How to Do Your FIRST House Flip in 2024 (Part 1)

TL;DR

A first house flip starts with finding a viable deal, planning several exit strategies, estimating the rehab with a contingency, and lining up financing quickly. Renee Hosman secured a Denver condo through a first right of refusal, obtained private funding within 24 hours, and built a $26,044 renovation budget with a 15% buffer. Read on for her acquisition, financing, renovation, and exit-plan details.

Transcript

hey rookies normally investors who come on the podcast share their personal journey of real estate investing but it's usually after they've experienced their highs and lows which is still incredibly valuable but what if we learn together in real time today we're bringing on Renee hosman the community manager and rookie real estate investor here at ... Read More

Key Insights

• Renee Hosman, a rookie real estate investor, is documenting her journey of flipping her first house, offering real-time insights into the process.
• She purchased a condo in Denver, leveraging her network to secure private financing within 24 hours, demonstrating the power of connections in real estate.
• Renee's strategy includes multiple exit options: a BRRRR, a flip, or short-term rental, highlighting the importance of flexibility in real estate investing.
• The building has a unique first right of refusal clause, which allowed Renee to match an existing offer and secure the property.
• Renee plans to manage the rehab herself, using a combination of DIY efforts and trusted contractors, emphasizing the importance of hands-on involvement.
• Her renovation budget is meticulously planned, with a 15% buffer to accommodate unexpected expenses, showcasing the need for financial preparedness.
• Renee is leveraging resources from BiggerPockets and local networking events to enhance her real estate knowledge and skills.
• The episode underscores the potential of private money lending as a viable financing option for rookie investors, with Renee securing a 15% interest loan with no prepayment penalty.

Questions & Answers

Q: How did Renee Hosman find and secure her first flip?

Renee already owned two condos in the same eight-unit Denver building and knew another unit would eventually be listed. The building’s first right of refusal allowed her to match an existing offer and secure the property.

Q: What should a rookie investor look for when choosing a first flip?

Renee chose a property in a building she already knew well, which gave her familiarity with the units, HOA, and potential issues. She also selected a deal that supported multiple exit strategies instead of depending only on a resale.

Q: How did Renee finance the condo purchase?

Renee used her network to find a private money lender who could provide the funds within 24 hours. The loan carried 15% interest and had no prepayment penalty.

Q: Why did Renee need to arrange financing so quickly?

Renee expected the unit to become available near the end of the year or early the next year, but it came up sooner. Exercising the first right of refusal required her to get her plans and funding in place quickly.

Q: What exit strategies does Renee have for the property?

Her preferred strategy is to keep the renovated condo using the BRRRR approach. Her alternatives are selling it as a flip or potentially operating it as a short-term rental, although she would rather avoid the latter.

Q: What is Renee’s renovation budget?

Renee estimated the renovation at approximately $26,044 and included a 15% buffer for unexpected costs. She used the BiggerPockets rehab calculator and researched material costs to make the estimate more comprehensive.

Q: How is Renee managing the renovation work?

Renee plans to manage the rehab herself while combining DIY work with help from a trusted handyman and other contractors. Her hands-on role lets her learn new skills while monitoring the project’s budget and schedule.

Q: What role does the condo building play in Renee’s long-term plan?

Renee owns three of the building’s eight units, including the new project, and ultimately hopes to own all eight. Buying the units individually lets her learn in smaller steps and spread out the risk rather than purchasing a large multifamily property all at once.

Summary & Key Takeaways

• Renee Hosman, a rookie investor, shares her journey of flipping her first house in Denver. She secured a condo with a unique first right of refusal clause, leveraging her network to obtain private funding quickly.

• Renee's strategy involves multiple exit plans, including a BRRRR and a flip. She is managing the rehab with a mix of DIY and contractor help, emphasizing the importance of hands-on involvement.

• Her renovation budget is carefully planned with a 15% buffer. The episode highlights the power of networking and private money lending as key tools for rookie investors.