title
- Who is doing the work…or hiring it out. If yourself, whats your rate?
This is a very short list, but keep it going and make sure you can answer them.