So you want to flip a house. Sure, it sounds simple enough. Buy a house, renovate it, and sell it for tons of money. But there’s so much more to house flipping than what’s visible on the surface. Not sure if you’re ready? Read the list below to find out!
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1. You aren’t relying on HGTV to show you how flipping works
A lot of us have watched Flip or Flop and man, they make it look easy. The amount of work they can get done for such a small renovation budget is incredible, isn’t it? The thing is — the numbers and stories represented on the screen are not real life.
If you go into a flip expecting it to go as smoothly as it does on TV, you’re in for a rude awakening. If you’re at the ‘just beginning to think about flipping’ stage, you should probably leave your aspirations here until you’ve learned more about the process. If you already know TV lies, keep reading.
2. You’ve read and studied for months
You would never go skydiving without taking a lesson first, right? Then why would you ever try to purchase, renovate, and sell a home without studying the process? In order to make sure you’re successful, you need to know what you’re doing.
Luckily, there are literally thousands of resources out there that can help you ease your way into flipping homes. Use them!
3. You’ve networked with other flippers
Books and websites can teach you a lot, but not as much as experience can. Before you get that cashier’s check ready, network with local home flippers in your area, check out meetup groups for real estate investors, and use websites like biggerpockets.com to learn from the pros.
4. You understand the financial commitments
Buying a house, even a cheap house, is not a small commitment. And if things go awry during the renovation process, you can be on the hook for a lot of money. Make sure you’re financially prepared to succeed in the best case scenario — and also in the worst case scenario.
5. You know how to get funding
Traditional mortgage loans aren’t the only way to fund a flip. In fact, there are lots of creative funding options out there — but you have to be careful. As with most things, there are some companies offering easy-to-secure funding with no money down and no risk to you!
While that all sounds great, what they’re actually doing is prowling on novice flippers who are uninformed about the financing process and are gullible enough to sign on for loans with long-term repercussions. Remember, if it sounds too good to be true, it probably is.
6. You understand the time commitments
Flipping houses isn’t really something you can do in your spare time unless you (a) have a ton of spare time (b) have no urgency to sell your property or (c) have a team of contractors ready to get to work when you say go.
Flipping a home takes a lot of time, research, patience, and adaptability. Make sure you’re prepared to commit yourself fully to the project before you jump in.
7. You have a list of trusted contractors
Don’t blindly hire help! Before you go gung-ho on repairs and updates, do your research and learn who’s who in the area. Slow, unprofessional, or otherwise sub par contractors can really hurt your profits and timeline.
Also, having trusted partners that you work with on flip after flip will make each project easier than the last. That’s why it’s important to vet your contractors and then stick with them if they do good work.
8. You know about the risks
What the flip?!? The thing you need to understand is there are lots of things that can go wrong. Maybe the house has a huge mold problem you didn’t know about. Or perhaps there’s an underground water leak.
There are plenty of issues that are not visible to the naked eye that can cost you big time — and as-is sales take the burden of those issues off the seller and put them on you, the buyer. Make sure you’re prepared to take on whatever surprises your flip house throws your way.
If you want to mitigate some of the risk of things going wrong while you own the home, or if you just want to sweeten the deal for your buyer, you could invest in a home warranty.
9. You’ve thoroughly researched your neighborhood
A super low sale price may indicate bigger problems than a broken down home interior. Make sure you understand the neighborhood you’re purchasing in.
Look up crime statistics, research nearby homes for sale, and talk to locals to get a feel for the area. The last thing you want is to be surprised by unknown issues that really hurt your flip’s value when it comes time to list it for sale.
10. You have realistic expectations and are still excited to give flipping a try
If you’ve done all the things listed above and you’re prepared to take on whatever comes your way during your home flip – you’re ready!
The truth is, flipping isn’t for the faint of heart. You have to be prepared to invest yourself mentally, physically, and financially into your project in order to be successful. But once you’ve prepared, it’s time to hit the ground running. Flip flip hooray!
Ready to sell?
Once you’ve completed your renovation, click the link below to connect with a top agent in your area who will work for a discounted rate but still provide full service. It could save you thousands!