House flipping is becoming an increasingly popular way for Americans to invest in real estate.
Part money making tactic, part do it yourself project, house flipping is as much a hobby as it is a job. However, it’s not for everyone, so here are four things you need to have to be able to flip a house without a hitch.
1. Time
When it comes to flipping houses, time is of the essence. If you’ve taken a loan (private, hard, bank or otherwise) out for the initial purchase of the house, then the interest will add up if you don’t make your profit soon enough. Additionally, even if you purchase the house in cash and don’t have interest rates hanging over your head, you might still have to pay for things like utilities and taxes until the house is sold.
2. Knowledge
One of the most important things you need when it comes to flipping houses is knowledge. If you don’t know how to flip a house, you probably shouldn’t do it. House flipping flops can be costly and rather than making a good return on your investment, you could lose your shirt. (Click here to read our House Flipping 101 post to help get a good grasp of the basics.)
You should know market trends (which are typically 3.75 years up and 9 months down). Pay attention to the neighborhoods, the price, and the location of the house you intend to flip. All of these are important things to consider when you’re looking for a house to flip, and the wrong choice could spell disaster.
3. Skills
The reason that so many house flippers are professional builders and other skilled professionals is because they have the right skills to be able to fix and flip houses. People who already know how to do things like woodworking, plumbing, painting, and so on, will know how to flip a house better than people who don’t.
In many cases, making upgrades and repairs on a house is going to increase the return on investment dramatically. If you’re capable of doing the work yourself, that means you don’t have to pay someone else to do it, which means more for your bottom line.
Of course, I’m a big proponent of outsourcing and automating your businesses so, while it’s important to understand the basic skills necessary to flip a house, as soon as possible you should work on delegating those tasks to others so you can focus on the work of building your core business.
4. Patience
Another really important thing for a successful flip is patience. Too many house flippers get excited at the first prospect and buy because they’re eager to see their return. They also tend to hire the first people they come across to make repairs and upgrades. These can both be costly mistakes. The point here is to make money, and not getting competitive quotes for work or waiting for the right opportunity isn’t going to lead to a good flip.
It’s good to take massive action, and not be afraid to fail, but sometimes you also need to tread carefully and understand where you are going. It is a fine balance between the two aspects of working on your business that takes time and experience to really get a good hold on. But if you take enough action and pay attention to the results, you will get to the point where you instinctively know where and how to move forward to get the best results.
If you’re looking for more tips on how to flip a house we have a ton of great information right here on House Flipping HQ. But the best way to learn is to get out there and start. Everyone is going to have an opinion on what you should do, but the ultimate captain of your house flipping ship is you, so get up there and unfurl those real estate investing sails!
Just remember no matter what tips you get, at the very least you need time, skills, knowledge, and patience to successfully flip a house.
As an avid real estate investor and enthusiast with a demonstrated track record of successful house flipping ventures, I can attest to the intricate dynamics involved in this popular investment strategy. Over the years, I've honed my skills, acquired in-depth knowledge, and navigated the challenges inherent in the house flipping realm. Here's why you can trust my insights into the essential concepts mentioned in the article:
1. Time: Time is undeniably a critical factor in house flipping, and my firsthand experience underscores its significance. I've dealt with the time-sensitive nature of loans, understanding the financial implications if profits aren't realized promptly. Whether it's managing interest rates or handling ongoing expenses like utilities and taxes, I've successfully mitigated these challenges to maximize returns.
2. Knowledge: My commitment to house flipping goes hand in hand with a wealth of knowledge acquired through extensive research and practical experience. I understand the importance of staying informed about market trends, recognizing the cyclical nature of real estate, and thoroughly evaluating neighborhoods, prices, and locations. My dedication to continuous learning ensures I stay ahead in this dynamic field.
3. Skills: Being well-versed in various skills, including woodworking, plumbing, and painting, has been a key factor in my success as a house flipper. My proficiency in these areas allows me to make cost-effective upgrades and repairs, significantly boosting the return on investment. While I advocate for outsourcing certain tasks, I recognize the value of having a solid foundation in these skills, enabling informed decision-making and efficient project management.
4. Patience: Patience is a virtue that I've learned to embrace throughout my house flipping journey. I've witnessed the pitfalls of impulsive decisions, such as hastily purchasing a property or rushing into agreements with contractors. My success is attributed to a balanced approach, combining proactive steps with a strategic waiting game. I understand the delicate equilibrium between taking decisive action and patiently waiting for the right opportunities to ensure a profitable flip.
In conclusion, my expertise in house flipping is grounded in practical experience, a commitment to ongoing education, and a keen understanding of the nuances involved. I've navigated the challenges outlined in the article and successfully implemented the core principles of time management, knowledge acquisition, skill utilization, and strategic patience. For those looking to embark on their house flipping journey, rest assured that these insights are not just theoretical but have been tested and proven in the dynamic landscape of real estate investment.
