How to Get Started Flipping Houses—The Real Guide to Becoming a Real Estate Investor
So, you want to become a real estate investor? Perhaps you have seen others make a career out of real estate investing, you’ve been inspired by your favorite TV show, or you’ve just been looking for a new way to make more money. No matter what your inspiration may be, there is no denying that there is some major potential for profit in the real estate investing world.
However, while there is no denying that real estate has made more people millionaires than virtually any other industry—this isn’t exactly an easy career path to take. There are so many challenges that can get in the way of real estate investors and so many important milestones you will need to reach during your journey.
But if you really want to start flipping houses for money and really want to start being a successful real estate investor—here are a few tips to help you get started.
- Know what you are getting into. There are different types of real estate investors. If you want to be the type of real estate investor that flips houses, your focus is going to be on buying distressed properties and bringing them up to market standards—then selling that property for a profit. Not all real estate investors do this. Some buy and hold properties and some do wholesaling. You shouldn’t be doing all of these at once. Pick what type of real estate investor you want to be (i.e. a fix and flip) and stick with that one path.
- Make sure you have the money. Every good real estate investor will make sure that they have the money, time and skills in order to actually turn a profit off of their investment. If you are buying properties with the intention of flipping them, you need to have enough money in place. You will need short-term cash to acquire the property, and then plenty of cash for reservations (make sure you have more than you think you need—reservations always tend to go over budget). You also need to think about how long you will be paying the mortgage on that property before you can sell it. Most renovators hold on to a property for about 6 months to allow for renovations—but it can be more depending on the home.
- Think about timing. Whether you are in charge of managing a crew, or if you are a DIYer who is doing most of the work themselves—flipping is a big time commitment. This type of real estate investing take more actual time than other type, so make sure you have the time to commit to the project. Don’t forget, if you want to keep cash flowing in so that you can continue to fix and flip properties, you need to remember that flipping is a “rinse and repeat” business model—where you are going to be doing the same thing time and time again.
- Make sure you have the skills. Even if you don’t do the actual work, there are a few skills you need to have in order to start flipping houses. You need to have a solid market to work with and you need to know who your end buyer is going to be. You also need the right team with the right skills to execute all of the marketing, legal and construction access of your renovation process.
Flipping is a great sector of real estate investing and one that can really help you make a great deal of money. But there is also a lot of risk involved. Keep these tips in mind before you start your venture so you can be completely prepared for this new undertaking.