Believe it or not, people have money...and they will lend it to you - even when you are just starting how to flip houses.
In this behind the scenes video at one of our first House Flipping School Bootcamps, I reveal how I do it so you can too.
The 70% Rule...it seems like everyone gets confused by this one when flipping houses...
Whether its people I meet at local meetups, Boot Camp attendees or people at local REIA meetings, they get confused all the time.
This "slightly older" video of yours truly, explains it:
Ever wonder what to actually say to a would be investor when you're raising money for your flips?
At our most recent HFS Bootcamp, Mike gives you the exact words and approach to use when talking to new investors about how to raise money for your next flip.
Please note: never ever ever ask for money. Use this approach instead talking about returns but no promises of return.
When we go shopping, we always want to know how much something costs. So I’m not surprised when the biggest question that I receive is “what would be my house flipping financing costs?”
It’s impossible to put an exact figure on the cost of flipping a house. House flipping comes with so many variables so it’s hard to tell how much it would cost. It can cost you anything from hundreds of dollars to thousands of dollars depending on your market, rehab costs and plenty more factors.
First, you need to know how much the property will be worth when you are done rehabbing. Once you know the value, all other costs that come with the rehab will start to make sense. This is what is known as the ARV or the After Repair Value.
The best way to get an estimate of the ARV is to compare prices of similar properties in the same area of your target market in the past three months. Get a local realtor to help you determine the ARV faster or alternatively, you can do the research yourself by visiting websites such as Realtor.com.
Keep in mind the following things when determining ARV:
The amount of money you will spend on rehab will depend on Continue reading
If there is a question that I get more often is “How do I flip houses without money?”
TV shows make it look like it’s very easy to flip houses without money but in reality it is not. While it is not easy, you can learn how to do it. I do it all the time. In fact, I hardly ever invest any of my money in most of my house flipping deals.
It is definitely much easier to flip houses when you have your own money especially if you are a beginner. But there are many ways that you can find funding sources to give you money for flipping houses.
How to flip houses with no money or credit? Learn here how to do it.
It may seem like an almost impossible task to flip houses with very little cash. It is much easier to flip houses when you have at least a few bucks in your bank account but this does not mean that you cannot do it without the money.
It is quite simple to flip houses considering all you need is a little wit, willingness to think out of the box and an idea of where to look and start.
So many people want to know how to get a loan to flip a house. It's a question I get all the time.
Although traditional mortgages are not my preferred way to fund my flips as I prefer to flip houses with no money using private money, you can learn how to get a loan to flip a house using traditional banking.
One of the most difficult things for new house flippers to master is how to make an offer on a house. Often times newbie investors will locate a great property with profit-earning potential. However they lose the property to more experienced house flippers, because they did not craft their offer in the most effective and attractive manner.
Structuring your offer for success is becoming increasingly important, because it seems like the best deals are being swept up much quicker today than just a few months ago. The market out there is highly competitive, with many investors bidding on the same properties.
A few months ago I wrote a blog post about how to make money flipping houses entitled Do you Need to be Smarter than a 5th Grader to Flip Houses?, and I think it turned at least a couple of heads. Its true folks, you do not need a graduate degree in mathematics to make money flipping houses. All it takes to flip a house successfully is some simple multiplication, subtraction and addition.
However it’s the numbers you use that will make or break your house flip deal. The math itself may be extremely simple. Discovering the correct numbers to use, on the other hand, requires research and help from certain experts.
By far the most important number to absolutely nail down to make money flipping houses is the ARV. The ARV is the after repair value of a house flip. Said another way, the ARV is what you expect to be able to sell the house for after renovation. Every single other projection you make will be based off the ARV. It is critical to get the ARV correct, or every single other projection will be off – and your profit margin could suffer as a result.
If you get the ARV substantially incorrect, you will be fighting an uphill battle for the rest of the house flip. To consistently make money flipping houses, you want to avoid this at all costs, and here’s how.
When I teach people how to flip property, I stress the importance of trusting your numbers. If you do your 5th grade math and the numbers don't work, by all means do not get aggressive with your eraser. Eraser math can get a new or seasoned house flipper into serious financial trouble.
Calculating your after repair value, maximum allowed offer and rehab costs are essential to house flipping success. I myself still closely abide to the 70% rule for my house flips, and I don't see that changing anytime soon.
But how about those times when there is a deal on the table that feels right, however the numbers just aren't adding up. For example, lets say your projected rehab costs are so high, that the projected rehab costs alone are preventing you from getting into a deal. Is it possible to get creative, and somehow manage to flip this property for a profit?
Remember that there is no eraser math allowed!
My answer to this question is absolutely yes - it is possible to get into this deal. The only catch is that you have to be smart, and understand where and how to get creative. This is when having a well established house flipping team can really pay dividends.