So basically the term of flipping a house, indicates a process, where an individual or an agency, buy a house or property, repair it and then resell, earning a profit in that process. This by itself sounds very lucrative, and while it is true that you might win a lot of money, on the other side few bad moves, you could lose everything you have invested.
Before becoming a house flipper, be sure to think about it wisely, as it is not a hobby, it is a business which requires 100 % commitment and lots of patience. So if you believe that you cannot do that, it’s better not to start at all. If you think that you might do this, then you have to start off by focusing on few things:
- Educate yourself on house flipping, by buying books (not watching tv shows), or attending presentations that address this matter. Also, you should get comfortable with house flipping math, as it is crucial to know; how much to spend for a home, budgeting for repairing and remodeling, and what to expect as your income.
- The 2nd thing you should do is to research areas. See where houses are being sold, and what are the rates in that areas so you can see if you are actually making a real deal, or overpaying.
- Settle out your financing. Think about what will be your source of investment capital – are you only going to use yours in cash, or opt for some loans? Also, you might think to work with a partner.
- You should probably get yourself a mentor, teaching you through steps and helping you come out of tough situations.
- In the end, you should know what you are aiming for, how much to invest, and the expectations. It is important not to think that you will get rich overnight, as this is more of a longer term profit business.
The thing that you must not forget is to check for licenses. You should see if it is necessary and what type do you need, as in some countries, house flippers count as general contractors, while in others, they need a real estate sale license. Along with that, you should get yourself a team which you will use for house repairing, and try to establish a longer relationship based on trust, understanding, and knowledge.
After you have bought a house or property, considering you made a profitable deal, it is time that you think of what should be repaired. It is crucial not to over invest here, and still not to leave the house like nothing has been done. You must achieve a balance here, so if you are not sure, it is better to inspect the house and let an expert tell you what would be the best.
Remember, as we already said at the beginning, knowing that there is a rise in people wanting to become house flippers, do not get discouraged. You might not turn the profit you wanted first few times, but if you focus on improving and educating, and trying to learn from your mistakes, success is almost inevitable.