You’ve watched all the television stars show you how to start flipping houses; the story line is always the same – good looking young couple finds a great deal on a fixer upper, brings in their construction crews, create a beautiful home, and sell it for massive profits – all in a few weeks!
- Flipping houses looks NOTHING like it does on TV.
- It cannot be done in 30 minutes a week.
- It is extremely hard work, and flipping homes is not for the faint of heart.
With all that said, people who know what they are doing are able to make a lot of money flipping houses for a living – notice the secret to flipping houses is knowing what you are doing!
Six Tips for How To Start Flipping Houses
Buy Your Houses At the Right Price
The goal in flipping houses is to earn a profit. The key to turning a healthy profit lies in your ability to buy a house that you are able to add value to. What does “add value” mean? It simply means that you are able to renovate the house in a way that adds more value than what you have spent. For example, new carpets, new paint, siding, etc.
Successful, experienced house flippers know that house flipping money is made when you buy, not when you sell. But how do you know what to buy, what is a good deal, and what each repair will cost? Simply use this House Flipping Spreadsheet as your guide; it is accurate, easy to use, and best of all, it is free.
Know How Much Cash You Have Access To
Most banks will require putting at least 25% of the sale down, but they will also usually have the best borrowing rate. Lenders known as Hard Money Lenders usually give mortgage loans that are short-term, but they also charge very high interest rates. Sometimes there are private lenders with whom you can build a relationship, and they will offer you enough money at a lower interest rate to buy the house and purchase supplies – but building that relationship takes time and effort.
Make Extremely Accurate Cost Estimates
Purchasing the house you are going to flip is only one aspect of how much the flip will cost. When planning out the home flipping project, make sure you know exactly how much the repair costs will be. Getting this right is essential! How do you do it? Use a free house flipping spreadsheet – I don’t know why more people don’t take advantage of a free product like this, it just doesn’t make sense to me – but, to each there own.
Consider this – the house needs new tile floors, you’ve never worked with ceramic, but get an amazing deal on quality ceramic tile – $.50 per square foot – you can’t pass that up! Or can you? That deal of a lifetime might actually cost you money in the long run! Did you figure in the subfloor, grout, ceramic mortar? And how about a wet saw and the labor? The point is with the pressure of a house flipping project, you can’t possibly think of every cost associated with every step of the project – so let the magic of computers do it for you! You can read more about House Flipping Spreadsheets here.
Hire Reliable Contractors To Start Flipping Houses
As you know, finding good help is the most important part of any business – house flipping is no different. The key to finding the best is doing your homework. Even before you purchase your first flip, find good contractors, check their references, go see the work they have completed. And if you are lucky enough to find a great contractor, hold on to them as long as you can!
Do As Much Of The Work As You Can On Your Own
The more you sub out, the lower your profit margin – up to a certain point of course. Mess up the plumbing and you are going to wish you hired someone who knows what they are doing! When determining what to do yourself and what to hire out, factor in how much the project will cost and how long it will take to do the job right. Remember – in the house flipping business, time is money!
Sell Your House As Fast As You Can!
The key to start flipping houses is to sell your house ASAP – remember, every day the house is on the market is a day that you lost money. Make sure you have a plan to market your home – maybe you sell it yourself, maybe you hire a real estate agent to sell your home. Whatever you decide, it is imperative to sell it quickly and sell it at a fair price – otherwise, you are not going to be in the house flipping business very long!