How To Flip Houses For Beginners (4 STEPS)
You do not need money. You just need a couple of simple things. And number one, your network, number two, understanding the market, number three making offers and number four, money’s absolutely everywhere. It’s just up to you to ask for it.
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Yo, yo, what is up? Welcome back to The Science of Flipping podcast. I’m your host, Justin Colby. This episode is going to be all about how to get in the rehab flipping game. I have a lot of students asking me how do they go from wholesaling to rehab flipping, so I want to address it right here on this episode. And by the way, you’ll want to stay to the end because everyone thinks it’s about money. And quite literally, it isn’t. Money is everywhere. And I’ll show you exactly where to get that money towards the end of this episode. Now, if you’re listening to this on iTunes, please give me a five star review. I’d greatly appreciate it. And if you haven’t yet, gone over to my YouTube channel you need to because this is a video as well. In fact, I drop five videos a week, right there on youtube.com/justincolby, make sure to subscribe and engage with me right there.
Now, while everyone does think you need to have money to become a rehab flipper is just untrue. Let me first start out by telling you about the four major pillars I believe any successful real estate investor needs in this game. Now again, what I’ll also highlight is I believe in becoming a well rounded real estate investor, not just a one trick pony. So you’re not just a wholesaler, you’re not just a rehabber, you don’t just buying hold, you don’t just do creative financing, you don’t just do airbnbs be a well rounded real estate investor. And part of that has to do with these four pillars. So first, you need a great network to be a well rounded real estate investor. You need agents, other wholesalers and investors, you need contractors, you need title companies, you need lenders, you need a great network, right?
Number two is you need to understand how to analyze your market. And by the way, a common misconception is you need to be in your own market, right. So if I live in Miami, I need to be only doing deals in Miami. That’s simply untrue. I’m doing anywhere to 10 to 20 deals a month, across the nation. I’m wholesaling. I’m flipping, I’m doing seller finance deals, I’m doing it all and that’s what I’m trying to impress upon you guys is to be a well rounded real estate investor, not just a one trick pony. And understanding the market you’re going to be in is really going to be quite pivotal. And there’s some resources I’m going to give you that you can you can find out and get informed about these markets.
Number three is going to be diversify your exit strategy, right. So making sure you’re not a one trick pony. If the deal is a good buy and hold, make sure you keep it in your portfolio. If it’s a better flip, or a better wholesale, make sure you do those exit strategies. I have two deals this week that we are contracting, we are going to buy and then I’m going to sell off as seller financing. That is the best model for those two properties that I’m talking about. Right? They’re not great flips they’re not great buying holds. But they’re great potential to do seller financing.
And fourth is make sure you know you can do this anywhere. The fourth principle is this isn’t just about staying in your own backyard, you can diversify the location, you can diversify the assets, etc. So make sure you stay diversified. Now, let’s talk about the big one. Understanding your market, right? I would highly encourage if you are going to fix and flip, you would potentially start in your backyard. But it’s not necessary anymore. There’s actually an application I was recently introduced to and it’s been a game changer called privy. And what I’ll do is if you’re watching this on YouTube, I’ll actually put the in the comments below on the link because not privy.com They have a anyways, I’ll put the link in the comments below here in YouTube in a little promo code to get a little discount. So that being said, this is actually showing you across the nation and it does have MLS access by the way it does. It actually is showing you the comps in the area, not just the comps but actually what that rehabber is actually buying it for before he relist it and resells it that actually shows you what actually works meaning you can actually look at that percentage of ARV that they’re buying it up. And all you have to do is line up your offer with what worked for them. Quite literally you can go to any market that privy has MLS access to and they’re over in over 40 different markets with MLS and you can quite literally see all the people who are flipping and then what they acquire the property. And if you can negotiate with the seller or get a property, under that, that number, you’re likely going to do really, really well. So my team right now has a goal that every single person needs to be making two offers every single day, we have five acquisition people. And so we’re doing 10 offers a day, right? Now, that isn’t everyone’s case. So what I would tell you is you want to have a network now privy as the application, I just did an incredible training on this actually this week. So if you haven’t yet, make sure you watch that over on my YouTube channel, the application is phenomenal. It has so much. And one of the things that it does is it actually allows you to find on market properties that are listed under a percentage of ARV. What I mean by that is it will show you relative to all the other comps, where is this home listed relative to the flip comps, very specifically, the flipped comps. So why is that so important is because this episode is all about rehab flipping, so you want to know where your exit price is, that makes sure that you’re diversified, but you want to know how to acquire it on the buy, everything comes down to buy, right? And so this application actually gives you an idea of the other rehabbers the other flippers in market, where are they buying at? Because if you stay below their number, then you know you’re gonna do even better. So again, linked to privy will be here in the comments here on Youtube.
