When it comes to real estate investment, one of the best ways to turn a significant profit is through flipping houses. However, flipping a home is a challenge in itself, and without the proper guidance, you could end up losing money on your investment. No matter how easy house flipping seems on TV, there are many risks involved, but as long as you are prepared and do the necessary research, you could make a nice chunk of change.
What is House Flipping?
Flipping houses is best described as buying a property with the intention of renovating it and then selling it for a profit. As a house flipper, it is best to purchase homes or properties that your typical homeowner isn’t willing to buy. The best houses to flip are cheap fixer-uppers that are not ready for someone to move in.
So whether you are an established real estate investor looking for a new property or are a beginner who is just getting started, follow this guide to make a profit house flipping today.
Assemble a Team
House flipping is not one venture. A successful house flip consists of several moving parts, and it is much easier to work with a group of experts than deal with everything on your own. Here are some examples of what you need.
Lender
You won’t be able to flip a house without the proper finances. It is essential to connect with a real estate lender with solid knowledge of different types of loans to find one that works best for you.
Real Estate Agent
Working with a real estate agent can help you understand the markets and find a property that works best with your budget.
General Contractor
Unless you are fully confident in your renovation skills, it is best to reach out to a general contractor for professional help. They will know everything you need to do, from costs to design.
Financing
Once you have assembled your team, sit down with your lender and figure out a plan to finance your property. As long as you are stable financially, you should qualify for a conventional loan, but if you don’t consider taking out a portfolio or home equity loan.
Develop a Business Plan
Once you have your financing under control, it is essential to establish a budget and develop a business plan.
Budget
Decide how much money your plan on spending in total and stick to it. Make sure you decide how much you are willing to spend on both the property itself and renovations. It is also critical to put some money aside for unexpected expenses.
Renovation Plan
Decide what you plan on renovating and how you are going to get the job done.
Timeline
Establish how long you want the project to take from the time your purchase the house until it is time to sell it. Remember, you will be paying a mortgage, so the longer it takes, the more money comes out of your pocket.
Find the Right House
Once you have a solid game plan, it is time to find a house that fits your budget. Even though you are buying a house to fix it up, it is essential to go through routine inspections. You don’t want to end up with a house with costly repairs. It is crucial to do your research and find the house with the best possible payout in the right market.
Start Renovating
The most important part of successfully renovating a house is sticking to your budget and getting work done in a timely manner. Remember to keep it simple to make sure you don’t go overboard in costs.
Sell the House
With the renovations complete and the house looking brand new, it is finally time to reach out to your realtor and put the house back on the market. It is essential to work with your realtor to find a reasonable price where you can make a profit without scaring away potential buyers. Of course, the main priority is to make a profit, but if you set your price too high, you risk not selling it at all.
Flipping a house for the first time is as stressful as it is exciting. Don’t be afraid to talk to experienced flippers for advice, follow these steps and, most importantly, take action and get to work!
