Flipping homes for money does not happen overnight. People make good money flipping homes every day in this country, but every one of those people had to do their research, take some risks, and understand the different lending options available before they jumped into it. The footwork put in before the deal is made will serve you well as you navigate the uncertain waters of real estate investing.
Buying a home and flipping it, is not for the faint of heart. So if you’re thinking about testing the waters of home flipping, read our introductory guide on how to get started.
Is Real Estate Investing for Me?
Let’s put it this way, real estate investing is not the type of thing people stumble into without any interest in it. Most successful house flippers possess a couple of natural attributes that serve them well in the home selling business. Some might describe it as follows:
- A natural hustle: If you’re one of those people that doesn’t have to be told what needs to be done and you just go out there and get after it, this might be for you. Selling homes is a hustle and you need the inner spark to get it done.
- An eye for a good deal: Some people are good at identifying a potential deal. Whether that’s getting a household item or the best deal on a car.
- A mind that’s comfortable with numbers. Real estate investing will have some surprises and some unexpected costs, but a successful investor knows how to crunch the numbers and get accurate and precise estimates on costs.
- A cursory understanding of the market. While you don’t have to be a real estate expert, knowing the market that you’ll be working in will make it easier for you to spot a good deal or a bad one. Having an eye for potential good investments serves a house flipper well. This includes knowing neighborhoods, upcoming city renovations, developments, etc.
- Have a solid and fundamental understanding of home repairs or know someone that does. Being able to spot a good contractor can be a lifesaver. You don’t have to be the world’s greatest handyman, but having some understanding of home repairs or some experience hiring trusted contractors puts you in a better place. It also makes it easier for you to spot needed repairs on a possible flip.
4 Tips Every House Flipper Should Know
There is no golden book or Holy Bible of house flipping, but there is a lot of tried and true advice out there from people that have learned things the hard way. We have written a lot about finding the right flip and breaking through the real estate business, but there are several other key points to consider.
Here’s some sound advice to keep you on the right track.
#1 Arm yourself with knowledge—consider a real estate license
While there is no set requirement to become a house flipper, getting a real estate license is a good place to start. Going through the process teaches you to break through the real estate lingo, learn important terms, regulations, forms, HOAs, etc. You make connections in the community. You also get access to the MLS to better gauge prices. Also, going through the classes and instruction will solidify your commitment to the endeavor.
If you want to jump in right away, contact a person you trust and know is a solid real estate agent. Perhaps you have good connections already. Use them.
#2 Establish good connections with reliable contractors
You don’t want to wait until you have signed on a house to start looking for your contractors. If you know the market, do your research on well-vetted contractors and workers. Even if you plan on doing a lot of the work yourself, you’ll likely need to hire a licensed contractor for a job or two. Establish connections with them before so that you have a go-to and know who you can trust.
#3 Work the math— flipping homes is a numbers game
Before jumping on a deal, make sure that you know how to work some numbers and accurately estimate the cost of certain repairs. For example, putting in new floors. Make sure to factor in the cost of all materials and labor. Don’t forget to factor in taxes, insurance, mortgage payments, real estate commissions, and other marketing costs.
#4 Don’t over-improve the home — this is not your dream home
One common mistake some beginning flippers do is they try to do too much to a house. The fact is that even in a seller’s market, you’re not going to get a home for more than the market is willing to pay. This has a lot to do with the neighborhood and the home itself. Remember that you’re not working on your dream home. You’re just working to get the home sold without overspending on repairs. For people with vision, it’s almost a creative experience imagining what a house can become. They easily get carried away, especially at first. Be frugal, be cautious with what you spend on repairs.
Get the Right Loan Fast and Kickstart Your Flipping Dreams!
We didn’t even get to the money part. The kind of loans that you get are a central part of the house flipping business. Here at Entrust Capital Funding, we offer reliable hard money loans so that people don’t have to waste time going through banks.
Ready to get your hands on some real estate investment loans and opportunities. We want to hear from you. Call Entrust Capital today.