I just saw your post. Forgive me for taking so long to respond.
I’m happy to give you my idea on how to start from scratch in a new area. I’ll provide as much rationale for my decisions.
First, I would pretend I had NO MONEY. Money just gets blown.
Second, the assumption is:
I don’t have the energy to…
- compete with bargain-hunting wholesalers
- screw with rehabs
- do cold-calling
- make serial, blind offers
- pound bandit signs
- sift through bargain hunting buyers
- wade through a herd of option weighing sellers
- negotiate financing with banks
- cough up down payments
- provide credit reports
- get appraisals
- screw with agents
- and have my pants pulled down around my ankles, so that everyone and their dog can have a look at my financials.
So, that means I have to find and flip houses on my own, that don’t need new financing; don’t need rehabs; don’t require down payments, and don’t depend on agents, or even title insurance to buy, or sell.
This means I want to “flip pretty houses.”
So, I find sellers who will give me their deeds, and let me take over their loans, in return for pocket change.
What’s that mean? This means I want to buy:
- Houses that need nothing that everyone wants to own.
- Houses that can be bought for a little below retail.
- Houses that can be resold for a little above retail.
- From sellers that are up to their eyeballs in debt.
- From sellers that couldn’t sell through an agent.
- From sellers that will give me their deeds, and let me take over their loans, in return for money to buy burrito combos at Taco Bell.
To find these sellers I create a mailing list based on the criteria I’ve outlined, including little equity, failed escrows, and lots of consumer debt.
Then I send them all letters, letting them know I’m ready to buy their houses today, if they call me today. Then I close on the prospects that fit my criteria, and then flip the financing immediately, in return for cash down payments.
The secret to all this is that I buy a little below retail, and sell a little above retail, and pocket the spread.
On a $300K resale flip I can put about $30K in the bank within a few days. In a few months I can put another $30K in the bank, from the same deal.
The typical cost, not including what I give to the sellers to get them out of the house is about $3K. So, I’m trading three thousand for thirty thousand in a matter of days, and then collecting another thirty thousand later.
It’s the way I would start from scratch, but is NOT the way I started.
However, with what I know now, I would absolutely not start any other way. There’s no way to make this much money, this fast, with such a small amount of money, that I’m aware of. If there was, I would love to learn how.
So, I would find a nice neighborhood, send letters to the owners, get their deeds, take over their payments, resell the existing financing to motivated buyers, and pocket the down payment money.
No agents. No licenses. No banks. No down. No credit. No problem.
Is that a good answer?