House Flipper Guide: 6 Essential Tips to Get You Started
There was a time when being a house flipper was easy and lucrative, with low competition and plentiful inventory. However, this is not the case these days with lending to house flippers hitting a 13 year high.
But there is still hope. You can still achieve success as a house flipper. You just need to know the tricks that the pros know.
Follow this house flipper guide to tip the odds in your favor.
1. Pay for Professional Inspections
If you don't have experience in the construction business, then there are property defects that you'll miss. This could be a fault in the foundation or electrical wiring that is outdated.
The cost of the professional inspection now is well worth the savings from not having to fix these issues later on.
2. Abide by the Code
Even if you can do all of the work yourself, take the time to follow the local code and permitting requirements. Banks and lenders hesitate to make a loan on a remodeled property that doesn't have local code approval.
Not getting the proper permits opens you up to complications, fines, and even lawsuits later on.
3. Know Your Neighborhoods
You can't just buy a home anywhere, fix it up, and expect to sell it for a profit. You need to think about the intended buyer when selecting your homes.
For example, if you want to sell to young families, you need to look for safe neighborhoods that are close to well-ranked schools.
4. Have a Real Estate Agent on Your Team
If you're an experienced real estate agent, then you can be this person. However, if you don't have this experience, then it's best to find someone who can handle the listing and sale for you.
An agent is going to earn their commission by helping you get more for your flipped homes. They know how and where to list your home for a quick sale. They also have the negotiating experience to get you a higher sale price.
5. Don't Plan for Overflowing Profits
While the average first-year profit for house flipping is $58,520, this isn't the case for everyone. About 12% of people either break even or operate at a loss.
If you flip homes carefully, you too can make a profit. But keep in mind that you won't make stellar profits on every home. There'll be a few duds in the mix.
6. Don't Over Improve
Keep in mind that this isn't your pet project, future home, or showpiece. This is a home you're fixing up to sell fast. The more you spend on improving the home, the higher the sale price will have to be to recoup your investment.
Successful house flippers like We Buy Houses advise to sticking to the essentials. Make necessary repairs and focus on the features that will give you the greatest return on your investment.
Follow This House Flipper Guide
By following this house flipper guide, you can set yourself up for success. This will help ensure you make the right choices now to save yourself time, frustration, and money later on.
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