How To Flip A House - Some Things To Keep In Mind
Almost everywhere you look, you can find resources available on how to flip a house. Most visibly, a number of TV shows. Then you have numerous websites like this one. Finally, a number of books have come out on the subject. Why do we need so much instruction? You just buy a house, fix it up, and walk away with a fistful of money, right?
Sometimes that's the way it turns out. That's what every house flipper dreams about and strives for. And it does happen frequently. But, except in rare cases (there are exceptions to every rule) it doesn't happen on its own. It's the result of proper planning and execution, and the willingness to have an open mind and change course in midstream if necessary. Basically, every flip will be different, and will require different things to be done in order to reach a happy conclusion.
Having said that, there are a few things that apply to almost every house flip. Here are a couple:
Find an undervalued house in a desirable mid to higher-priced area. Naturally, the reason the house will be usually be undervalued is because it's in poor condition. If there is some other reason, you may need to think twice, because if you can't fix the problem, how can you resell for a profit? While some people have completed successful flips in lower-priced areas, and there are those who specialize in it, it's a tricky endeavor. If you think you might be able to make some money by working in 'changing' neighborhoods, you might want to get some experience first in the more traditional flipping arena, then venture onto less-traveled roads. Don't cut corners. It might be tempting, because any money you can save on invisible areas of the renovation can add to the final profit. But it's something you want to avoid for a number of reasons. First of all, when you sell a house, you're legally required to disclose any defects. If you cover them up and don't say anything, you may be looking at a major lawsuit down the road. Even besides that, if you become known as a 'lick and stick' flipper, you're going to find that lenders, real estate agents, and competent contracters will be disinclined to work with you on future jobs. Finally, and most importantly, you may find it hard to sleep at night. Don't get greedy. Since most people get into flipping primarily for the financial rewards, this may initially appear as strange advice. But in the long run, pricing your flip fairly (or even a little below that) usually has the effect of making you more money, rather than less. The quicker the house sells, the fewer mortgage payments you have to make. Also, pricing the house a little low can sometimes bring in multiple bids, getting you a higher price in the end. And finally, the longer the finished flip stays on the market, the less likely it is to sell. Even if someone who thinks the house and price are perfect comes along, when they see it's been on the market for a hundred and ten days, they may begin to second guess themselves. So there you have a few points that can be applied to the majority of flips. It's not a primer on how to flip a house, for sure, but keeping these tips in mind will surely serve you well on your path to house flipping profits.
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