How much do you know about flipping houses to make money?
Real estate investing is an ever growing market with great potential for profit.
There are many ways one can build wealth with real estate: becoming a landlord, making money with AirBnb, flipping houses, etc.
The latter, although in need of an upfront substantial investment, is a great strategy to earn good money. If you play your cards right..
House flipping isn’t a new concept. In fact, it’s been around for quite some decades.
In theory, flipping houses sounds simple: you buy a rundown property, repair it and make it look pretty, then sell it for more than it used to worth.
Transforming under market value houses into ready-to-live-in homes can be a profitable business model.
Although the media advertises house flipping as a fun and interesting project, it’s important to know that doing this is anything but effortless!
It’s not easy, but it’s doable. Some earn as much as 6 figures a year just by upgrading ruined houses for sale.
Here are some of the (well known) strategies house flippers use to make money.
How to flip a house for profit
Never stop learning
This is just common sense and applies to all businesses, not just real estate.
Never stop learning about house flipping and always stay up-to-date with the latest profitable strategies that apply to you!
Familiarize yourself with house flipping fundamentals: learn about the 70% rule, read about after repair value, and so on.
Always be up to date with housing costs and how to buy a house, to avoid losing money.
Seeing how house flipping requires you to spend money in order to make money, you’ll have to be very careful not to jump head first lose your shirt!
Staying up to date with the latest statistics in real estate is essential, especially when it comes to which home improvements are worth the investment!
Since your main goal is to spend as less as possible on repairs in order to maximize your profits, you should know which home improvements maximize a home’s value.
Focus on the wrong improvements or get lost in the little things and you could end up losing a lot of money!
Avoid wasting time and funds on insignificant details. Fix the important parts of the house and let the future owners decide how to tweak the rest.
Network left and right
House flipping is not exactly a one man show.
You’ll need to network, constantly, and find the best people to work with.
You’ll need a team of reliable contractors. It’s not like you can do all repairs by yourself! That’ll take forever. Not to mention it doesn’t matter how handy you are, if fixing up your fixer upper takes years, you’re not exactly making any money in the meantime, are you?
Meeting other house flippers can be a good thing too. You may not be partners in business, but you’re not “enemies” either. Many start out flipping houses with the help of a mentor, a.k.a. a fellow house flipper. Others might collaborate with real estate agencies.
Target the right market
Who is your target market?
Are you buying a decrepit house in a neighborhood with great schools? Or is the fixer-upper in a neighborhood more suitable for retirees?
You should know, more or less, who are your potential buyers. This will help you understand how to fix the house in a way that your target market will appreciate it.
If your target buyers are young couples or families, you might want to avoid traditional setups and give the property a modern look.
It’s details like these that can make or break a deal. Although not all buyers are ostentatious, many will walk away if the house doesn’t have a vibe that resonates with their wants and needs.
The price is right on your house
The way you price your property for sale counts a great deal.
Ideally, you should buy a rundown property for the lowest price you can negotiate, spend as little as possible to renovate it, then sell the heck out of it and become rich.
However, house flipping isn’t all rainbows and unicorns.
It really doesn’t matter how much you invested in your new real estate gig, overpricing your property won’t help you sell it faster!
House flipping is all about working fast, being efficient, selling and moving on.
Knowing just the right price to ask for your newly fixed house is essential, if you want to ‘get rid of it’ as soon as possible and take on a new project.
Have you ever tried house flipping? How did it turn out for you?