So,
you want to get into the flipping houses
game and make money or possibly you had a
bad experience with flipping a property and
want to learn how to flip a property and
actually make money? First of all, let me
say that I don’t believe in expecting a
large return on a flip if all you do is sign
your name on a closing statement and expect
to turn it around quickly. It’s just not
that easy.
What
can happen though is that if you follow some
of my techniques you can expect to earn a
nice profit for yourself. There are five
keys to success that I would like to discuss
in this article. They are:
-
Buy
the property right.
- Be
willing to shop for good deals.
-
Don't be afraid to get your hands dirty.
- Be reasonably handy.
-
Do most of the work yourself.
-
Get a flexible
mortgage (make sure
there is no prepayment penalty)
How to
buy the property right. Here’s where you
need to either be a real estate agent or
work with one. Knowing the market area is
essential to getting the right house at the
right price. Are prices in this area
increasing? Are others improving their
homes? Is the home’s sale price consistent
with the repairs needed? Does the listing
allow for an easy out of the contract should
you learn something during the home
inspection stage? It is my opinion that you
definitely need a home inspection because
you want to know everything that is wrong
with this house before you start.
more
You
should be willing to shop for good deals.
First thing I always do is set a budget.
It’s not iron clad, but it is a starting
point. You know what you bought the home for
and you know roughly how much you want to
get out of it, so now work backwards. What
needs to be done and how much money can you
allocate to it? Be methodical, make a list
and try to stick to it. Shop hard for sales,
closeouts, and alternatives. Many of the
home improvement stores put closeouts out
front early in the morning. Swing by on your
way to work. Check garage sales, newspaper
ads, and even the internet. While you
certainly should buy quality materials, you
need to resist the urge to buy the nicer
faucet or the prettier cabinet pulls. Always
buy with price and quality in mind with a
close eye on the budget. Over-spending is a
common pitfall.
You
must not be afraid to get your hands dirty.
If a home needs to be remodeled, chances are
it is pretty dirty too. Hiring a cleaning
person is expensive and not necessary.
Anyone can scrub. It’s good exercise too.
The yard most likely is a mess since the
previous owners probably neglected it. Some
of the hardest work is done in the yard.
Having the right tools is key, but you don’t
have to buy them, most of them can be
rented.
You must
be reasonably handy and you need to do most
of the work yourself pretty much go hand in
hand. You should consider finding another
hobby if you cannot do average repairs
yourself or if you don’t enjoy it. If you
get stuck and have to bring the
professionals in for a botched job, your
profits will quickly go down the drain.
Labor is very expensive to pay someone for
and should be used sparingly. 
Mortgage Glossary9
