How does a rookie real estate investor find funding for a fix-and-flip/ rehab property?

Question

I was thinking along the lines of doing my own due diligence:
1) Finding a distressed property/seller
2) Analyze the Comps
3) Estimate the repair cost
4) Calculate the holding cost
5) Identify the profit margin
6) Use a solid exit strategy
7) Negotiate with the seller
8) ..... This is where my question lies. Lets say a hard money lender analyzed everything here and took note " this has the potential to make money" (aka solid deal) I have no proven track record of real estate deals which leads me to believe someone wouldn't really take the time..( too risky). However, if the numbers worked, I do believe there is a chance of getting funding. What do you think? If you had the money would you invest in the numbers?
What do you think my chance is at getting funding strictly by the numbers, disregarding the experience?

all criticism is greatly appreciated. Thanks!
ps. If I am missing a step, feel free to make note of it.
:)

Answer 1

It would not be very likely.



The BIG thing you are leaving out here is YOUR risk.



You are going to have to come up with a large CASH down, 60-70%, if you want hard money.

Answer 2

It is all according to what you mean by funding. You will have to have sufficient cash for a reasonable down payment. You will have to have the cash to do the fixing. You will have to be in a market that flips fast or you will be eaten up by the costs of the mortgage and taxes. You have a nice outline which looks like you got it right out of a book. I found that the only thing the book is good for is to prop open a door that swings shut when you want it open. I bought properties to rent rather than to flip and have done quite well with them thanks to the very lenient depreciation laws. I have had no federal income tax for the five years I owned them on any income and the majority of my income comes from other sources. I will not have to pay back the depreciation until I sell the properties and that will be after I am dead! In the meantime, I get a straight 8.5% of the purchase price back each year as straight line depreciation plus any upgrades and repairs, all taxes and condo fees (I bought condos) less the rental income. To put it bluntly, I make a nice profit but a huge paper loss every years. That beats the heck out of flipping in a dead market!

Answer 3

not extremely: genuine property brokers are actually not inventory brokers, and their paying for or promoting of a property does not influence the cost of the a business organization for different stockholders or control the industry to grant a faux thought of the properly worth of a business organization, this is what insider paying for and promoting regulations is designed to curtail. Yep, they have first shot at properties. little doubt approximately it. this is why extremely some traders choose for to get their license, to be able to plug into the community. yet save in mind that extremely some "flips" are in no way on MLS interior the 1st place, as they're immient foreclosure, abandoned properties, etc. very few properties get listed on MLS waaay under cost, if an agent has been doing their homework on comparables, etc. additionally, an investor could be clever to make acquaintances with an excellent agent who could be looking out for property that meets their customer's standards. Many, many brokers don't have the choose or ability to make a turn artwork -- that they had plenty rather pocket the cost on various properties for the comparable customer! the only time it gets ethically shady is that if an agent representing a customer without notice comes to a decision to purchase that customer's property. as this is impossible for the agent to be independent in this type of transaction, a ethical agent could refer their customer to a distinctive itemizing agent, an agent which will seem out for the customer's maximum suitable pastimes.

Answer 4

First timers get their funding from family and friends since NO bank or loan is available for flips until you have a proven track record.