First time investors Tim and Rene Spears were able to complete their first flip rehab project within 31 days. They searched our Houston property listings to find a three bedroom single-family in need of lots of repairs.
They were able to quickly jump in after making the right connections through networking and taking some real estate courses. Becoming familiar with the details of home renovations was a big step in preparing to flip their first house.
In this success story, you will learn how they overcame their initial hurdles in real estate investing.
During the interview, Tim and Rene discuss:
- How they found funding
- Their process for pulling comps
- Their long term flipping vs renting strategy
The below graphic shows a summary of the deal he found on MyHouseDeals.
Listen to the audio of the full interview here:
What made you interested in real estate investing?
We’ve been wanting to do fix and flips for quite a while, probably for at least seven or eight years. We went to a seminar in Houston in January, and then we just decided to go ahead and jump in with both feet.
Why did you decide on the fix and flip strategy?
Actually, we like watching the shows on TV where they fix and flip houses. Also I’m a realtor and I told Tim that would be so much fun if we could just start investing. We like seeing the houses in the first stage and then after they’re all completed how pretty they are. That’s how we got interested I guess.
Was it difficult to take your first step in real estate investing since you were already agent?
Yeah, it was kind of scary. But you know, sometimes you have to do things afraid.
What was the biggest fear that you had to overcome?
Well, we were kind of concerned about us not being able to estimate the repair cost and we didn’t want to lose money on the property. So we went to some classes and we signed up with fortune builders.
We went through a lot of training and went to some boot camps and took their online coaching to help us throughout the process of these rehabs. They taught us the best way to do the repair estimate and stay on track with our money and everything. After we did all of that, we felt confident with rehabs.
What have you learned about running a real estate business that’s different than what you were doing as a real estate agent?
We learned a lot from doing our first flip. One of our friends told us about MyHouseDeals.com, so we went online and started looking. That’s when we decided to get a membership with you guys to help us to find properties because that was one hurdle that we had to get over.
It was difficult for us to go out and find properties and a lot of people were going out and putting signs up on every corner. It just seems like a lot of waste of time driving around putting those signs out everywhere. And then the city takes them down if they’re not fit properly or put in the right places.
I knew there had to be a better way to find properties. So that’s when we found you guys and we signed up with y’all.
Do you guys focus solely on fix and flips or are you interested in doing buy and holds in the future?
Yes, that’s our goal. We want to have at least 10 rental properties.
When buying from wholesalers or motivated sellers, how do you convince them that you are a serious buyer?
We got in touch with one of the wholesalers on MyHouseDeals, his name was Chuck. He showed us a couple of different properties and then when this one popped up, we called him right away. He knew that we were searching and kept us in mind. We found a house with a lot of mostly cosmetic repairs needed. It was about $35,000 in repairs.
Were you able to stick to your original budget?
We went a little over. We finished about $3000 over our budget. After we got started, we realized some things that we forgot to calculate. So it was a learning opportunity.
We have to remember that we can’t think of it as our house. We have to make it presentable for buyers instead of ourselves. You want to add all these nice things in there and those things always cost money.
What kind of property were you initially looking for when you signed up for MyHouseDeals?
We wanted a single family residence. At least a three bedroom, two bath because we were told in our classes that those sell the best. That’s what we mainly look for.
Were you able to pull the comps yourselves and how did that affect your negotiations?
We pulled our comps and did our homework first on the MLS. We found in that particular neighborhood that the houses on the market were selling fast. Many only stayed on the market for around four days. One was like 16 days.
They weren’t sitting there very long and we found a house with potential to fix up and make a little bit of money. So that’s the one we went with.
How did you guys finance the deal?
We used a private money lender.
How did you get connected to the private lender?
It worked out great. We were actually at an investor meeting in Houston and this lady just walked up to us. We were sitting there at the event and she walked up to us and gave us her card and she said, “I’m a private money lender. If y’all ever need anything, give me a call.”
We gave her a call and had a couple of conversations with her before we ever found this house. It was good to learn what she expected from us and how she worked and everything. Once we found this property, we gave her a call and she said, “Let’s go for it”.
Were you guys able to find reliable contractors?
Oh yeah. We have a great general contractor. He works in our area and we knew him prior to finding this property. So we already had him lined up and everything.
What would you suggest to a new real estate investor in regards to networking?
I think they should get out there and build their network first because once you find the property, things happen pretty fast.
Have you guys considered keeping this one possibly as a rental property?
No, this is our first one, so we’re gonna sell it. We’re putting it on the market tomorrow.
Did the rehab process move along pretty quickly?
From the date that we signed the contract, it took 31 days to rehab.
What advice would you give to a new investor that doesn’t have any experience in the real estate industry?
I would suggest that they take some classes from somewhere to get educated on going out and looking at properties to estimate the repairs because that’s a big factor. You don’t want to mis-calculate how much repairs are gonna cost.
These have been some great tips. Thank you so much for your time.
Well thank you. And we appreciate you sending us this house. When we sell this one, we’re going to be looking on your site for another one.