A Beginner’s Guide to Flipping Houses
Are you curious about the lucrative world of house flipping? You’ve likely seen the shows on TV. People buy aged and worn-down houses and then turn them into real estate beauties for a big profit.
It’s totally possible for anyone to get in on this business, you just need to know a few things. For a beginner’s guide to flipping houses, keep reading.
1. You Need Cash to Start
Most people don’t have the cash to buy a house straight out. Even the cheapest properties will require money upfront. You can try and get a bank loan or seek out investors.
Another creative option is to form a joint venture with someone who has the cash and is willing to split the profits with you. Yes, you do lose out on profit in the end. But for a beginner, this is a great way to gain experience.
2. You’ll Need a Team
Unless you’ve worked in every aspect of real estate and construction, you don’t have the knowledge to do this by yourself. Even the most experienced house flippers have a team they can trust. Most comprise real estate agents (like the ones at RE/MAX Downtown), contractors, attorneys, and designers.
When hiring your team, always check references. Ensure your people will show up on time and bring their A-game, just like you.
3. Location Is Everything
If you purchase a house that in an area with a declining economy and high crime rate, you won’t be able to resell it. There are lots of factors to consider when choosing the location of your flip. Consider the following:
- Crime rates
- School quality and proximity
- Employment growth
You may find a cheap but promising house. But, the nicest house in the worst neighborhood won’t sell. Instead, look for the worst house in the best neighborhood that you can renovate to perfection.
4. Pick the Right Home
If you’re purchasing a home on the market and not at an auction, you may have time to get an inspector out to the property. This is crucial for predicting potential costs and renovations.
Your inspector should check the foundation, roof, electric system, plumbing, and building codes. Roof replacements and mold damage are some of the costlier expenses, so avoid houses with these issues if you can’t afford to fix them.
5. Price It Right
Another reason for choosing the right location is the price. No matter how many awesome renovations you do to the house, you can’t sell it high above market level for that neighborhood.
Pricing below market value in a hot area means your profits can only go up. Speak to a real estate agent for professional pricing advice.
Ready to Start Flipping Houses?
Flipping houses is a fun, lucrative, and fascinating business. It’s attracting the eyes of more and more Americans looking to try their hand at design and reselling.
If you’re ready to get in on the action, check out our blog for more information.