An Introduction to House Flipping
You know that flipping houses can give you the freedom you have dreamed about. You want more from life than a 9 to 5 job and you want more than letting a boss control your life. You know that flipping houses can build wealth and change lives. But what exactly is it? How does it work?
Follow this guide to get started on your journey of mastering real estate and taking control of your life.
What is house flipping?
In short, it’s buying a house that’s under market value, fixing it and selling it at a profit. Simple, yes. Easy? Not at all.
I don’t have any real estate experience? Can I flip houses?
Yes! You don’t need real estate experience to flip houses. But you do need to be willing to learn the system to do it.
I don’t have extra money to invest in houses. How much do I need to get started?
You don’t need a dime of your own money to flip a house. To learn the system for flipping houses, you will need to invest in yourself and your education.
How does it work?
First, you have to find a house that’s a good deal. Then you have to fund the deal. Then you assemble your team of contractors and fix the property. Once the work is completed on time and under budget, you sell it.
How do I do all that?
There’s a lot of work to flipping a house. To do it right, you need to follow a system: Find, Fund, Fix, Flip.
What are all these different steps?
Find: Figure out which houses will make good deals. You’re looking for motivated sellers, or people who just want to get a property off their hands. There are a lot of reasons why this happens. For some people, the house is a problem, or selling it can solve a problem. You want to find these people and help them solve their problems. But you also have a budget and you need to know how much you can spend on a house.
Fund: Flipping a house isn’t like getting a mortgage or car loan. Instead of a typical bank loan, you’re looking for lenders who loan money based on the value of the property. Invest your own money only if you have the means to do it. This step also requires you to know all your numbers: Repairs, closing costs, insurance, commissions and taxes.
Fix: This is the part that will make or break you. Fixing a house right requires you to accurately assess the cost of repairs, manage contractors to do the work and stay within budget and deadlines to produce houses that people will want to buy. It also means knowing how to negotiate with contractors and pay them so they do the job right.
Flip: If you have done the other steps correctly, you’ll have a completed house that’s priced fairly. This step is where you market the house, learn different ways to sell a house and realize a return on your investment.
When I flip a house, am I kicking out somebody’s grandmother, or something like that?
No, you’re not kicking out Granny. When you buy a house to flip, you’re solving somebody’s problem. Maybe a seller wants to unload the house because they’re moving or they have a big change in their lives. Or maybe you’re solving the bank’s problem by taking on a foreclosed house.
Besides, when you buy a run-down eyesore, fix it up and sell it, you’re helping improve the property values in an entire neighborhood. And you’re making a profit. Flipping houses can do a lot of good for a lot of people.
Can I really make a lot of money flipping houses?
Yes, but this is not a get-rich-quick scheme. You can make a nice profit per house, but you have to be methodical about it. If you don’t know what you’re doing, you can also lose a lot of money.
What’s better for the resale value — siding or paint? What colors work best?
Hold on there. Don’t get ahead of yourself. First, get the basic concepts. Then work to fill them in. Flipping houses can give you freedom you deserve. You owe it to yourself to learn how to do it right.
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