If you are just getting started in real estate, this is a must read. There are 5 things you need to organize and prepare before your first flip. Bill Allen went ‘back in time’ to his first flip and created this easy guide to what you need to have in place as a first time flipper.
- Strategy & Game Plan
Know what you are aiming for when you buy your first property. Do you want to be in the ‘first and second time’ buyer range or do you want to do luxury flips? Are you buying a property to fix it up and rent it out? What you decide will be based on your unique history and skill set. However, generally we recommend you stay around the median home price to appeal to the most buyers and save yourself the risk that comes with vastly fluctuating price ranges on luxury homes.
- Connection with a Realtor
When you connect with a realtor they can run comps on properties and help you estimate your After Repair Value. We don’t recommend going with a big real estate agent. Find someone who is hungry. Maybe they are just getting started and are motivated knowing that helping you will help them build their business as well.
- Find a Mentor
A good mentor can save you thousands of dollars. This can be someone in your local area, a paid mentor, or someone who is flipping multiple houses already and can help guide you through the process. Look for someone with your values, your characteristics, and who already has the things you want. When you jump right in without guidance you can make many costly mistakes, and trust us when we say the money you lose would be better spent paying someone to help you avoid those mistakes.
- Community Network
Find a group or a place where you can ask questions; a peer to peer network where you can jump in and get advice along the way. Word of caution: Be wary of free advice, it may not always be good advice, and bad advice can cost you money. Within that peer to peer network, look for people a little farther ahead of you in the process of flipping. This will help you get real time answers from a large group of people. These quick responses allow you to save time problem solving and more easily assess and determine what your next step is.
- Get a Good Home Inspector
This is someone who can walk through the property and tell you some major things you might miss with your new untrained eye. Bill Allen found an inspector who was willing to walk through the properties with him for a discounted inspection rate. Walking the properties with this inspector helped Bill learn a great deal about what to look out for.
These 5 elements are about lining up connections that set you up for success. If you prepare yourself by tapping into these networks and key individuals, they will help you dial in your knowledge as you are taking action. Learn as you earn. If you get these five things in place you will be actively educating yourself as you take that crucial step forward, flipping your first house.