How to Flip Houses with No Money
How to Flip a House with No Money
One question that I get a lot is “how can I get into the house flipping business with no money?”
I really enjoy talking to these kinds of people because they are usually highly motivated and action oriented. They have made the decision to change their lives – they typically want to one day achieve financial freedom. I really respect that and I always do whatever I can in my power to help them get started and being learning how to flip a house.
Unfortunately many of these folks do not come from money and have little dough in the bank. Actually, I would go out on a limb and say that most successful house flippers began their career with little or no money in their wallet. Fortunately it is very possible to begin a house flipping career with no cash at all.
Now, if you have money then starting a career in house flipping will be much easier. There’s no doubt about it, if you have hundreds of thousands of your own dollars to invest you are absolutely a step ahead of the gang.
If you are not one of these people with hundreds of thousands of dollars, then don’t let your financial situation deter you from launching your house flipping career, or any career for that matter. As long as you possess the motivation and passion, then you will find ways of starting without shelling out your own money.
Flipping Houses for Profit | Managing the Rehab
When first flipping houses for profit, you'll find that controlling your rehab costs is just as, if not more important than what you pay for the property you are planning on flipping.
As we have discussed before, there are pros and cons of using a general contractor versus hiring subcontractors. However in to know how to start flipping houses for profit, its essential to control the rehabilitation spend as much as you possibly can whichever way you choose to go. In these examples below, we will assume you are managing the rehab yourself without the assistance of a general contractor.
Here are a few ways to get into flipping houses for profit by controlling your spend on the rehab, while at the same time locking in maximum profitable gains in the process.
Flipping Houses For Profit On a Budget
Using a master budget spreadsheet is a good way to keep track of the repairs needed and all the moving parts with relation to the rehabilitation. You can use the spreadsheet as a snapshot of where you are at any time in the house flip process.
In the beginning of your rehab, you should first get multiple estimates from multiple sub-contractors like electricians, plumbers, painters to get a feel and a quote for how much each part of the rehab will cost. As a rule of thumb, get Continue reading
Flipping Properties Using the Lease Option
Typically we use lease options as an exit strategy when flipping properties. If we are not able to quickly sell a house for the price that we want, then we can always fall back on the lease option.
Maybe we have found a person that wants to own the home. Unfortunately their credit is not at the level necessary to purchase the newly renovated house flip. They may have gone through a recent bankruptcy or gone through some other sort of financial trouble.
A way that we can get this type of person into one of our homes is through the lease option. The person will place a down payment of say $10,000 or $20,000 on the home. This is what is known as their “option.” That money secures their interest in the property.
Now if they never decide to buy the house, then the down payment is mine to keep. This serves as my protection and ensures that they will take care of the house. Obviously it is very important to communicate this to the person when discussing the lease option. You always want to remain 100% transparent and make sure that they understand how the lease option deal works.
How to Find Houses to Flip | Short Sales
How to find a houses to flip?
Big question...many answers. We touch on one of the best ways to find houses to flip today....
We've touched on many aspects of house flipping including the house flipping mindset, how to get started flipping houses, how to use partners in flipping houses , how to flip houses with no money as well as how to find houses to flip with real estate agents...just to name a few.
Now its time to talk about another way how to find houses to flip using a different kind of agent, the kind who deals in "short sales"...namely, the short sale specialist.
How to Find Houses to Flip: Short Sale Specialists
Short sale specialists are typically (but not always) real estate agents who have become experts in negotiating short sales.
What's a "short sale" you say?
The definition of a short sale is:
"a property sold by a seller by a real estate agent for less money than what the seller owes the bank who holds the mortgage"
When a seller does this, it could save the seller from Continue reading
How to Locate Lucrative Opportunities
House Flipping Opportunities
In the house flipping industry there often are opportunities all around us, virtually knocking at our front doors. Problem is that sometimes we are so wrapped up in what we are doing, that we end up not noticing prime opportunities ripe for the picking.
Other times we are presented with an opportunity that just is not right for us at the present moment. It’s easy to write off these opportunities and forget about them, which believe me I am guilty of from time to time.
However I have recently realized just how important keeping an open mind is when it comes to new opportunities. I noticed that if I have an open mind, then I am more likely to spot opportunities and potential projects.
An open mind also helps me to find ways of tackling opportunities that initially did not seem feasible for me. Let me explain.
About a year ago I was presented with a fairly significant project on the island of Nantucket. To make a long story short the project did not end up working out. However I was able to create a solid contact and new relationship with a real estate agent who specialized in island real estate.
