Many house flippers get into house flipping thinking that it’s solitary process, just you against the world, making money hand over fist.
Even Vanilla Ice is getting into house flipping and he advocates the value of building a solid house flip team as well. Who would have thought?
When people ask me how to get started flipping houses, one of the first things I tell them that flipping houses is a TEAM sport, not a solitary one.
The house flipping team you assemble is one of the most important steps when you get started flipping houses. In fact, second to mindset, it is the most important.
How to Get Started Flipping Houses: 5 Essential Team Members
Although there are usually more than just five team members you need to know how to get started flipping houses, the big five are the base number depending on deal flow and scope of your house flipping career.
1. Real Estate Attorney
Many new house flippers make the fatal mistake of refusing to hire an attorney. They know they need an attorney but decide instead to “go it alone” or hire some second rate Internet based legal service.
The bottom line is when it comes to finding an attorney; you get what you pay for. Don’t skimp here. Hire a qualified expert attorney who knows real estate law. Think of it as a wise investment instead of a cost; like car insurance. You certainly don’t like paying the premium, but when you get into that fender bender, you are sure glad did.
An attorney may appear expensive at first (especially after you get your first bill) – and especially if the attorney charges a retainer to take you on as a client, but in the end it will cost you a lot more if you hire an incompetent attorney or try using one of those other services.
2. CPA (Certified Public Accountant)
Like an attorney, hiring the right CPA can save you a lot of money whereas hiring the wrong CPA can cost you a lot of money. In the process of finding a top notch CPA, it may be frustrating to hear so many different kinds of answers regarding real estate and house flipping accounting issues. This is not uncommon as the U.S real estate tax code can be interpreted in many different ways.
Finding an accountant who is extremely familiar with U.S. tax laws for house flipping and real estate investing is best. But the bottom line is you want a CPA who meshes with works for you and does all he can to legally apply good accounting strategies both to keep your taxes as low as possible and not have to worry about the IRS.
Your CPA should also be involved with your business structure from a tax advantage so consult with you attorney and make sure they talk with each other to do what is best for you.
3. Insurance Agent
How you handle your insurance largely depends on how you set up your business structure. Make sure you hire and insurance agent that understands your business and can give you good advice on how to insure different types of properties.
Different kinds of house flips require different types of insurance, so make sure you ask him or her about homeowners, builder’s risk, liability and of course title insurance. Your house flipping insurance agent should be a one stop shop for you here.
There are a couple of different ways you can handle how to hire contractors to do the renovations on your properties. This can make or break any deal so it is so important you hire the best ones you can. And the best ones you can really trust.
A general contractor is a singular company who runs the entire project; they are responsible for hiring all subcontractors as well. The subcontractors are tradesman like plumbers, electricians and carpenters.
If you can find a general contractor that can work with in your budget you set forth on the project this may be the way to go initially. Having a good contractor will especially help you if you are just learning how to get started flipping houses.
5. Real Estate Agent
When it comes to real estate agents, you can search out an agent with experience who already is familiar with house flipping or you can train an agent yourself. You may end up working with a few in different territories that they specialize in.
Also, there are a number of REO (real estate owned) agents. These are agents that specialize in selling bank foreclosures.
There are also real estate agents that specialize in short sales. These are agents that work with banks to sell a property for the seller before it goes to foreclosure.
No matter which one you choose, this team member is vitally important for your deal flow.
When you are first learning how to get started flipping houses, you may not choose the right team member the first time around, but that’s actually okay. The more experience you get flipping, the more you’ll be able to discern which team members stay for good and which ones you may want to ultimately replace.
When you’re first learning how to get started flipping houses, experience will ultimately help you make the right decisions.