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Everyone wants to make more money, but only a select few have the right mindset to get to work. There are lots of routes you can pursue to make enough income to leave your day job.
Today, we’ll chat about what to know before flipping your first house. If you’re ready to roll up your sleeves, read on to learn these important steps to becoming a successful house flipper.
Determine Your Strengths
Texting without looking at the screen doesn’t count. Are you skilled in interior design? Or perhaps construction? If so, you may be a step ahead of the game.
If you don’t feel confident in specific skillsets, you can take online classes, do your research, and talk to experienced house flippers who can help you get started.
Additionally, you may consider partnering with professionals who can assist you in certain areas. For example, you may have knowledge of trending home designs, but you may require help with the HVAC system. This is where your budget will come in.
Figure Out Your Budget
You’ll need to ask yourself how much you can afford to invest in your house flipping business. In most cases, you’ve got to spend money to earn money. Remember to calculate the cost of renovation, repairs, and upgrades, as well as other costs, including:
- Property taxes
- Real estate agent fees
- Closing costs
By determining your budget early on, you’ll have better insight as to how much work you can put into your project. Additionally, remember the 70 percent rule. This means you only pay 70 percent of the ARV (after-repair value) minus the repairs you make on the home. This will help you determine the property value after renovation.
If your future project requires more money than you have available, you may need to know the main difference between hard money vs. traditional bank loans if you’re not well established in the real estate market just yet.
Work With a Real Estate Agent
The next step you want to take is to work with a real estate agent, as they can help you get to know the neighborhood you’re looking to invest in. Real estate agents know the market and can offer you data you’ll need to know as a house flipper that you may not get anywhere else.
Furthermore, a real estate agent may provide you information on which properties are foreclosed, which ones need the most work, or even which ones may be the easiest to flip as a beginner.
Once you’ve found the right home to invest in, it’s time to make an offer; but only make an offer that you’re comfortable with. If you think the property is a great deal, chances are good that other real estate investors are thinking the same thing.
Start Flipping
Before flipping the property, be sure to analyze it and figure out what needs to be done in order to see a return on your investment. Working with professionals can help you offset additional costs and ensure the home is safe and ready to sell to homebuyers.
Understanding what to know before flipping your first house is critical when starting out as a house flipper. Most importantly, the more your business grows, the more money you make!