If you’re planning to start a career in flipping properties, you have likely realized that you’ve got a lot of things to learn.
Compared to what you see on television, purchasing and flipping houses are not as simple as it seems.
Fortunately, you can be successful in flipping properties if you take your time learning how to do it properly. Another way to be successful is to hire a property management Miami FL company for help.
So, how can you be good at flipping properties? Here’s the best beginner’s guide to flipping properties.
What are Flipping Properties?
Before you proceed, it’s better to understand what flipping properties are for those who don’t know. Flipping properties is when you purchase an old house and bring it back to life.
It’s buying a property that’s a bit run down, requires a lot of maintenance, or has an awkward layout. Then, you’ll have to transform that property into something a family can live in.
The business of flipping a property is to purchase at a low price and then sell it for a profit. Speed is the key to being successful in this industry.
It’s always better if you can sell the property for profit sooner. So, how can you flip properties? Here are some tips.
Have a Budget
First of all, you have to determine how you will finance your project. Of course, you will want to get pre-approved for a loan if you do not have cash on hand.
You can only do this if you’ve got an excellent credit score. Aside from that, you might also need a form of collateral or a 20% down payment.
Hire a Team
As you’re making offers and searching for deals, you’ve got to start hiring employees to help you. Keep in mind that you have to be extremely efficient if you want to successfully flip properties.
For your project manager, you can ideally have a general contractor. However, that isn’t always the case.
Aside from a contractor, you’ll also be going to hire a drywall expert, plumber, painter, electrician, and other handymen.
As soon as you’re closing the deal, your team should be ready. Time is money when it comes to flipping properties. Thus, you have to act as fast as possible.
Evaluate Your Skill Set
House flipping isn’t just about buying and selling a house. You need to have particular skill sets to become successful.
For example, some of the great skills to have include knowledge of design, real estate, and construction.
It is fine if you do not have these skills on your own. However, this means you’ve got to hire other people who have those skills.
Before you start flipping properties, make sure you have a network of professionals that can help you. This includes contractors, insurance agents, real estate agents, and lenders.
Understand The Neighborhood
Before you start flipping properties, you have to spend a bit of time understanding the real estate market and selecting the right location to invest in.
It’s always a wise move to hire a professional real estate agent who can recommend you throughout this home purchasing process.
After finding a property that you want to buy, it is a wise move to hire a general contractor to evaluate the house.
With this, you can easily come up with an estimate of how much work has to be completed and whether the property still fits within your budget.
Know That Flipping Properties Is a Skill You Can Master
Flipping properties is a skill you can master, just like learning a new language.
For instance, if you want to speak Japanese fluently, you’ve got to begin by learning phrases and words before you can speak complete sentences.
This concept can also be applied to flipping properties. You can gain a lot of knowledge by doing activities that are relevant to flipping properties.
Eventually, you’ll finish your first flip as you work through the steps. Then, you’ll feel totally at ease with the whole process.
Look for an Appropriate Real Estate Market
Even if you purchase a reasonably priced property and stay within the budget, this does not mean you will sell the property for a huge profit.
According to studies, there’s a huge disparity in the profits of house flippers earned in various regions.
According to reports, there are a couple of cities that are best for property flipping due to the ROI (return on investment) that flippers get.
These cities include New Orleans, Denver, Memphis, Atlantic City, and Pittsburgh.
Of course, you might be too far from these ideal areas. However, you still have to do your research about house flipping and home sales profit in your area.
Perhaps you simply have to travel an hour or so out of your location to look for a more profitable place to flip a property in.
Understand the Numbers
Numbers are crucial in all aspects of the real estate industry. However, it is even more important when it comes to flipping properties.
Before you start flipping houses, you’ve got to know all of the numbers included during a deal. Because of this, you might feel overwhelmed when doing your first deal.
You have to understand the repair estimates, expenses, insurance, taxes, closing expenses, and purchase price range.
When you’re going to sell the property, you have to know the holding expenses, days of the market, commission numbers, time to sell, and much more.
Understanding these numbers and what they mean will help you become successful in flipping properties.
You should not proceed with the task until you’re comfortable with every single one of these numbers.
Flipping a property can be a viable business option. This is particularly true if you have the right plan and thoroughly consider the financial details.
Keep in mind that flipping a house isn’t an overnight success. If it’s your first time, you might lose money and make a lot of mistakes.
To make this process easier, hiring a team of professionals is your best bet.
I’m Liran Koren. I’m a real estate pro and co-founder of Luxury Property Care. I believe that through common work we can create a healthy ecosystem, that serves investors, landlords, and even tenants altogether.