House flipping is becoming an increasingly popular way for Americans to invest in real estate.
Part money making tactic, part do it yourself project, house flipping is as much a hobby as it is a job. However, it’s not for everyone, so here are four things you need to have to be able to flip a house without a hitch.
When it comes to flipping houses, time is of the essence. If you’ve taken a loan (private, hard, bank or otherwise) out for the initial purchase of the house, then the interest will add up if you don’t make your profit soon enough. Additionally, even if you purchase the house in cash and don’t have interest rates hanging over your head, you might still have to pay for things like utilities and taxes until the house is sold.
One of the most important things you need when it comes to flipping houses is knowledge. If you don’t know how to flip a house, you probably shouldn’t do it. House flipping flops can be costly and rather than making a good return on your investment, you could lose your shirt. (Click here to read our House Flipping 101 post to help get a good grasp of the basics.)
You should know market trends (which are typically 3.75 years up and 9 months down). Pay attention to the neighborhoods, the price, and the location of the house you intend to flip. All of these are important things to consider when you’re looking for a house to flip, and the wrong choice could spell disaster.
The reason that so many house flippers are professional builders and other skilled professionals is because they have the right skills to be able to fix and flip houses. People who already know how to do things like woodworking, plumbing, painting, and so on, will know how to flip a house better than people who don’t.
In many cases, making upgrades and repairs on a house is going to increase the return on investment dramatically. If you’re capable of doing the work yourself, that means you don’t have to pay someone else to do it, which means more for your bottom line.
Of course, I’m a big proponent of outsourcing and automating your businesses so, while it’s important to understand the basic skills necessary to flip a house, as soon as possible you should work on delegating those tasks to others so you can focus on the work of building your core business.
Another really important thing for a successful flip is patience. Too many house flippers get excited at the first prospect and buy because they’re eager to see their return. They also tend to hire the first people they come across to make repairs and upgrades. These can both be costly mistakes. The point here is to make money, and not getting competitive quotes for work or waiting for the right opportunity isn’t going to lead to a good flip.
It’s good to take massive action, and not be afraid to fail, but sometimes you also need to tread carefully and understand where you are going. It is a fine balance between the two aspects of working on your business that takes time and experience to really get a good hold on. But if you take enough action and pay attention to the results, you will get to the point where you instinctively know where and how to move forward to get the best results.
If you’re looking for more tips on how to flip a house we have a ton of great information right here on House Flipping HQ. But the best way to learn is to get out there and start. Everyone is going to have an opinion on what you should do, but the ultimate captain of your house flipping ship is you, so get up there and unfurl those real estate investing sails!
Just remember no matter what tips you get, at the very least you need time, skills, knowledge, and patience to successfully flip a house.