5 Things You Should Know If You Want to Flip Houses


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If you have been watching those flipping shows on TV, an idea might have crossed your mind to try it by yourself. The truth is that most of those shows are right about one thing, that anyone can indeed flip a house. Generally in life, anyone can do whatever they want if they are properly educated and experienced, and flipping a house is nothing different.

So, whether you are investing your money, working together with an investor or taking a loan, flipping a house is a big investment. It takes a lot of energy, time and money, and there are some things you need to know before you undertake this kind of project.

You Need Money

The first thing you need to know is that you will be needing money, but the good part is that it does not have to be yours. The thing you really need is access to money. There are a lot of institutions and individuals who are looking to invest in real estate deals. Most people start from family and friends, so if you have one who is wealthy, talk to them about your plans and aspirations.

But if you don’t have friends who will lend you the money, you can turn to private or hard money lenders. They are the people who want to lend money to real estate investors. They are easy to find because most of them advertise on social networking and real estate investment sites. But, be careful, their rates are pretty high, but the price is worth the flexibility and speed they provide you with. Then you have banks, which are your cheapest option. Remember to be professional, especially if you want to lend money again.

Be Aware Of the Risk You Will Be Taking

Flip House

Before you start flipping you need to embrace and understand the fact that house flipping is a risky business. The truth is that every investment you will ever make in your life comes with a certain level of risk, and flipping a house is no exception. You need to calculate the risks you will be taking so that you can make the best choices.

If you understand what the risks are when it comes to house flipping, you will be able to make strategic moves and minimize them. Knowing the risk levels will put you ahead and help you make the right decisions and make your house flipping a profitable business.

A good way to manage the risk factor is to use investment management software. This way you’ll have greater control over risk management, and you’ll know whether to make an investment in the first place. There are many different tools available, but not all of them are reliable, so make sure you go through some investment management software reviews to find out which one you should use.

The right time to buy the house

Truth be told there is no real answer to this question, however, there are times when selling a home is really hard, and people who are trying to do so must be aware of that. In other words, the wrong time to sell the house is a good time for you to buy one, because it’s easier to lower the price. Summer and Winter are your best choices, since house purchases are less likely to occur during those seasons, mostly because people are occupied with vacation and holidays, so they do not have enough money to make a large investment, like purchasing a new home. So, try to make purchases during these seasons and do not try to sell during those two seasons.

Spring is the best time to try and sell your home, but you can also try to make money during Autumn. Again, these are not rules that are set in stone, but logic dictates that less people would be able to make a compelling offer during Summer and Winter. Your best guide should be real-estate statistics and current market prices. Also, you should follow the current state of the economy, and you’ll be able to ascertain whether buying a house is the right thing to do at the moment.

Real Estate and Construction Knowledge

This does not mean that you need to know everything about everything, but when you commit to a house flipping project, you are the chief executive of your business. This is why you need to have basic and realistic knowledge of the real estate market, construction practices and prices, e.g. the cost of painting the exterior of a house. You can put your trust in a real estate agent when it comes to administrative requirements of purchase and sale, but do not believe them when they tell you what your property will be worth after it is all fixed up.

You need some basic knowledge about design and construction, to know what will sell in your market and how much will it cost you to do everything you want in your home. Construction is something you will learn on the go, but it is an important component of every home flip. And remember, do not renovate the house to your taste, renovate it based on the market trends.

Also, it’s essential that everything in your home fully functional, like pipes and electric wiring, for example. These things do not need to be brand new, but if something is not functioning properly it can drag the price down or even drive away potential customers. Another thing to be on a lookout is mold.

Mold can emerge in humid conditions, so even when it’s not visible, it should come as no surprise if you start seeing black spots on the wall one day. In other words, check to see if the conditions in the home you are trying to flip are likely to support mold growth. If mold is likely to appear use the information to bring the price down, and then repaint the room with anti-mold paint.

Show Off and Embrace Rehabs

Flipping a house is not like a rental property, this is a project that needs to be completely updated and fixed up before you even try to sell it. If you are a first time flipper, the chances are that you will feel shocked when you see the prices for materials and labors are high. But, if you do not invest in rehabs, you won’t be able to ask for the market value price for your flipped home.

People want to purchase high quality homes, and they will not make a good offer on your house if you do not provide them with that. Do not over-rehab your property, but putting work into the house you flip will bring it to market value a lot more easily than if you try to cut corners.

Be Courageous

To finally put the trigger on the deal, you need to be courageous. Flipping a house is not an exact science, and no one can tell you what price your home will sell for after you have renovated it, or how much the whole renovation will cost you. You need to be aware that everything is an estimate. You can also never know if you’ve failed to see a major flaw in the home you are buying for a flip, which the sellers are aware of, but choose not to tell you about. You will wonder why these people are selling this house for such a low price.

And the money your flipped house will sell for depends on who will be out shopping at that time your home is ready to hit the market. No one has the answer to why two very similar houses sell at a very high price difference. Sometimes all you can do is hope that your flipped home sells for a good price when it hits the market.

The best advice we can give you is no matter what you do, you need to let wisdom, diligence, honesty and common sense be your guides. If you approach this whole process the right way, armed with the right knowledge and tools, you will not fail. Flipping houses is a very lucrative industry, and if you take enough time to do it the right way, you can earn an awesome profit all for yourself.

Use this article as your guide, read it a couple of times and educate yourself properly. Believe us, you will be glad that you did. If you are successful, you can even start your own business or agency, because you are selling a product that people always need; you are selling homes.

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