To learn How To Buy And Flip Houses, you must first know the essential tools of the business.
House flipping, and real estate in general, can often be a complicated task. There are a great number of variables that can change after you purchase a house, and from property to property. Moreover, flipping can be an incredibly quick process, and one mistake can send all of your profit down the toilet.
If you want to know how to buy and flip houses, it is important that you have some vital resources in your back pocket that you can always fall back on. You’ll never know when you might need some extra help.
Knowing the right people and having the right instruments can often make the entire process run smoother and bail you out if you are in trouble.
If you want to get a great deal on a house, try Buying Probate Properties.
As a house flipper, when you are searching for good properties to purchase, you want to get the best deal for your money. Sometimes, there are ways you can buy these houses well below market value through unconventional means.
For example, if a homeowner is facing foreclosure, you might be able to buy the house through a short sale. If the home has already been foreclosed, you can purchase it in a foreclosure auction. Or, if it doesn’t receive any bids, you can buy it as an REO property. Additionally, you might be able to find a deal if the previous homeowners are going through a divorce.
In all of these cases, the person or organization in possession of the property, whether it is the homeowner or bank, is eager to get it off their hands as quickly as possible before they lose any more money.
However, there is one way you can find and buy a property well below market value that most real estate investors don’t know about: buying probate properties.
Find out the difference between flipping houses and the “buy and hold” in this Real Estate Investing Guide.
In the world of real estate there are several different ways to make money from buying properties. As a newcomer in the business, deciding which path is right for you might be your first and foremost concern. You might ask yourself…
The answer to this question is quite subjective, actually. There is no route in the real estate business that won’t make you money if done correctly. As long as you are a hard worker and have the right motivation, you should be able to succeed.
Before you choose, you should know the differences between the different avenues of real estate. In this real estate investing guide article, we will discuss two of the most common strategies: flipping houses, and the “buy and hold”.
To learn How To Find A House To Flip, you must first recognize what features make a property valuable.
One of the most important steps in flipping a house is finding the right property. Some people even say that once you’ve signed the paperwork and officially purchased a house, you’ve sealed your fate in relation to the profit you will make.
While there are certainly some variables when it comes to rehabbing and selling, for the expert house flipper, these steps are more or less constants. Seasoned flippers are familiar with their contractors and know how much repairs cost. They also know how much they will be able sell a house for. For these people, the buying process is the game, set and match.
So when searching for a house, it is wise to know what you should look for. Moreover, if you want to learn how to find a house to flip, you should educate yourself on what makes a property valuable.
That being said, just because a property has some, or all, of the attributes in the following list does not mean you should necessarily buy it. It all depends on the value compared to the price.
Buying real estate is similar to fantasy football. While Greg Jennings is a great wide receiver, you wouldn’t choose him for the first overall pick in your draft. With real estate, a house might be in a great neighborhood with some great features, but you don’t want to over pay for it. Conversely, if the home has negative value, you should only consider buying if you can negotiate down considerably.
Below are five of the most important features that make a home valuable:
As a house flipper, your job is to take something unattractive and make it attractive. A home that is aesthetically unpleasing and rough around the edges makes a great fixer-upper. However, a house with a major structural problem is something you should try to avoid.
Damages to the foundation cost significantly more to fix than some peeling paint or an un-mowed lawn. You want to rehab the house to make it more presentable, not rebuild it from the ground up. A rough looking house with a strong foundation is always more valuable than a nice neat house with a structural problem.
Possibly the most important feature to consider when determining the value of a property is the neighborhood. The neighborhood sets a minimum or a maximum for the value of a home.
If you buy a home in an impoverished neighborhood, there is only so much money you can make. When rehabbing a property in one of these areas, you will reach a point where spending more money will not increase the value. You could install marble countertops and cathedral ceilings and even a bowling alley to the basement, but you would still only be able to sell the house for so much.
If you do decide to buy a home in an impoverished neighborhood, don’t go crazy with your budget.
Sometimes, your best option might be to buy a rundown home in a good neighborhood. This way, you can improve the value of the house to meet the standard of those around it.
While the word “setting” sounds similar to “neighborhood”, the words carry two different meanings. A neighborhood refers to the other houses close in proximity and their respective values. The setting, on the other hand, refers to the features near the property.
For example, a desirable setting would be something like a beachfront or lake front property. Maybe the home is in a country club or near a park. All of these features would add value to the property.
On the other hand, if the house were near a heavily trafficked area like a railroad, a highway or an airport, the house would be worth considerably less. Other examples of things that could devalue a house would include power plants, factories, or newly developed commercial areas.
