With more people watching TV it’s inevitable that you wouldn’t come across a show about house flipping. That may even get you thinking about taking on flip project of your own. While I am all for getting started I am also about knowing the reality of how things go during the process. The end result is worth it but knowing what may happen will keep you on track.
Flipping is going to take you longer to get started than you think
There are several factors that influence the timing of a flip purchase including inventory and how prepared you are to move forward with a purchase. That is why there is a definite advantage to starting the process sooner than you think. It is not uncommon for there to be a decent amount of time between the time you decide to flip a house and you actually sign the purchase agreement.
You are going to look at a lot of houses before you submit an offer
There is a formula that says you will look at 100 houses and write offers on 10 and maybe get 1. That makes sense if you think about the timeline it usually takes for someone to find their first flip. The majority of houses aren’t great for flipping which is another reason why you’ll spend some time before you hit the winning combination.
It is all about the numbers
Flipping houses offers many benefits. There are people who like the idea of making something old new again. Adding value to a neighborhood or creating a home for a family to enjoy. The idea behind flipping houses is combining all of these along with the profitabilitiy aspect for the flipper. That is why spending the time to analyze numbers even on houses you research online is so valuable. You can save yourself time by knowing rough numbers on houses in various markets so you know by pricing which ones are most likely to line up profit wise.
Timing is key when flipping
In order for flips to be the most profitable they need to be completed quickly. That means you need to put together and track the progress so you know when it should be completed. There is a big difference in the amount of buyers out in the market between spring and summer.
Track all the expenses
For you to truly know if your project is profitable you need to account for all the expenses. You can easily track them in a spreadsheet so you always know where you are in terms of your budget.
Think like the buyer who will walk through
If you were to buy this house what would you be looking for? What are the amenities you would expect? Would you think that there should be a master suite? A mudroom? A finished basement? These types of expectations should align with your sale price and with the other updated homes in the neighborhood.
Things will happen unexpectedly
The unexpected will happen but much of how you work through it depends upon how you frame it. Years ago I started to think of it in terms of every house has a lesson that you can learn from it. That is where the unexpected becomes a way to plan for the next time. Only now, you have a solution and experience working through it.
Not everyone will be on board
Friends, family, co-workers. Many people will not be as supportive as you would like. That’s okay. It’s not their vision, it’s yours. How you decide to pursue the things you value is your individual journey. No other approval necessary.
House flipping is not for everyone
There are plenty of people I have met over the years who flipped a house (or a few) only to find out that they didn’t really enjoy it. The great thing is that they still ended up in some area of real estate investing where their flipping knowledge was a great resource. When you think about all the areas you can work in: rentals, Airbnb, commercial, real estate sales or construction you will see that any experience is of value.
Want to buy a property and renovate it?
I have a freebie checklist that will help you — 8 Things I look for When Purchasing a Home. Just click here to download it.
Love before and afters?
Follow us on IG @thresholdhomesmn and FB @thresholdhomesmn to see the projects we’re working on. And for more ideas on renovating & restoring fixer-uppers!
Looking to buy a house to renovate? Check out the fixer upper checklist to help you find the perfect house.
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