One of the most common ways of getting into real estate investing is to flip houses. This involves buying a property when prices are low, renovating the property, and selling the property for a profit when the market turns around. While this sounds simple, it’s a complex process that will require your direct involvement in every aspect of the project. This overview will provide you with the information you need to have more success as a house flipper.
Start With Something Small
While the big dream is to flip homes in wealthier neighborhoods where you can earn larger profits, you shouldn’t expect to be able to jump right into that market. Instead, it’s better to start small and choose homes in more modest neighborhoods. For example, buying a $50,000 may not seem glamorous, but it can easily be renovated and flipped to give you a modest profit of up to $20,000. This gives you a little extra to invest in your next purchase. Before long, you will be flipping houses in those wealthier neighborhoods, but your risks won’t be as high.
Location Still Matters
Even though the internet, drones, and ride-sharing apps are some of the things that make rural living easier, people still want to live close to the action. They also want to live in safe neighborhoods. These are some of the factors to consider in choosing your first investment project. If you buy a home that’s not in a desirable neighborhood, you’ll have a hard time selling it no matter how much work you put into updating the home. It’s important to choose properties in areas that are up and coming to ensure buyers will want to live there.
Get the Right Tools
Sometimes, getting the right tools for the right job simply means hiring the right contractors. However, if there are aspects of the renovation you feel you can do yourself, you should make sure you have the right tools and supplies. As you get started, you can rent some of the equipment you’ll need. However, if you feel this is going to be a long-term career path, you should buy equipment that you’ll need to use on each renovation. This includes safety equipment, such as a sturdy scaffold tower, as well as investing in power tools that will help you get better and more efficient results.
Network With Real Estate Agents
There are several reasons you should start networking with real estate agents even before you start investing in your first property. While you may want to rely on their expertise in selling your renovated property when it’s completed, there are other ways they can help you. For instance, an experienced agent will know what types of renovations will increase the property’s value. You don’t want to waste time or money on a renovation that will do nothing to increase the home’s market value, so this is an important insight to obtain. Agents can also help you with the legal aspects of buying and selling homes. The insight and services they can provide can be invaluable throughout your first investment project.
Take a Real Estate Course
Before you get started, you should take at least one college-level course in real estate. A comprehensive course or a series of seminars can help you learn about various aspects of real estate investing. You can learn more about flipping houses, gain a better understanding of how to read the market, or you might discover other types of real estate investing that also interest you. The information you learn in just one course can be applied to everything you do as you start flipping houses. In that way, the course will pay for itself many times over by helping you take better risks. If you continue to educate yourself through webinars, online videos, and blogs, you can also learn about the different strategies that other house flippers use to increase their profit margins.
As you get started in flipping houses, you should expect to make mistakes. Just as is the case in any undertaking, practice and experience will help you develop a more successful strategy. Over time, you’ll learn how to spot better investment potential and you’ll gain a better understanding of the market. As long as you’re open to learning from your mistakes, there’s no reason you can’t find success in flipping houses.
