If you are new to the market of house buying and flipping, you might have already realized that there is still so much to learn regarding the field. Unlike what you see in social media, the process of flipping properties is not as easy or straightforward as it appears.
However, it is possible to earn real money and be successful in the business as long as you allot time and effort into learning every background and detail of it.
Even better, there are ways to squeeze out your learning curve and place safeguards to minimize risks as you do business.
In this article, we will teach beginners the steps on how to flip a house so stay tuned!
- 1 Step 1. Know the neighborhood
- 2 Step 2. Choose your ideal market
- 3 Step 3. Acquaint yourself with the numbers
- 4 Step 4. Set up an entire house flipping business plan
- 5 Step 5. Confirm finances
- 6 Step 6. Build key networks
- 7 Step 7. Search for a house to flip
- 8 Step 8. Inspect as you buy it
- 9 Step 9. Renovation
- 10 Step 10. Market your fix-and-flip property
- 11 Final Thoughts on Home Flipping
Step 1. Know the neighborhood
As we have said, house flipping and real estate aren’t easy markets to dive into as you do business. Going into battle without arming yourself properly will get you wounded or even killed.
So, it is only reasonable to spend a lot of time and effort researching and studying everything about the real estate market, how it all works, and choosing the right location to invest in.
Doing such can arm you with knowledge in engaging towards the market. It is even a good idea to work with a real estate agent who can advise you throughout this process.
Step 2. Choose your ideal market
Not all markets are fit for your flipping business. For instance, if you possess $40,000 to work with for your house flipping business canvas, you wouldn’t want to start your house flipping career in locations where properties begin at $1 million.
Even the help of wise financing and investment property loans will not be able to make those two ends meet!
The lesser cash you have on hand, the lower the house pricing that you are able to work with for your investment. Choosing your ideal portion in the ocean of markets will be your stepping stone in landing your first project.
How much money will you have to work with? What markets can you afford to flip your first house in? You must ask yourself these questions as you scout through markets to find the perfect one for you.
Step 3. Acquaint yourself with the numbers
When you are already able to find your ideal place to dive into real estate. Immerse yourself with the numbers and analytics surrounding that place.
In this case, Westchester County. You must be able to study different statistical data regarding Westchester as you devise a plan for your flipping career.
The population demographics, economy, salary distribution, investment property marketplace, their current prices, and the real estate trends of the county must be taken into consideration for you to know how to attack the market from an angle that will get you a big advantage in the entire game.
With this, you can be more specific regarding the objectives and procedures in your business plan.
Step 4. Set up an entire house flipping business plan
As a real estate investor, you are an entrepreneur – which means you need a business plan. It must include a budget, timetable, and project scope. It can just be very simple.
How much do you have to put up? How much of your savings do you want to keep on hand in case something goes wrong? Do you have enough cash on hand to cover any unforeseen expenses until your lender reimburses you?
What is the scope that you are most comfortable with? Kitchen and bathroom renovations, new flooring, new paint, and new fixtures are all good places to start. These questions are very beneficial if you’re flipping houses on a budget.
Step 5. Confirm finances
As much as possible, don’t put yourself in a position of, “Great, it worked! Now, how do I come up with the money?”
Before you start making a move for your plan, make sure you have lenders who can invest in your deal. Affirming your finances will set you into managing your funds and expenses properly and taking your business plan into action.
Step 6. Build key networks
Unless you are working alone in the business, half of it is actually about building networks. Creating relationships is crucial before you buy your first fix and flip house because they are going to be key workers which will transform your house into a market-worthy property.
Building a network of people includes a realtor, home inspector, general contractors, roofers, painters, electricians, HVAC experts, plumbers, and even waste disposal specialists. Try to obtain inexpensive, well-rounded personnel, as well.
Their combined efforts will prepare your house for flipping, but it will also come with loads of trash which is where the dumpster rental service in Westchester comes in. Servicing companies such as the Redbox+ can provide you with a dumpster to accommodate all your junk, and can haul all your waste away from you after the renovation process!
Step 7. Search for a house to flip
Another crucial thing about learning how to flip houses successfully is finding the best deals.
This means not only purchasing below current market value, but also with margins big enough to shoulder your expenditures: all of the renovation fees, cost of your time and work, and realtor fees.
Step 8. Inspect as you buy it
Seal the deal and purchase the property that you have chosen to flip using your resources and business plan. But this time, you must also consider obtaining a home inspector. Home inspections usually last for a few hours and are very thorough.
It should be made sure that the property is upright structurally and that all of its systems are in good working order.
After the assurance of the absence of any unpleasant surprise, walk the situation through with several contractors and go do work.
Step 9. Renovation
It’s time to go to work! Clocks are already ticking from day one. You’ll be paying interest and other carrying charges every month: taxes, insurance, utilities, and any other charges associated with that property’s ownership.
In simpler terms, you’re already losing money! The faster you can finish the modification project, the sooner you may put your house on the market and pay off your loan, and the sooner you’ll get your money while reducing the cost of renovation at the very same time.
Step 10. Market your fix-and-flip property
It’s time to sell your property! This step in flipping homes is usually the simplest.
Before purchasing your first investment property to flip, make sure you grasp the fundamentals of real estate pricing. This is mostly taken care of by your realtor, so make sure you get a professional realtor for the area.
Despite the aforementioned, you will ultimately be the one deciding on the final pricing, so your profits will always be up to you. Nevertheless, you can depend on your realtor’s expertise for the pricing.
Final Thoughts on Home Flipping
It’s easy to feel overwhelmed while learning how to flip a house and making your first transaction. Lean on other professionals, including your lender, contractors, home inspector, and realtor.
Get all the opinions you need just to become a little certain. Also, never stop building your professional network as you venture through the business.
Most importantly, just begin implementing these measures! Search and study can assist you to avoid blunders, but it is a process that guarantees positive results and profits in house flipping. Good luck!