Getting into the business of flipping homes is no easy task, and there are a lot of risks involved. That being said, if you can make it work for you, there is a lot of potential profit to be made. If you want to build a successful career flipping homes, make sure to follow these seven steps:
- Make sure you have enough money on hand before you start
- People often tend to underestimate just how much money goes into flipping a property. In addition to purchasing the property, you need to account for closing costs, inspection fees, legal fees, and other costs. The general rule of thumb is that you should pay no more than 70% of what you intend to sell the property for, minus repair costs, so keep that in mind when you budget.
- Do your research before you invest in a property
- It can be tempting, when flipping homes, to invest in a property that seems appealing on the surface, but you should always make sure to do your research first. A superficially good property may be located in a bad market, or have significant title defects, or may have other issues that make flipping it a bad proposition.
- Always have a property inspected before you flip it
- Not every problem with a property is apparent just by looking at it. If you are interested in flipping homes, get used to performing inspections, which can reveal issues that can make your purchase more costly than it first appears.
- Learn which contractors you can trust
- While there are some renovations you can perform yourself, you will probably need to hire professional contractors on a fairly regular basis. Thus, you should make sure you have contractors who are reliable, professional, and can be trusted to work on your budget and schedule.
- Build a network of contacts in your market
- Some of your best options for flipping homes will not come from public listings, but instead will come as a result of your personal contacts. Knowing real estate agents can help you get leads on new homes going on the market, while having a network of prospective buyers can help you flip properties more easily.
- Learn when it is time to flip
- It can be easy to get too invested in a property, both literally and figuratively. You need to learn when you have done enough renovations, and start getting ready to flip it. Otherwise, you can find your costs outpacing your potential profits, and lose money on your investment.
- Be realistic about pricing
- It would be nice to think that every property will result in major profits, but it is better to be realistic about pricing. Keep in mind what other similar properties in the area are selling for, and keep your price within a reasonable range, if you want the best chance of flipping your property on a good timescale.
At Liongate Homebuyers, we assist our clients with a variety of services related to buying and selling real estate, including purchasing homes for cash. We have experience handling real estate financing, especially for developers and house flippers. If you are interested in selling your home for cash, please contact us at 516-548-6553, or visit our contact page.
