In order to learn how to get started flipping houses for a generous pay day, you need to keep some basic flipping houses 101 lessons in mind. As is the same with any business, the key to success is knowing and perfecting the basics, which is what we review today.
Flipping Houses 101 Rule #1: Research
If there's one thing that is critical to your success in flipping houses, itâ€™s doing exhaustive research on the geographic areas prior to implementing your house flipping plan. If you buy a property in a run-down area with little historical price appreciation, then your target buyer is going to most likely offer below market price.
Market research is the most important aspect of flipping houses 101.
This can leave you with an extremely tight budget, especially if it's a "fixer-upper" property, where you have to do a fair bit of rehab in order to make the property attractive to potential buyers.
However if you buy a property in either a stable or upper middle class neighborhood or due to your research, an up and coming neighborhood, then you'd be looking at a much more profitable sale. It's up to you which way you want to go, but the house flipping school formula we advocate here on this blog is to not buy in blighted areas.
And the way to do this is to always do thorough research before entering into any real estate market.
Basic advice, yes â€“ but this flipping houses 101 lesson is absolutely crucial to your success.
Flipping Houses 101 Rule #2: Network
The fastest way to get your foot in the door flipping houses is to get to know other real estate investors in your own area. When you are first starting, itâ€™s important to know what you know, but even more important to know people who know!
So start networking and marketing yourself. Dive right in and donâ€™t worry about not having any experience. In fact, the less experience you have, oftentimes the better. When you are a novice, pretending to be anything but is just not good business.
Flipping Houses 101 Tip: Join Your Local REIA
And thereâ€™s no better place to start networking than by attending and then joining the local REIA (Real Estate Investors Association). No matter where you liv, thereâ€™s one in your area. Click this link to find where your local group meets and sign up and go.
At these meetings, you will meet other investors at all different stages of real estate investing. Some will just be beginning and others have done hundreds of deals. There are rehabbers, wholesalers, realtors, contractors, attorneys, mortgage brokers, hard money lenders, short sale experts and many others. These are exactly the kind of people you should be meeting to launch your house flipping career.
REIAs usually have monthly speakers as well. Many are local experts and others are national speakers and educators. It is a great place where like-minded investors can share ideas, contacts, and invaluable information with each other.
Make up some business cards and join your local REIA.
Flipping Houses 101 Rule #3: Find Investors
Without someone to lend you money for the purchase of the flipped house, youâ€™ll have a difficult time getting your house flipping career started.
Ideally, investors with disposable, investable income will be your target audience. If you will be self-financed, then this is obviously preferable, but not necessary. In most cases when people start house flipping, they need either investors or banks to help finance their house flipping venture.
Something you will want to be doing is start building your investment leads. There's a number of ways you can do that but the fastest is to grab your local newspaper and look in the classifieds columns.
REIA Meetings Are Your Best Source
The companies you're looking for will be advertising, "We buy any house". That's where you can do a quick flip. Although the payout will more than likely be lower if you don't have strong negotiation skills. If you have then you might actually enjoy this style of badgering for the highest price.
Another great place to find investors is through the previously mentioned REIA meetings. Many real estate money lenders attend these meetings so make sure you make as many contacts as you can at each meeting.
Another less attractive choice is to find lenders through friends and family. This kind of money lending is tricky as whenever family is involved in money lending, things can get complicated fast.
Thatâ€™s why we recommend going outside family for funding and making good contacts instead. As soon as you turn your first successful house flipping deal, youâ€™ll find investors will suddenly appear because nobody wants to miss out on a good deal.