You’ve made a decision, you want to start flipping houses, but you’re not sure where to start. That’s okay! There are a lot of factors that go into flipping houses, it may seem easy on TV but the reality of it is, there are challenges that arise. If done right, it can be a fun way to invest in real estate and you can make a profitable return.
Straight to the Point
- Money is made at the buy, not the sell of your flip:
When flipping a house your money is made at the purchase, not at the sell of the house. It seems backward, right? Many times people buy a house intending to make a huge profit only to find out that they could not make any money after all the renovations because the purchased price of the house was to high. When you purchase your property you need to be sure that you buy a house with enough money to make renovations, have a carrying cost, and add about $6,000 give or take.
- Get an inspection on the home:
Get a complete inspection done on your property. By spending a few hundred dollars on this expense you can save thousands in problems that you cannot see. When you get a full inspection you can rest assured that you know everything that is wrong with the property before it is too late. In the contract for the house, you need to make sure that you have 7 days to have an inspection performed, and if the inspection finds problems that are going to cost more money than you are willing to spend, you can get out of the contract with no penalties.
- Don’t do the work yourself:
Get a contractor or several sub-contractors and have the work done quickly. You need to have your house flipped ASAP so that you can get it on the market and get it sold. It can take an enormous amount of time that you may not want to spend renovating. Hire a trustworthy and well-referred team to get the job done so you can be on the hunt for the next investment opportunity.
- Place the property 1 to 2 percent below market value:
If you are wanting to flip real estate and make money the object is to buy and sell the property as quickly as possible so that you can move on to the next house. If you purchase a house and try to sell it at top dollar to make an extra couple of thousand dollars on your flip, and end up holding it for 6 months you are losing money. Get the house on the market at a price that is going to blow the competition away, and you will sell it no matter what the market conditions.
Offer it at such a great deal that people wanted to jump on it, this is a good thing especially if the market is slow.
- Use a realtor:
Do not try to sell your house on your own. Harness the power of a realtor and the power of the MLS system. A Realtor has to follow specific guidelines and regulations that give them a step above real estate agents without this certification. With a realtor, you have someone actively marketing your house to get it sold. Once again, this will free up more time for you to look for more great deals.
Do your homework before you purchase a house, and make sure that you can pull a profit on your deal. Then, make money happen!