A large percent of people buying a new home are families with at least one child. Because of this fact, education is one of the main concerns of this demographic. It should be one of your main concerns too, because it helps determine the value of a property.
If you find two comparable houses for the same price in different towns, the smart choice would be the house that is in a district with the better school system.
You might not always have a choice, however. Sometimes you just have to take whatever you can get as far as real estate deals go. Still, you should realize that property prices change from town to town for this very reason.
Finally, the most fluctuating variable in house flipping is the market. If you are one of the only investors selling a particular type of property at a set time, your property will be worth a great deal.
However, if you have to compete with many other investors selling houses just like yours in the same neighborhoods, you will have to lower your asking price to even be considered.
An important resource that every house flipper should know how to utilize is the lease option.
When you flip a house, after you buy and rehab a property, you should always try to sell it to a buyer. However, life does not always play out ideally. Sometimes you might not be able to sell a property as quickly or at the price you had originally hoped.
If something like this happens, this does not mean that you should simply cut your losses and sell at a price that won’t earn you any money. Instead, you should find someone who is willing to agree to a lease option.
As I walked in, I was greeted at the door by the host, got my name badge and looked around. I had nobody to talk to.
Everyone else seemed to know everyone else but I knew nobody.
How long would I stand there by myself before someone came over to say hello?
Standing in the middle of the room for what seemed an eternity, nobody did come to me.
So I took a big gulp and strolled up to the bar where there were a couple of other guys sitting chatting. Although I had done this many times before, I couldn’t think of single thing to say.
Thankfully, one of them turned to me and stuck his hand out and introduced himself. He was a local carpenter and he was chatting with a local painter.
What great flooring contacts! I thought to myself...
Nope. I introduced myself for the very first time as a full time real estate investor - and although my first interaction was a bit forced and needless to say, very uncomfortable, I had done it.
That night, I did the same thing on numerous other occasions (maybe the two Bud Lights helped a bit) - but I actually met other local people and handed out my card.
I was horrible at it that night, but I kept going.
Believe it or not, I signed up for more networking groups like BNI and REIA where I did the same thing - sometimes sitting in my car, sweating bullets before I went in - but over time, the fear was less and less and less. And not only that, but the contacts I made were starting to add up.
By the end of my first month of networking, I had met over 30 people, from bankers to contractors to real estate agents to hard money lenders. A few of which eventually became a part of my house flipping team.
I wasn’t good at it first, but I did do it. And I got better at it, each time I did it.
How do you do it so you don’t have to go through the hell I went through?
In this series of videos, we show you exactly how you can sidestep many of those very same fears I had and get really good at the one thing that helped me launch my real estate investing career more than anything (even coaching and education).
Its how to do good real estate networking:
To really blossom in the house flipping game, you need to know the different avenues that are at your disposal.
Flipping houses is an incredibly popular field in the real estate community. With the right ambition and knowledge, the average person can be very successful in the house flipping game. However, if you fail to educate yourself on the different approaches to this business, you might not really thrive.
But isn’t house flipping a pretty cut-and-dry business with essentially one approach?
The answer is no. House flipping is a living ecosystem of many different people and pieces, all moving together to make a sale happen. What you need to do is diversify your mindset and find your particular place, or places, in this field.
What many beginners do not realize is that there are many different ways make money in this exciting business. Some strategies don’t involve renovating or even buying at all! Below are some of the different approaches to the house flipping game.
Buying REO Properties can be a great outlet for house flippers.
In the business of house flipping, often times expert investors will seek out and purchase many different types of properties. While buying homes straight from the previous homeowner can be great, if that is your only means of finding a property, you might be limiting yourself.
To really thrive in this business, you want to consider diversifying the types of properties you buy. Some popular means of buying short sales, and buying foreclosed properties. However, what many people often overlook is something called an REO property.
To Learn How To Flip Properties, you must first learn the Do’s and Don’ts of the business.
In the last half decade, a great number of people have started to join the dynamic field of house flipping. House flipping has the potential be an incredibly profitable industry for new investors with a lot of ambition.
However, many new investors jump into a house flipping project without realizing the full gravity of the situation. They often make rookie mistakes that they’ll regret later. As a beginner, you should try to avoid these mistakes by researching and learning as much as you can about how to flip properties.
If you want to learn how to flip properties, it would be smart to see what problems other just like you have run into. In the following section, we pair a common mistake (don’t) with its alternative solution (do):