If you have ever dreamed of getting into the real estate business to make money, but were afraid of the rumored risks and problems, make that fantasy a reality. Making money in real estate can be done. Flipping houses is not just some get-rich-quick scheme. Flipping does require hard work and does not show profit overnight; but, if you know what you are doing, the possibilities are endless.
Many of you have probably seen the real estate shows on television and wondered just how people were able to profit so much from the sale of a house. Flipping is the practice of buying real estate at price lower than market value, improving said real estate, and then selling it for a profit. Some television shows make flipping houses seem really easy. This is, generally, how the problems start. People see these television shows and just jump right in head first. They don’t take the time to really see what goes into flipping, which is how they usually end up flopping. Those investors and realtors on those shows have probably been flipping houses for years. They know what it takes. Well, now you can too.
Finding the right property is the backbone to a successful flip. We’ve all heard the age-old saying, “location, location, location.” This generally means finding the right house in the right neighborhood with the right market value. Always keep an open mind in searching for a house. Don’t jump on the first cheap, abandoned house you see smoking (or preferably, not smoking). Give yourself time to find the perfect house. Fixer upper houses can be found for much less than other houses surrounding it. Do a thorough search. Check newspapers and real estate agencies. Check out any foreclosures that may be ready for a quick sale. But possibly the best way to find the perfect house is to just get in your car and drive around looking. You’d be amazed at what you might find!
Remember the saying, “behind every good man there is a good woman”? Well, behind every good flipper, there is a good team. Flipping is not an individual job. It’s a team effort. A good team would consist of a realtor, a contractor, a landscaper, and you, the investor. The realtor is needed to help put your house on the market and get the best selling price possible once renovations are complete. A contractor is hired to oversee construction and crews. The landscaper is needed to give your house that knock-out first impression. And you, the investor, are there for the obvious . . . cash flow. Keep in mind; you always have the option of not hiring a realtor to sell your property. The decision is all yours.
Once you find the perfect property and the perfect team, it’s time to kick your planning into high gear. A successful flip requires you to be realistic. You must set a realistic budget. Here again, you will have to do a little homework to get some pretty square figures. Once you’ve set your budget, do your best to stick to it. Increasing the budget means decreasing the profit; and, we don’t want that. Also, set a realistic time frame. If you have a house that needs a lot of work, don’t give yourself a two week deadline. That’s just plain ridiculous. Allow enough time for everything to get done at a steady pace. Just like with the budget, you will also need to allow extras for unforeseen problems; and, trust me; there will be some unforeseen problems. When you’ve done all that, it’s time to get started.
Now that the ball is rolling on your flip, you just need a few more tips to make this a successful venture. Know what sells homes. There are three things that can truly make or break the sale of a house: the curb appeal, the kitchen, and the master bedroom. It’s never a bad idea to spend big money on any of those things because 9 times out of 10 you will get back what you put in plus some. The first thing potential buyers see is the exterior of the house; so, the curb appeal is like the first impression. Make your house stand out. Beautiful landscaping and exterior paint colors that compliment that landscaping are main focal points here. As for the kitchen, roomy kitchens with high-end appliances, counter-tops and cabinetry are always huge selling points. Finally, it comes down to the master bedroom. If all you have is a master bedroom, try making it a master suite. Buyers love bedrooms with walk-in closets and bathrooms.
Once you have finished the house, have it appraised and put it on the market. Have an open house to generate more interest and potential buyers. With any luck, you will sell your house fairly quickly; and, if you stick to the tips in this article, you will have a nice profit from it. Who knows? You might even end up on one of those television shows “if you can flip that house.”