What to Know Before Flipping Homes

Flipping homes is no easy feat. Before getting started, you should know, at the very least, three main things: your budget, your time frame, and all about the location that you’re buying in.

Your budget

Being realistic about what you can afford when flipping homes is key when getting started. That should narrow down your options to what falls within your budget. It’s not only the cost of the house itself and the flip, it’s all the other expenses that come along with it.

The expenses that you put into the house aren’t your only things to consider. Real estate agents, insurance, and lawyers are also among the many things that cost money in this endeavor, so make sure to factor them into your budget.

Try to get an idea of what the contractor or handyman that you choose to work with, will charge. If you don’t discuss with him beforehand, you may get slammed with a pretty big bill depending on the job. Sometimes there needs to be more work done than meets the eye, so having a guy to work with that you trust can be helpful. He will probably want to keep you in good graces, especially if you’ll be hiring him for other house flipping work in the future.

Having a few skills in your back pocket can also help you stick to your budget. Think about what you can do with just your everyday toolkit. Installing door knobs, easy light fixtures, and new faucets yourself can save you a few hundred dollars.

You timing

Know your time frame. Make sure that you have enough time to get all your work done before your deadline. The idea is to not lose money on the flip, which can happen if you have to hold onto inventory for an extended period of time.

If you price too high and the demand isn’t there, you may end up hanging on to inventory longer than you expected, costing you money in the process.

Location

Be an expert in the area that you are looking into. If you are looking into an area that has lots of families, you’ll know that houses with three or more bedrooms, for example, are likely being sought out. Don’t only focus on what the houses are selling for in the area but also the higher end of what people have been willing to pay for remodeled homes. You’ll get a realistic idea of what you can list your property for.

Also know the surroundings and what may help entice buyers. Knowing whether or not there are “A” schools nearby, houses of worship, or parks can increase the appeal of the home even more.

Becoming an expert in house flipping takes time. It will likely entail a lot of trial and error, patience, and practice.