So, you want to get into the flipping game and make money or possibly you had a bad experience with flipping a property and want to learn how to flip a property and actually make money? First of all, let me say that I don’t believe in expecting a large return on a flip if all you do is sign your name on a closing statement and expect to turn it around quickly. It’s just not that easy.
What can happen though is that if you follow some of my techniques you can expect to earn a nice profit for yourself. There are five keys to success that I would like to discuss in this article. They are: (1) you must buy the property right, (2) you should be willing to shop for good deals, (3) you must not be afraid to get your hands dirty, (4) you must be reasonably handy, and (5) you need to do most of the work yourself.
How to buy the property right. Here’s where you need to either be a real estate agent or work with one. Knowing the market area is essential to getting the right house at the right price. Are prices in this area increasing? Are others improving their homes? Is the home’s sale price consistent with the repairs needed? Does the listing allow for an easy out of the contract should you learn something during the home inspection stage? It is my opinion that you definitely need a home inspection because you want to know everything that is wrong with this house before you start.
You should be willing to shop for good deals. First thing I always do is set a budget. It’s not iron clad, but it is a starting point. You know what you bought the home for and you know roughly how much you want to get out of it, so now work backwards. What needs to be done and how much money can you allocate to it? Be methodical, make a list and try to stick to it. Shop hard for sales, closeouts, and alternatives. Many of the home improvement stores put closeouts out front early in the morning. Swing by on your way to work. Check garage sales, newspaper ads, and even the internet. While you certainly should buy quality materials, you need to resist the urge to buy the nicer faucet or the prettier cabinet pulls. Always buy with price and quality in mind with a close eye on the budget. Over-spending is a common pitfall.
You must not be afraid to get your hands dirty. If a home needs to be remodeled, chances are it is pretty dirty too. Hiring a cleaning person is expensive and not necessary. Anyone can scrub. It’s good exercise too. The yard most likely is a mess since the previous owners probably neglected it. Some of the hardest work is done in the yard. Having the right tools is key, but you don’t have to buy them, most of them can be rented.
You must be reasonably handy and you need to do most of the work yourself pretty much go hand in hand. You should consider finding another hobby if you cannot do average repairs yourself or if you don’t enjoy it. If you get stuck and have to bring the professionals in for a botched job, your profits will quickly go down the drain. Labor is very expensive to pay someone for and should be used sparingly.