In terms of real estate investments, there are very few approaches that are as popular, or as quickly profitable as fixing and flipping homes. Flipping homes has become an extremely popular approach to making money off the real estate market. You may be thinking, “yeah I want to flip homes, but what do I do next?” This is a common question, and unfortunately a complete guide to learning how to flip homes would be dozens of pages long. Flipping homes is much more complicated than it appears and requires a great deal of research and learning on-the-go.
However, if you are looking for an easy, down and dirty approach that will help you outline the process of flipping a home—this article is for you. Here is a basic overview of how the process works.
- Research where you want to buy and look for neighborhoods that already have lots of “flipped” homes that are selling.
- Make sure that you run the numbers. You want to be able to buy low and sell high. But selling high means selling high within reason. Look at the other comps in the neighborhood to see what is really selling.
- Always look for homes that will not only sell and sell quickly, but ones that you could also rent out if needed.
- Buy the home, using a hard money loan or cash. Don’t do a traditional mortgage.
- Make a budget for renovations. Make sure to have extra cash on hand just in case.
- Start doing the work. You will need a contractor or someone who knows what he is doing and someone who can pull permits of necessary.
- Make your improvements, but remember this house isn’t for you, it is for the general public. It is supposed to be a home that should appeal to a wide variety of buyers.
- Do the improvements the right way, but make sure that you aren’t taking too long. The longer you hold on to the house, the more money you will lose.
- Sell the house, and price it appropriately. Again, look at those comparison houses in your neighborhood. The right price is crucial in selling flips. You may think the property is worth much more, but you need to price it according to the neighborhood. Otherwise, the house may sit there, become a stale listing and you will only lose money in the long run.
Remember, fixing and flipping is a huge investment and it comes with a lot of risk. You should never jump into the process of fixing and flipping homes without really thinking about what is involved first before you jump in. However, if you take your time, do your research and really take the time to approach fixing and flipping correctly, you may just end up getting the kind of returns you dreamed of with your investment.