We have all seen those home improvement shows, featuring the newest couple buying and flipping houses. The idea is great for 30 minutes of entertainment, but the real-life implications of becoming a full-time flipper are a bit more complicated.
You do not have to be a financial genius to get started in the business of flipping houses, but you do need to know what moves to make and the appropriate time to make them. Take a few moments to read through this brief compilation of some informative tips about flipping houses.
You need money to flip houses
To get into the business of flipping houses, you have to have access to funds. Sure, you can get a loan for the bulk of the buy, but it is standard for lenders to want at least 25 percent of the cost of the property to put down.
Not only do you need money for a down payment, you need liquid funds for the renovation. Flipping is not something just anyone can walk into and make tons of money in the first year. You have to be smart about finances, and have access to a substantial amount of money.
Know how to buy at the right price
Purchasing a home at the right price for flipping is an art. You have to work to learn all the tricks of the trade, and it is a very social business. If you are not good talking to people, flipping is not the best place for you.
Networking is a very valuable tool for finding the right properties to flip. Build working relationships with financers, contractors, auctioneers, and anyone else who has an “in” in the local flipping community.
Get smart about estimating costs
To be effective at flipping, you need a broad knowledge of renovation costs. You have to be able to estimate the cost of repair on a home before you make a purchase, or your investments could go very wrong.
For example, when you are estimating the cost of tiling a floor, you need to account for the price of the tile, the price of the installation, grout, tools, and mortar. The price of tile is no longer $2 per square foot, when you account for the whole process.
Find the right help for the job
It helps to be successful as a flipper if you are also equipped to do the reno work. If you have friends and family members that will help, even better. Every flipper needs great help. This is not a job you can do alone.
Post and sell your creations
After you have gone through the process of acquiring funding, finding the right property, purchasing said property, and complete the renovation, it is time to sell. Flippers have to be able to double as their own real estate agent. If you cannot sell the property, then your investments quickly become liabilities.