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Without risk, there is no reward
Let me give it to you straight. Flipping houses is right for anyone open to inevitable obstacles, possible financial loss, rapid growth, and genuine hard work. If this still sounds as attractive as your favorite HGTV series makes it look, taking a leap of faith and seeing how things go in this house flipping game may be right up your alley.
Real estate trends are constantly being analyzed, but there is no solid formula for what you may uncover in an investment property until you open a few doors. Literally. Investing in real estate properties with a goal of renovation and immediate resale is a smart move because housing will always be in demand. It would be great to dive in and swim perfectly on your first try but it’s also okay if you sink. Once you have taken the time to recognize your true WHY and develop a contingency plan for your first house flip, it won’t feel as risky.
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Getting started flipping houses
With real estate being one of the fastest routes to wealth, it’s no wonder why investment properties are one of the most consistent topics at the water cooler. Of course, real estate has always been in style, but interest continues to grow more and more. This is thanks to the countless TV shows dedicated to the message that no matter where you flip houses, you will likely see a decent profit or at least break-even.
When flipping houses, geography is essential.
It’s true – people will always need somewhere to live. A great flip doesn’t always equate to an ideal investment. So, if you spot a property that needs your magic touch but there isn’t a gas station, convenience store, school, shopping center, or place of worship for miles, there is a strong chance it may not sell in a timely fashion for a quick return.
When you speak with investors about flipping houses, they summarize the challenges and brag about the profit. Usually, they don’t share how they found the property or what hurdles they jumped over to purchase the house. It would publicize a secured resource and they may fear their money train will slow down. What this means for you is, if you already have a handle on securing investment properties in a desirable location, you are your own untapped resource.
Let’s break this down a bit. Which aspect of the house flipping process caught your eye?
Hands down, saving money feels great. However, you can’t reach this step without performing your own due diligence. So, remaining privy to current real estate market activity, property tax increases, and structural changes in/near the community can also help you get a great deal.
A lot of investors who jumped into real estate headfirst will probably tell you they had success because each person on their team was motivated. Flipping houses can be just as time-sensitive as it is work-intensive. You can’t do everything yourself so handpicking a trusted team of individuals with a solid work ethic can make or break your flip.
Design & staging
Adding key details to a flip is exciting as you watch your sweat equity come to life. It’s a proud moment that can leave a lasting impression on potential buyers, and your wallet if it doesn’t pay off. Every flip may have its own personality but you may have a knack for flipping if you can get these calculations down to a science, or design without breaking the bank.
When the challenges supersede the investment, take that win and run with it. This will not always be the case, but you will survive to flip another day if you planned ahead for financial loss.
If you outsource tasks on the way to the closing table, the net profit can be a little disappointing. Once you pay the title company, realtor, contractors, house cleaning company, and home stagers you may start thinking – I could have done this myself. Maybe you could have. But would the property have sold when it did? Would you still have time for other commitments? You may even feel that house flipping is not for you, depending on the outcome of your first closing. However, it’s all a learning experience that you can apply to your next real estate flip or financial investment.
Learn from the mistakes of flips gone wrong
Everyone’s house flipping journey can differ, so never get too confident in your wins. Real estate investing is a field that has created opportunities for a multitude of families in the most strenuous economies. Take some time to investigate house flipping stories that were not successful. Educating yourself on someone else’s misfortune can possibly save you a lot of money and time.
Flipping houses can be a full-time job with limited vacation days and shabby benefits if you do not think it through. To get ahead of the cons of flipping real estate properties, plan out your expenses and goals leaving no stone unturned. The unexpected can always arise but at least you won’t be totally blindsided by what comes your way.
How to get started as a house flipper
Ask yourself how much time you can commit weekly to rehabbing an investment property. If you are buying a house with the intent to resell as soon as possible or for the property to provide long-term rental income, getting the property ready fast is even more pertinent because you are losing potential income each day the property is vacant. Flipping a house requires time that you may not have, but the best way to get started is to get started. You won’t know until you try, right?
About the Author
Licensed Florida Real Estate Agent
Debrah is a Licensed Real Estate Sales Associate and Certified REO & Short Sale Specialist with a growing team of successful agents. She educates future first-time homebuyers via her co-created e-course and local events. Her 90% referral business has allowed her to close over $13M in sales transactions.
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