How to Start Real Estate Flipping: Tips from James Vermillion

TL;DR

James Vermillion, an Air Force member, leveraged his free time in Guam to start a real estate investment company. With a partner, he successfully completed his first rehab deal, making over $23,000 in profit. Key to his success was thorough planning, market research, and having a supportive business partner.

Transcript

all right here we go hey everybody it's Josh dorkin with biggerpockets.com I've got a great interview for you today with James Vermillion uh James has been a member of Bigger Pockets for a little while and uh he just finished his first deal from what I understand and uh and he's working on number two and three so uh welcome James thank you Josh hey... Read More

Key Insights

• James Vermillion is an Air Force member who started a real estate investment company while stationed in Guam.
• Having a business partner helped James overcome fears and provided mutual support in decision-making.
• Thorough planning and market research were essential to their successful first real estate deal.
• Their first deal was a rehab project on a house purchased for $89,000 and sold for $150,000, netting over $23,000 in profit.
• Scheduling and contractor management were challenges they faced, highlighting the importance of having reliable contractors.
• Listing properties on the MLS proved crucial for attracting buyers and avoiding unnecessary delays.
• Their goal is to transition from flipping to acquiring rental properties as they build capital.
• Effective division of responsibilities and having a clear business plan are key to their partnership's success.

Questions & Answers

Q: How did James Vermillion start his real estate investment company?

James Vermillion started his real estate investment company while stationed in Guam with the Air Force. He and a college roommate, both interested in real estate, decided to form a company, K&V LLC. They used their free time to take real estate courses online, register the company, open bank accounts, and research the market, preparing thoroughly before returning to the U.S. to execute their plans.

Q: What was the first real estate deal completed by James Vermillion?

James Vermillion's first real estate deal was a rehab project on a single-family house with four bedrooms and two bathrooms, spanning almost 2,000 square feet. They purchased the property for $89,000, invested in necessary renovations, and eventually sold it for $150,000. This deal, completed over five to six months, netted them a profit of over $23,000.

Q: What challenges did James face during his first real estate deal?

During his first real estate deal, James faced challenges such as scheduling and contractor management. They encountered delays due to scheduling snafus with contractors responsible for painting, carpeting, and plumbing repairs. This experience taught them the importance of having reliable contractors and the need to stay on top of scheduling to ensure timely project completion.

Q: Why was listing on the MLS important for James's real estate success?

Listing on the MLS was crucial for James's real estate success because it significantly increased interest in their property. Initially, they attempted to sell the property without MLS to save on costs, but this approach yielded little interest. Once they listed the property on the MLS, they received considerable attention, highlighting the platform's importance in reaching potential buyers efficiently.

Q: What are James Vermillion's future goals in real estate investing?

James Vermillion's future goals in real estate investing include transitioning from flipping properties to acquiring rental properties. They aim to use profits from flipping to build capital, enabling them to purchase and hold rental properties. Their 2011 goal is to complete four flips and acquire two rentals, potentially as a duplex, as part of their strategic plan for sustainable growth.

Q: How do James and his partner manage their real estate business responsibilities?

James and his partner manage their real estate business responsibilities with a clear division of tasks. James handles the website, accounting, and property searches, while his partner manages on-site activities like contractor oversight and material purchases. Their partnership is guided by a business plan and operating agreement, ensuring accountability and effective collaboration despite their other full-time careers.

Q: What advice does James offer to new real estate investors?

James advises new real estate investors to find a balance between planning and acting. While thorough planning is crucial, it's equally important to take actionable steps toward investment goals. He emphasizes starting with small, manageable tasks that contribute to larger objectives and continuously refining plans based on experiences. This approach helps avoid analysis paralysis and sets the foundation for successful investing.

Q: How did Bigger Pockets contribute to James Vermillion's real estate journey?

Bigger Pockets played a significant role in James Vermillion's real estate journey by providing valuable resources and community support. He discovered the platform while in Guam, using it to learn about forming an LLC, understanding market dynamics, and gaining insights from experienced investors. The site offered guidance on best practices and strategies, helping James and his partner prepare effectively for their real estate endeavors.

Summary & Key Takeaways

• James Vermillion, an Air Force member, began his real estate investment journey while stationed in Guam, setting up a company with a college roommate. They focused on thorough planning and market research to prepare for their first deal. Their initial project was a successful rehab of a property purchased for $89,000 and sold for $150,000, yielding a profit of over $23,000.

• Having a business partner was crucial for James, providing mutual support and accountability. They faced challenges in scheduling and contractor management, learning the importance of reliable contractors. Listing on the MLS was vital for attracting buyers, and they plan to transition from flipping to acquiring rental properties as they build capital.

• Their partnership thrives on a clear division of responsibilities and a well-documented business plan. James manages the website and accounting, while his partner handles on-site tasks. They emphasize balancing planning with action and continuously refining their strategy based on experiences from completed deals.