With more people opting to invest their monies in flipping homes, it is gradually becoming a non-fearful venture, and the world will see more homes flipped over the next few years.
However, it is worth noting that not all house-flippers are successful. Many people end up selling flipped houses for significantly lower than they acquired them.
How can you make a difference?
The fact is, you don’t have to lose when you flip houses. You just have to know how to start flipping houses.
With knowledge of how the process works, your chances of unsuccessfully flipping houses will drastically reduce.
In this article, we’ll show you how to flip houses successfully.
Ways to flip houses
If you decide to start flipping houses, you should also know the two ways by which investors flip houses. Knowledge of these two strategies will help you when you finally start your house flipping business.
You can decide to buy a house that needs repair or refurbishing to be inhabitable. Such houses will be relatively cheaper than regular homes. You can then refurbish the house to make it suitable for inhabitation, and sell it off at a much higher price, or
You can take the other way, which involves studying the market until it’s a time when the prices of houses are on a steady rise. You can buy a house then, and sell it off later when the prices rise.
Genius idea, but highly risky.
What is the best way to flip houses?
Looking at both options listed above, one can get confused. What exactly is the best way to flip a house?
There is no predefined best way to flip a house. It all depends on the investor’s expertise and capital. Buying a house for refurbishing before selling might be less risky than buying to sell directly, but can also be less profiting.
Inexperienced house flippers often overpay for an almost damaged house at an auction, making it difficult for them to break even due to the high cost of repairing the home.
Recommended: Introduction to House Flipping
For a new house flipper with little or no prior experience in selling landed property, refurbishing a house can be better, while more experienced flippers tend to buy and sell complete houses.
Whatever type of house flipping you’ll like to practice, some steps will help you flip houses better and maximize your profit on flipped houses.
Major steps in house flipping
Want to flip a house?
Here are the major steps you should follow to ensure the process is seamless and risk-free.
Raise a capital
House flipping requires an enormous capital, and unless you’re the world’s best house flipper, you should not borrow the capital.
Borrowing to finance a house flipping business is just as bad as borrowing to make any other investment. Investments are never 100% profitable, and if you happen to make a loss in a house flipping deal financed by debt, that’s a double-edged loss.
Also, most debts always have compounding interest and even a deadline. Successful house flippers don’t use deadlines; they wait until the value is high before selling. That’s not a rule when the owners are in for their money.
Study how the market fluctuates
You’re close to paying for that house, but what if you’re buying it at a time of the year when houses are most expensive?
Trust me, that’s already a loss.
Successful house flippers tend to study the price trend of landed profits in their community to ensure they’re getting exclusive deals.
Without a good knowledge of the market, you’ll find it uneasy to analyze, and correctly price a house you intend to flip. When buying a house to flip, you must put all renovation costs into consideration to ensure you’re not overpaying for what looks like a steal.
A workaround for this is finding a great house flipping investor with a lot of experience to partner with. They all have had their bad days and you can only taste the good days, investing with them.
Also, it’s very crucial to learn from the steps of any investor you’re partnering with to gain enough experience when you finally become experienced too!
Set a budget first!
Many starter house flippers tend to shop for a good house without budgeting beforehand.
This is wrong. Flipping houses in the real world is a serious business and not a reality show. Before starting your business, you need a business plan. How do you craft a business plan without incorporating your budget?
Knowing how much will go for the purchase, renovating, and holding fees is crucial before even starting. If this is not taken care of, you might end up spending much more than you envisaged, which can lead to unpleasant losses.
Network with contractors
Networking with contractors is a crucial step in house flipping, as you’ll need to revamp most houses you plan to flip. As this is not a task you can undertake alone, you’ll want to find and network with contractors long before you’ll need them.
This step will help you determine what contractors offer the best pricing, reducing your renovation costs in the long run.
Seek a professional flipper’s guidance
You’re certainly not the first person to flip a house. There are many flipping successes available to draw inspiration from.
Recommended: How To Start House Flipping In Lekki, Nigeria
To ensure you’re making no mistakes, we highly recommend that you seek the advice of an expert that has successfully flipped houses. Not only can you seek valuable advice to help you flip houses more profitably, but you can also get paired up with them, and watch the game being played by an expert.
Conclusion On Best Way to House Flipping
Flipped houses had a gross profit of $63,000 in 2019. 2020 hasn’t seen much of an increase in the pandemic. However, 2021 is projected to be much better!
Would you want to lose your $63,000 next year?
I guess not. Follow all the steps outlined above and start flipping houses profitably in no time.