Find the Right House
You need to find a home that meets all the requirements for an ideal flipping project.
For instance, the house should be in a growing or improving neighborhood that promises a high resale value. Location is a huge determining factor when it comes to house values. A well-built or renovated home in what’s viewed as a bad neighborhood can sell for tens of thousands less than if it were located somewhere else.
Before you close the deal, make sure you get a professional home inspection, which will be a requirement anyway if you receive a loan.
And make sure you’re fully aware of what you’re getting yourself into. The last thing you want to do is invest in a home that needs so much work you’ll be lucky to break even when all is said and done.
Acquire the Skills
One of the best ways to maximize profits and minimize costs is to do most of the renovation and repair work yourself.
This means acquiring the skills — and licenses — to do so. Some people are handy by nature, while others are almost hopeless.
Regardless, the more you can learn to do yourself, the lower your costs will be.
However, you must hire certified and licensed individuals for certain kinds of work, and those requirements vary by city, county and state, so it’s important to check all government requirements that apply before committing to house flipping.
When it comes to electrical, plumbing, and other specialty jobs, you’ll need to set aside some room in the budget for professional contractors. Not only will it ensure the integrity of the home, but it will also maximize the safety and well-being of future occupants.
Finally, it’s illegal to perform unlicensed specialty work, such as major electrical repairs, which could result in fines or jail time.
So, don’t try to convert a range from gas to electric, repair your heating and cooling system or replace a water heater yourself.
Know the Market
If you want to flip houses, you need to learn how to read the real estate market. Is it a buyer’s market or a seller’s market when you’re purchasing the property? And will that change when you list the fully renovated home?
The rule of investment is simple: buy low and sell high. But unlike other investments, when flipping houses, you should hold the property for the least amount of time as possible. Otherwise, you’re losing money, because the resale price has a definite limit.
In this race against time, any renovations should be made as quickly as possible before the house goes on the market.
That’s why you’ll need to do some thorough market research to determine when and where to buy, as well as when to sell and whom to market to.
Learn Marketing Techniques
Finally, assuming you don’t want to hire a real estate agent and spend more of your budget paying others, you’ll need to learn some marketing tactics.
Play around with different platforms such as Facebook, Instagram, Craigslist and newspapers. You’ll need to photograph the outside and inside of the house — it’s even better if you display video and virtual tours wherever possible — and highlight any features that make the home attractive or unique.
And don’t forget the ‘For Sale’ sign! This alone is great for word to spread about the property’s availability.
From there, you’ll need to schedule some open houses and let potential buyers actually see the property and imagine themselves living there.
Want More on Home Improvement?
This is just a crash course on flipping houses — for more information, check out books at your local library, and check city, county and state building codes for requirements, licenses and permits.
You also can gain more knowledge and skills by checking out some of our other articles!
