Your Keys to House Flipping
House flipping can be both fun and profitable, but there are certain things you need to know before dashing in and snapping up properties. Like any business, there are pitfalls, but with proper information, they can be easily avoided. Follow a few simple guidelines, and you’ll be on your way.
Flippers: What Should You Avoid?
— Don’t Quit Your Day Job: At least, not right away. Get a few successes under your belt before you tell your boss what you really think.
— Don’t Just Wing It: There’s no time to make things up as you go. Make sure you follow your budget and keep to your schedule. You’ll spend more money by falling behind. Here’s a great resource for keeping track of your budget and your time!
— Don’t Ignore The Neighborhood: Flipping a house in a declining neighborhood is like putting lipstick on a moose. It will get noticed, but nobody will want to claim it. Do your research. Don’t invest in a neighborhood where no one wants to live.
— Don’t Go It Alone: Network with not only other flippers, but people who are ready to buy! Take full advantage of websites where flippers, wholesalers and buyers can communicate with each other.
Wholesaling: What’s the Big Idea?
Wholesaling is a great way to get into the flipping business if you don’t have a lot of starting capital. You can put a house under contract or sell a house as-is to another investor. But how do you know if wholesaling is right for you?
— Simple Startup: After you assign a contract to an end buyer, they will be responsible for all cost associated with closing the deal.
— Less Risk: When you’re simply assigning contracts, the house is never in your name. You don’t come up in the title search. This gets rid of a lot of the risk and expense.
— Learning Curve: If you find difficulty selling your wholesale contracts or houses, you may not be offering a strong enough deal. Are you asking too much? Is your circle of buyers too small? Experiences like this help you learn which deals your market will bear.
Investors: How Do You Invest?
You’ve got the real estate bug, and you’ve heard of people making serious money by flipping houses, but what is your goal? Are you looking at house flipping as an investment or another source of income? Read this article before deciding!
Here are three popular ways to obtain start-up capital.
— Hard Money: “Hard money” refers to funds from small investment groups that lend investment money to house flippers. The loan is secured by real property.
— Private Money: Family and friends could also be a source of investment funds. Offer promissory notes and progress updates, whenever possible. Borrowing from family can be emotional business, so do your best to avoid hurt feelings.
— Bank Financing: After a few completed flips, or if you have good credit, look into obtaining bank financing. Banks normally want applicants to have at least two years of flipping experience and a record of profitability.
Regardless of whether you’re a flipper, an investor or a buyer, the most important thing you can do is get in contact with people who can help you. Quality house flipping is always a devoted team effort. With time limitations and the responsibilities of everyday life, it can be difficult to get in touch with everyone you need to.
Consider becoming a member of House Flip Capital, LLC! Examine markets, evaluate trends and meet the people who can help make your house flipping dream a reality! We’re here to help folks succeed in the business, regardless of your experience level.