Many people get caught up in the mindset that they have to have experience in real estate before they can start flipping houses. While previous experience is always helpful, no matter what field you are pursuing, house flipping is one thing that you don’t have to have a background in. Like many careers, you aren’t going to have a lot of experience (if any) when you are starting out. But if you are armed with the proper knowledge and know-how, it will be that much easier to be successful.
While house flipping may seem complicated on the surface, Real Estate Elevated helps to break down all of the steps. We will provide you with the tools and know-how you need to turn house flipping into a lucrative career.
If you’re still feeling overwhelmed by the world of house flipping, these basic tips will help you get an idea of what you can expect!
1. FIND A CASH SOURCE
Before you can do anything as a house flipper, you need to find a source of cash to fund your flips. Fortunately, you don’t have to pull money from your own pocket in order to get started with flipping. There are plenty of sources you can use to your advantage, including investors and hard money lenders.
2. BUILD YOUR TEAM
Your house flipping team is going to be one of your most valuable assets, especially when you are just starting out. While you could take on all of the responsibilities by yourself, your team will provide you with the expertise you need to run a successful house flipping business.
The main team members you’ll want to find include a real estate agent, contractor and an investor or lender. You can add other team members as necessary, but we’d recommend starting out with these key people.
3. FIND A PROPERTY
After determining the best location for you to begin flipping, you’ll want to find a property to invest in. As a beginning house flipper, you’ll want to focus on properties that don’t need too many complicated repairs. Homes that only need a few cosmetic repairs are the ones you’ll most likely be able to turn a profit from. This is one step where you don’t want to get in over your head until you are more confident with your experience.
4. DETERMINE YOUR ARV AND BUDGET
Determining your ARV is a crucial step for figuring out your budget. The ARV (or after-repair value) of your flip is the price that you need to stick to if you actually want to make money, or at least break even on your flip. If you go above that price, you’ll end up losing money. Once you determine your ARV, you’ll be able to figure out a budget (with a 10% cushion for those surprise repairs) for your flip. Sticking to your budget is crucial for making a profit.
5. SELL YOUR FINISHED FLIP
Once you finish rehabbing the property, it is time to list it and get it sold! Keep in mind that when it comes to house flipping, time is everything. The longer you take to rehab and sell a property, the more money you are at risk of losing. Get your real estate agent on board during this process. They will be able to assist you in listing the house for an appropriate price, and will be able to organize showings for potential buyers.
While these tips are merely a brief overview of what you can expect as a house flipper, our Real Estate Elevated workshops can teach you this and everything else you need to know about flipping houses!
For more answers to frequently asked questions, visit the Real Estate Elevated FAQ.