It seems like every time you turn on the TV, you see a show about a married couple, a set of brothers, or a group of friends buying a run-down house, fixing it up then selling it for exponentially more than they paid for it. Maybe you think that’s easy for them to do or it’s all a production set up for TV. That may not be the case; what you’re watching them do on TV could make you some money! Here’s some quick tips on becoming a successful house flipper.
It Takes Money to Make Money
I don’t care what the Spam emails that you’re getting say or what the infomercial that you’re watching at 3 AM tells you, you have to have some money to get into flipping homes. No one is going to hand you a free house to learn on, and Lowe’s isn’t just going to let you take a bunch of supplies and pay later in hopes it works. Mindy Jenson, community manager at BiggerPockets.com (a wildly successful real estate investment site) recommends avoiding credit cards if at all possible when flipping houses. Most loan officers will require up to 25% down, so be sure you have enough money for both the down payment and any planned renovations upfront.
Let’s Make a Deal
No one is going to pay above market price for your flip house just because you paid full asking price then spent $30,000 dollars on improvements; that’s your fault, not theirs. What makes house flipping so difficult (other than the actual work itself) is finding a home that you can buy low, fix up reasonably, and sell high. Don’t overpay! You will probably have to make many offers on many different properties before finding a deal.
Paying contractors to do your remodeling work can get expensive in a hurry. It’s important to remember that when you’re looking to flip a house that every dollar counts. If you can save money in some areas, you need to do that. If there are things in your flip-house that you’re able to do yourself, do it. Undoubtedly, you’ll have to pay someone to do some of the work for you (unless you’re an expert), but every dollar you can save is a dollar in your pocket at the end of this journey. Don’t sacrifice quality, but find some things you can do yourself.
House flipping is hard, stressful, and time-consuming, but if you’re smart with your money, you can turn a solid profit and find another house to flip.