This particular agent then shared with me another project that she was working on. It was a 10 acre, beautiful plot of land in a wonderful section of the island. Again the opportunity sounded tempting, but it really was not the right move for me at that moment. Nevertheless I expressed some interest and made sure to show appreciation for the opportunity, her time and her energy.
How to Find Houses to Flip Using Real Estate Agents
OK, so how do you actually find houses to flip?
We’ve touched on many of the critical element to house flipping success in previous posts, but if you don’t ever find a house that can be flipped for a profit, your house flipping career will never take off.
So here are a few way how you can find good houses to flip using one of the best sources for real estate deals: real estate agents.
How to Find Houses to Flip With Real Estate Agents
Real estate agents are one of the best means by which to locate houses to flip, without a doubt. they know your market, have their finger on the pulse of what's going on and are usually very knowledgable.
On the flip side, if you're not careful, you can get into some trouble here as well, so Continue reading
How to Flip Houses With No Money Using “OPM”
Learning how to flip houses with no money is one of the biggest sticking points most people experience when trying to learn how to flip houses.
They just don’t know whether to get the money first or get the deals first.
So which one do you do first?
There is really no right or wrong answer to this. The bottom line is that in order to learn how to flip houses with no money, you need to be working both sides of the house flipping equation all the time.
If you get a house flip deal first but have no money then you need to be confident that you'll find the money by using "the Secret" to house flipping success.
Of course, if you get the money first and have no deals then you need to find a deal real quick.
Although it may be hard to visualize...the bottom line is this: money is everywhere - you just need to go get it!
How to Flip Houses With No Money...The Magic of OPM
Flipping houses with no money involves using other people's money - called "OPM" - to finance your deals. OPM can be found Continue reading
Sub-contractors and Home Inspections
Flipping Houses and Building Relationships with Sub-contractors
Developing and maintaining good relationships is essential to flipping houses successfully. My house flipping team of contractors, lawyers, real estate agents and various other people really are 100% essential to the success of my business.
Contractors in particular are an incredibly important piece to the puzzle. Having good working relationships with general contractors and sub-contractors is certainly an aspect of flipping houses that can’t be overlooked.
I’ve read a lot of Napolean Hill and Dale Carnegie books throughout my business career, and I highly recommend that you check them out. How to Win Friends and Influence People, written by Dale Carnegie is all about how to create and maintain good relationships. The skills Hill teaches in his book are the same skills I use on a daily basis when interacting with my sub-contractors.
We are currently putting the finishing touches on a local house renovation, and I’m happy to say that things are going great. However we did recently encounter a little bump in the road with an electrical inspection. To put it simply, the inspector came by the property, walked around the house on his own, and found numerous areas in the home that he was not happy with.
Subsequently the house failed the inspection.
How Much Does It Cost to Flip a House?
When beginning house flipping, one of the biggest questions people have is how much does it cost to flip a house?
As there are so many factors that go into flipping houses, the answer to this varies widely. Depending on rehabilitation cost, the cost can vary from hundreds of dollars to hundreds of thousands of dollars!
However, if you are flipping houses and determine that you may spend several hundred thousand dollars, you will want to be extremely clear on what the selling price should be. So in order to best answer the question of how much it costs to flip a house, its best to begin with the end in mind and examine the back end instead of the front end.
And we do this through the use of ARV.
How Much Does It Cost to Flip a House: ARV
In order to figure out how much it will cost to flip a house, you need to know what you can fetch for the property itself when its ready for resale. When you know this, the other costs associated with the house flip will start to come into focus better.
One of the best ways to figure out ARV is by comparing similar properties that have sold in the same area in your target market recently. This is known as comps.
A local realtor can help you determine this very quickly, which is one of the reasons why Continue reading
Seaside Onset Property
Flipping Houses in Onset, Massachusetts
It may be a bit messy but this property just wreaks of opportunity!
We just purchased this three bedroom single family home in Onset, MA and have thus far not done any work whatsoever to the home. If you are just getting into flipping houses then this post is a must read - you'll get to see exactly what condition most of the houses we rehab are in when we purchase them.
First thing I noticed about this home was the smell. The previous owners were big time cigarette smokers and it was apparent that they had no qualms about smoking indoors. On top of that, the smell was compounded by a reasonable amount of trash, rotting food and even fecal matter left over from pets.
However, that smell is really just the smell of opportunity! If you plan on house flipping for a living then it is inevitable that you will run into homes like this one. To be honest, this home is just the tip of the iceberg. Many houses that we flip are much more run down, smell even worse and are chock full of garbage.
It's these rundown homes that present the most opportunity for making a lot of money. Check out the video below to get a better sense of what I am eluding to.