Now, that being said, you want to diversify your network. So you’re going to want to find an agent in the market, you’re doing this in. Now there are certain markets that are great for fix and flip, then there are certain markets that can be a little more challenging, I would highly encourage you getting this app so you even know what markets are better markets to be fixed and flipping in. Now, the network part is really important because you need an agent, I would highly encourage you to get an agent, especially if you’re going to be working on privy because that agent can be making offers for you every single day on the properties that are listed on the MLS they can be offering on your behalf. It is a massive asset. There are so many players that are still using MLS that I had to debunk my own beliefs, I actually was hell bent that you couldn’t find deals on the MLS. So I talked to my boy, Ryan Pineda, I talked to my boy Jamil Damji, I talked to pace in all my boys are like, bro, you’re missing the boat. So getting this application changed my business model, because now I can go and find them. And I can make offers right there on the MLS, knowing what the exit price is needing to be in where I need to acquire all within the application. Now. You want to have contractors in the area. So you want to go out and find contractors, the very best place to do that is right there in these Facebook groups that are all over now. I have a 12,000 person Facebook group called The Science of flipping, there are groups that have hundreds of thousands of people in it go in there and ask them for contractor connections, right? That is going to be really big, you’re going to want to get a minimum of three and you really want them to give you a walkthrough bid on what they believe the rehab is going to be that’s how you’re going to choose who’s the best. It’s not always the cheapest it’s who’s going to give you the most detail.
Now once you have an agent able to make offers, and you have a contractor. Now really, it’s about where do you find the money? Now this is what everyone wants to know, right is I don’t have any of my own money. How do I find this? Well, I’ve taught my students one thing. And that is money is everywhere. You have family members that have 401 K’s you have friends that have 401 K’s, IRAs, there is quite literally money everywhere. What you are not doing as a listener of this podcast or watching this YouTube video, you’re not asking for it. The very best way to ask for it is let people know that you’re looking to flip a property or two or you have some good prospects and you’re looking for a cash partner. Now, cash partners different than lender right to be clear. So if you have not yet worked with that individual, you might want to make them a partner first. Yes, that’s expensive money. But if they see that you know what you’re doing, they make a lot of money, they’re likely going to turn into more of a just a straight lender for you and not be so expensive. But I will tell you I literally just met with a lender this week here in Florida, and we him and I hit it off so great that he Yes, he is gonna lend on a hotel that we’re doing here in Vero Beach, Florida. We’re buying a deal. We’re gonna just relist it in Vero Beach. But he also is open to the opportunity of even partnering on a much larger scale, even across the nation. Now, I didn’t go into this meeting with that idea. But after talking and saying what I’m doing and what I’m looking for, he said he’s open to having that conversation. Now for him instead of just being a lender, he would want to be more of a partner in these transactions. And I’m not even certain I’m going to use him on this, but I can tell you this, by me simply talking about it drew his interest in enough for him to tell me he would be interested in having a further conversation to see what that is going to look like. Guys, that’s all I’m saying. You don’t need to go out there and beg for money, you don’t need to go to a bank, there are a lot of people who have retirement accounts, they have cash in the bank, they have lines of credit against their homes that they can pull by the way, there’s a lot of money out there. And finding it is really up to you simply asking for it. Now you want to be careful, you don’t want to go out there and promise returns and promise all these things because that’s against the SEC, you don’t want to go against that. But bringing in a capital partner, that’s not against anything, you guys really will be partners in the deal. I encourage you to make that the starting point. And if you renegotiate later on down the road, because you realize how expensive that is, that’s fine, you can absolutely do that. I’ve definitely brought partners down to straight lenders because they realized how good I was at flipping and they felt more secure. With that said, go out there and talk to people about it. Just say you have opportunities and you’re looking for cash partners. It’s as simple as that. And then you know, you can go from there. Do you need to go start a big LLC and do all that kind of stuff? No, you don’t. There’s a way to structure the paperwork that you can do. Basically a JV partnership agreement where the money in the deal is as a partner, and you’re splitting profits 50:50 you are splitting losses, 50:50 whatever you want to do is totally negotiable. Totally negotiable. So hopefully that helps when talking about rehabbing you do not need money, you just need a couple of simple things. And number one, your network number two, understanding the market number three making offers and number four, money’s absolutely everywhere. It’s just up to you to ask for it. I hope this helps.
Again, if you’re watching this on YouTube. The link down below will give you the link to privy. And also if you have not watched that training, I would encourage you to go back and watch the training that we did on privy because the software is awesome. It really is a game changer for sure. So make sure you go to my youtube.com/justincolby and check that out. I’ll see you guys on the next episode. Peace.