Flipping houses is a great way to invest your money. If you aren’t sure what it is, flipping a home is when someone buys a house that needs work, hopefully, at a low price, then they fix it up and resell it to gain a profit. There is some risk involved, but thankfully real estate never goes out of style. There are many benefits to house flipping, including a potential business that allows you to work from home and create your own hours. According to Flipper Force , there is little startup cost and you have an opportunity to improve local communities. If you enjoy remodeling and have some knowledge about real estate, house flipping is a great career option or even a side hustle. Keep in mind that the process isn’t without stress. House flipping requires a lot of work and even more patience, as surprises can pop up along the way when remodeling any home. Also, you’re sometimes at the mercy of the real estate market’s temperature. Here is everything you need to know about how to start flipping houses as a new house flipper . Should you flip or micro-flip?
Micro-flipping is a faster process than the full renovation flip and offers a quick turnaround. If you don’t have a team, it might be an ideal way to get into flipping. According to Rocket Mortgage , micro-flipping is buying houses under market value and reselling them quickly for a higher price. There is no renovating involved.
One benefit of a micro-flip is that you can do it all from the comfort of your home. Most micro-flipping happens online. That’s good and bad news for those interested in doing it as a business. Sites like Zillow and Redfin are major players in the micro-flipping biz, which means stiff competition for a newbie in real estate investing (via FortuneBuilders ). Still, it’s not impossible, and if you enjoy the idea of closely watching real estate market trends, micro-flipping might work. However, if the renovation process gets you excited and you aren’t in a hurry, you’re likely to make more money with a complete renovation or remodel flip. Buyers love clean, newly renovated houses. You need a business plan
Flipping houses is a business. Just like any business, going into it without a plan is unwise. The U.S. Small Business Administration writes that a business plan isn’t as hard as it sounds. It’s a tool to help you outline and project a few years ahead for your business. Business plans help keep you on track, allow you to reach your milestones, and even assist you as you seek funding. A business plan helps possible investors and lenders see you’re serious and you know what you’re doing.
You have ideas and goals in mind. A written plan gets those thoughts in order and helps you and your team see where you’re headed and the end goal. It can also show what’s lacking and missing areas. In your business plan for flipping houses, state your summary first, which explains what it is you’re doing (via Rehab Financial Group ). Next, the mission statement should explain why you’re doing it. Include a CMA ( Comparative Market Analysis ), the project timeframe, and your financial strategies and projections. Build your team
Unless you can do electric, painting, drywall, plumbing, and take care of all the legalities, you need a team. Even if you can do it all, you’ll flip the house quicker with support. A team usually consists of a real estate agent, an attorney, a CPA, an insurance agent, and a general contractor who chooses everyone to assist with the renovation. You can also hire individuals as needed. For example, rather than having a contractor, you can hire an electrician, a plumber, and a drywaller. That part depends on how much you do on your own and how comfortable you are as your own contractor. TRUiC recommends going the general contractor route and mentions that a good general contractor is essential to a house flip. They can mean the difference between a profit and a loss. Think of it this way. Are you working another job? Do you have a family? Without a general contractor on your team, it’s all on you, and you will be married to the flip project.
In the same way, everyone on your team is essential. It can be tempting to save some money by doing the home searching without a realtor, hiring each individual to do the renovations, and […]
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