Get Started Flipping Houses

How do you get started flipping houses and ensure you are successful at it?

Flipping houses has become incredibly attractive as a business and investment. It can be highly profitable and empowers individuals to take control of their own finances, time, and future. So how does it really work? What tips and practices can improve your success? How do you get going, even if you have little money to work with?

Flipping Houses 101

​Flipping houses has boomed in popularity thanks to an array of TV shows, but has been a huge money maker for savvy individuals and investors for years before ‘reality’ television was even invented.

The basic concept of flipping houses is simple.

Buy Low

In order to profit real estate investors need to find properties that they can either buy at undervalued prices, or to which they can add value. This can be via finding distressed properties or distressed and motivated sellers, or simply finding real estate which is ripe for improvement. The deeper your discount, and wider the spread between your purchase price and the highest possible retail price, the more profit potential there is. And the lower the risk may be.

Add Value

The ‘house flipping’ most are familiar with from TV is all about remodeling and rehabbing houses. Investors can go in and make cosmetic improvements, or even structural repairs and alterations to elevate value. However, adding value can also be about improving the performance of an income property, or even simply adding value by providing buying and investment convenience for the end buyer.

Sell For A Profit

Of course you don’t actually typically get paid as a house flipper until you’ve sold the property on to another buyer. As an independent investor you get to choose your own resale prices and profit margins. Just make sure you do all the numbers to accurately calculate your net profit.

The Benefits of Flipping Houses

There are many rewards of flipping houses.

Money

Perhaps the biggest and most obvious draw to flipping houses is the money. It promises substantial paydays. Each deal is different, and each investor gets to set their own pay, but many individual deals will payout more than millions of others make in a single year.

Time

Even more important and significant than the money is the time freedom that individuals gain when they get started flipping houses. You get to set your own schedule, work when you want, where you want, and mostly doing what you want.

Sellers

While the goal may be to negotiate the lowest possible purchase price, sellers also benefit from having a buyer take their homes and debt off their hands. Investors are vital to buying properties which otherwise might never sell and may just end up as foreclosures and dead weight assets.

End Buyers

End buyers benefit from being able to buy a product they want in a way they want. This may be landlords that need rental properties which are ready to go, regular buyers who need a finished home, other rehabbers needing inventory, and others. Even the tenants benefit by being able to move into nicer properties.

The Community

The local and greater community benefit immensely every time a home is flipped. It brings up the appeal and value of the neighborhood. It can reduce crime and social issues. It creates local jobs, and puts more money back into the local economy. It even supports the state and national economy.

Fun

There will be days when flipping houses is hard work. But in general, if organized well, flipping houses is far more enjoyable than most jobs out there. You get paid very well for doing something you love. That’s priceless.

House Flipping Success Tips

These are some of the critical factors which will impact your level of success as a house flipper.

Hold Time

Holding times will directly impact your level of risk and profit. The longer you hold onto a property the higher the risk and more expensive it is. The faster you resell the more equity you retain and faster you can get onto the next deal. Some statistics base their house flipping numbers on homes resold in less than 12 months, but savvy investors can turn a property in just days.

Managing Contractors

Your ability to manage contractors will directly affect your hold and turn times, your profitability, the quality of work, and ultimate success. Get good in this area.

Financing

One of the big advantages of investing in real estate is the ability to use financial leverage. But how much you can borrow, how fast, on what terms, and who you can borrow from or partner with makes a massive difference in your competitive and operational edge, and your net profit. For this reason many flippers will seek out private lenders to work with.

Being Prepared For The Unexpected

One of the biggest dangers in flipping houses is failing to be prepared for unexpected costs, delays, and paperwork hiccups. Be optimistic and hope for the best. But always prepare for things to take longer and cost more than you expect.

Taxes

You may find you pay a lot less in taxes when you start flipping houses. This is true even though you are making a lot more money. This is thanks to all the extra deductions, write-offs, and perks of having your own business and investing in real estate. Just don’t bury your head in the sand and wait until the last minute to deal with taxes. Get ahead, cut your tax liability, and maximize your breaks by getting a good accountant, and working with a sound tax strategy all year round.

Multiple Exit Strategies

Having multiple exit strategies will ensure your success, even if everything doesn’t go according to your plan. Perhaps your main goal is to fix up and resell a property to a retail buyer. But perhaps you can also just flip it as-is to another rehabber, pull in a partner, convert it into a rental, or move it with selling financing or a rent to own deal. It’s good to know your options.

Know Your Numbers

Success in real estate investing is about knowing your numbers. Know your property values, your ROI on specific home improvements, your area rents, and market trends data such as average days on market (DOM). Invest objectively by the numbers, not emotionally.

How To Begin Flipping Houses

How do you begin?

Learn

Invest in yourself, your knowledge, and real estate education first. The more you know the better. Get a good base. Then start taking action and earn while you learn.

Setup Up Your Systems

Get organized. Put together a system so that you know the steps and can do more deals, or plug in an existing proven system and get going.

Take advantage of these online real estate systems to help you locate future deals:

Build Your Resources & Team

Compile your resources and team. You’ll need a variety of professionals and vendors in your corner. This includes a real estate attorney, insurance agent, private lenders, title company, contractors, and a coach. Line up your funds, your sources of deals and motivated sellers, your end buyers list, and marketing materials.

Get Busy Finding Deals

There is no substitute for action. All of your goals are on the other side of taking action. Get started doing whatever you can, step by step. Reach out to potential sellers, make multiple offers a day, and the rest will fall into place.

Flip Houses With No Money

You can really flip houses with little to no money of your own. Having some capital can help, but even once you are flush with capital you’ll probably find it much better to continue to leverage other people’s capital in your deals. That’s how legends like Warren Buffett, Elon Musk, Donald Trump, and Richard Branson have built their fortunes.

Tap Your Personal Resources

Many new investors actually have access to a lot more money than they think. Maybe you have a garage and attic full of items you’ll never use. Maybe it is time to liquidate that. Perhaps you have stocks and bonds that are headed for a dive and it is better to move that money into real estate. Or you could have a 401k or IRA which is better invested in flipping houses.

Partners

If you don’t have the above items you can bet that some people you know do. Team up with family, friends, or coworkers, or find investors that are already in the game and partner up to pool your resources and split the profits.

Institutional Lenders

Banks, mortgage lenders, business loan providers, rehab loan lenders, hard money lenders, and others are all eager to fund good real estate deals. Many contractors and stores will also provide credit to help flipping and staging houses.

Private Lenders

There are also many private individuals who have found their niche in loaning their money to house flippers. These are a great source for investors with little money or credit of their own, and who want access to capital on good terms, and fast. To locate these Private Lenders in your area, Click Here for more information.

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