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"Can you really make money house flipping?"
That's a question that I'm often asked.
And my reply is always an emphatic yes(!), you certainly can make money by buying houses, fixing them up, and selling them for a profit.
Be very cautious, however, because like any major investment, there are risks to go along with any possible rewards.
"Talk About Easy Money!"
Watch out for the "You just won't believe the money I've made!" stories that you will undoubtedly hear, or have by now already heard. An idealized view of how to make money flipping homes might go something like this ... You run into an acquaintance you hadn't seen in a long while. You ask how he's doing, and it seems he just can't wait to tell you how much money he's making "doing some house flipping".
He tells you how it just so happened that a long-lost relation of his recently died, and he got the opportunity to "buy the old man's house for next to nothing".
According to him, he "puts a little bit of money" into renovation, and has people virtually standing in line for the privilege of buying his house. He'll tell you he sold it for more than he was asking, and ended up "making a killing" on it. ...
Well, while I know that this scenario might happen, it is more the exception, rather than the rule. Especially for the average person who's just starting out in house flipping.
Usually, people who are well-connected in the real estate industry (real estate agents, bankers, lawyers, accountants) tend to have a leg up on the really good buys. And even then, the thought of trying to make money in house flipping (and doing it right) would probably tend to force most people out of their comfort zone, and thereby abandoning the thought altogether.
If you're wanting to make money flipping houses, why not be sensible, and start with a doable goal in mind, one with more reasonable expectations. Do some smaller property flips, then gradually work your way up the "degree of difficulty" scale if you so desire.
Start out slowly. Try a house with little work to be done. Just some cosmetic and aesthetic issues, nothing really drastic. Paint it, put new carpet down, clean it up nice, maybe a slight upgrade to the bath, plant some bushes, etc., and sell it.
I realize I'm making it sound much easier than it really is, but the principle is the same when flipping properties for profit, as it is in any other business. Sell it for more money than what you put into it from the beginning. It really is that simple.
Now granted, you're not going to make a large amount of money (using the previous) example if starting slowly in house flipping. You might make just a few thousand dollars, maybe a little more. But it makes sense (and dollars and cents) to really get a feel for the game before taking on larger - and certainly costlier - projects to make money with house flipping. Gradually work you're way up your personal "comfort level" when determining your next project.
House Flipping "Must-Do's"
Do Your Homework
Get to know (if you don't already) some real estate agents. Let them tell you what motivates people to buy houses. For example, starter homes are excellent for single, or one-child families that would only require 2-3 bedrooms, and one bath. Obviously, as the family gets bigger, the wants and needs get "bigger" as well. Consequently, when determining the resale characteristics for a 3 bedroom, one bath ranch (3B/R,1B), you'll probably want to add a second bath. This would greatly enhance the attractiveness for a prospective buyer. The same can be said for upgrading kitchens, bathrooms, finishing a basement, etc.
Also, have them tell you where the hot spots are in town in regard to overall attractiveness, and consistent resale ability within a given part of town.
Find Overall Comfort Level
Determine how much time you want to devote to something on this level. To make money flipping a house, it takes a lot of commitment to see a project such as this through to successful completion. Paying attention to details is vital. Unless you can "give your all", I would look elsewhere to invest my money.
Determine Financial Stress Level
If you're even thinking of borrowing some money to flip houses, you might be taking on too much. By that, I mean never borrow money you don't have in the first place. You're compounding a problem by putting borrowed money at more risk by investing in something that may, or may not pay off. And, on top of borrowing money you don't have, there's always the possibility of sitting on the property (won't sell) far longer than you originally planned for, adding to an already stressful and anxious situation.
What Are Your "Handyman" Abilities
Be honest with yourself. Don't be afraid to admit your limitations with regard to the ability to do-it-yourself, and do well. If you're really good at painting, then paint the whole house. Save some money. This type of thing will go a long way when determining your ability to make money in house flipping.
On the other hand, if you've never tackled something along the lines, for example, installing crown molding, this is probably not the time to "see what you can do", to save a little money.
You want your property to show well. Be smart and hire a professional to do the installation because sloppy, amateurish work is readily apparent to anyone with a a pair of eyes, especially if those eyes are eager to buy. Keep in mind that such work will naturally lead the prospective buyer to question the rest of the work performed during renovation. And with that, you've just lost a possible sale. Don't skimp. Hire competent sub contractors for professional results.
Buy as cheaply as you can, and sell big.
Simple isn't it?
Try doing the remodeling yourself, and if you can't fix it up yourself, hire some sub contractors to get the project done for you.
Of course, by hiring sub contractors, you're eating away at the precious bottom line. But be smart. Don't try things you really don't have any business trying. You'll know when you can, and cannot do something to your property. And obviously, if you are really good with your hands, go ahead and do whatever it is you want to do, because you can save (make) a lot more money.
Oh, and along the way, you're bound to find out what I've known for a long time, that house flipping really is a lot of fun!
| House Flipping Helper's Blog Excellent house flipping information with emphasis on what you do after you acquire your property, and how you go about making it profitable. |
| About Us Just who the heck are these House Flipping Helper guys, anyway? Well, this page is about us, and how I might be able to help you in your quest to flip houses with the best of them |
| House Flipping Information FAQ's House flipping information based on frequently asked questions and their respective answers |
| Foreclosure Property Foreclosure property research tips and listing information |
| Building Permit Before you start any remodeling project, always check to see if you are required to have a building permit for any restrictions and obligations your project may fall under |
| Selecting A Remodeling Contractor Become informed before selecting a remodeling contractor for your project |
| Home Remodeling Cost Help for when you want to estimate the home remodeling cost for your house |
| Remodeling Demolition A necessary, but dirty part of your renovation is the demolition relative to your particular rehab focus. Proper tear out methods will ensure a safe and sound process. |
| Remodeling Guide Using a remodeling guide will help you to determine your budget, and can help you successfully manage your remodel project |
| Potential Remodeling Pitfalls Information and clues regarding hidden remodeling pitfalls that may potentially be too expensive to fix |
| Drywall Information Various drywall information regarding related material prices, installation and finish costs, general info, as well as repair help for various wall damage situations |
| How To Repair Drywall Basic information on how to repair drywall. Everything involving repairs for cracked plaster, fixing large holes in walls, and small patch jobs |
| General Repairs HFH looks at several general-type repairs that you're sure to come across in any type of house flip opportunity |
| Securing A Vacant House Securing a vacant house is a priority for the smart flipper |
| House Flipping Site Map All the pages within this website are listed here on the House Flipping Site Map |
| Contact Us Do you have any questions or concerns? This is the place to address them. |
| Related House Flipping Web Sites Various house flipping web sites along with sites related to helping you with your flipping project |
| Tile Prices (Labor and Materials) A brief review of overall tile prices, including labor and material for the average remodeling project |
| Vinyl Floor Costs Brief analysis for determining vinyl floor costs to help with your remodeling budget |
| Carpet Installation Prices An analysis of carpet installation prices for your budgeting needs |
| Bathroom Shower Ideas A look at a few modest bathroom shower ideas that fit any remodeling style and budget |
| Basic Floor Trim Installation Basic floor trim installation guide using common baseboard and shoe mold woodwork materials |
| How To Paint Trim Brief step-by-step instructions on how to paint trim |
| Drywall DIY Patch Repair Instructions for easy drywall DIY patch repair |
| Priming Drywall Information on priming drywall and why you should follow manufacturers specifications |
