I think it’s a common belief among many people that house flipping is a “get rich quick” scheme, but really it’s quite the opposite. Tarek and I have spent many years flipping houses, and it took a lot of effort, time and patience to get to where we are today. When we first started flipping, we really didn’t know what we were doing and we were met with our fair share of challenges: going over budget, having contractors fall through, things not turning out as we had planned (somehow that always seems to happen). But, since we were willing to put in the hard work and overcome the challenges, we are now very successful house flippers.
I don’t mean to discourage you, but house flipping is not easy. Tarek and I certainly realized that when we began flipping and I’m sure you will too. Many new flippers will see how exciting flipping looks and will be all ready to jump in head first, but will get depressed because it is more work than they had anticipated. But while house flipping is hard work, the hardest part by far is leaving your fears behind and taking that first step.
Now, I could just share with you this one piece of advice that house flipping is hard work. But I feel like there’s more that you would like to hear than just that. My hope is that my four pieces of advice will encourage you to start flipping today.
START RESEARCHING HOMES
Start by doing your research. Look for homes for sale that are in an area that you are interested in, but that are also in your price range. Note the condition of the homes when you are searching. A home that needs major repairs, such as replacing a rotting roof, might not be a good home to sink your money into – especially if you are just starting out. I recommend looking for an inexpensive home that you can turn a profit from, but you won’t have to spend your life savings on.
FIND A REALTOR
A realtor will be one of your best resources for finding homes to flip. When searching for a realtor to work with, don’t be afraid to consider several options before you make a decision. Choose the realtor who will be able to help you reach your goals and who is willing to work with your plans.
A good realtor will help you find houses that are within your budget range and will let you know when they come across good deals. Your realtor can prove to be a very valuable asset when you are flipping. I highly suggest adding one to your team.
MEET WITH A LENDER
Before you even begin making offers on homes, you need to meet with a lender. Your lender will help you decide how much you can spend on a house, based on your credit history and other factors (you may be surprised by the issues that can come up when you are trying to get a loan). Work with your realtor on finding a good lender, as they might be able to recommend a couple of good ones for you.
DETERMINE THE COSTS AND SET A BUDGET
Don’t purchase a house until have a good estimate of how much you can expect to spend on repairs, fees, etc. The last thing you want to do is blindly flip a house, not knowing how much money you need to put into it. The initial purchase price of the house, down and mortgage payments, closing costs, rent, utilities, repairs, etc. are all costs you will need to keep track of.
Once you determine the costs of flipping a house, you’ll want to create a budget. A budget is essential when it comes to house flipping, as it will allow you to know where your money is going and if you need to cut back on certain expenses. There you have it! Follow these steps and you’ll be flipping houses in no time.
For more questions like these, visit the Real Estate Elevated FAQ.