How do you get started flipping houses in 2023? Many people won’t move forward (even though they really want to) because of the market or feeling unprepared.
If you’re interested in starting flipping, you can, and you shouldn’t let the whispers about the market or predictions get in the way. Like I always say, you learn by doing.
I’m going to break down 11 simple steps to getting started in flipping in 2023. Whether you have experience in the real estate industry or not, if you want it, you can do it.
1 – Access Your Financial Situation
You may have the idea that you need a hefty savings account to start. This isn’t the case. Even with my own journey in house flipping. When I got started, I used funding from various sources.
Before you get started finding funding sources, you’ll want to check your credit score and assess your financial situation. Based on your financial history, lenders will run credit checks and determine if they’ll lend to you.
Side note: There are funding sources for those with low credit scores, but you’ll want to know your position before jumping in.
2 – Determine your funding source
Next, it’s time to determine how you will fund your flip. Your source(s) will depend on your qualifications, financial standing, project needs, and business goals.
Fix and flip loans are short-term financing you can use to fund your projects. Lenders consider the above and will determine the amount depending on the home’s after-repair value.
These funding sources include hard money loans, home equity loans or home equity lines of credit, 401(k) loans, personal loans, seller financing, and business line of credit.
Choose the loan that works for you! These funding options are discussed in more detail in this blog post.
3 – Research Your Local Real Estate Market
Research is critical to a successful house hunt and flip process. It might not be fun, but you must get extremely familiar with the area you’re looking into.
If you’re interested in a property, be sure to do further research into the comparable recent sales in the area. Your ending profit will be determined first by the price you purchase a property at.
While research is key, you can learn more by making connections in the industry, which can help you find homes that meet your wish list.
4 – Set a Budget
Your flipping budget depends on the area you’re looking into and the renovations you can get into. One way to calculate a budget is with the 70% rule.
The 70% rule isn’t a strict rule to abide by, by any means. I share why the 70% rule is helpful and not in this blog post. The bottom line is, if you use the 70% rule or not, above all you need to know your numbers. Before writing an offer, know your numbers and stick to the budget you can afford, with some cushion for unexpected expenses.
PRO TIP: I also recommend revisiting your budget throughout your project to ensure you’re on track!
5 – Hire a Real Estate Agent
A quality realtor can be an invaluable second set of eyes, ears, and analysis. While they can have a house-flipping experience, it’s not necessary. Instead, focus on their track record, their communication skills, and if they grasp your requirements.
To find a reliable realtor, start with your network! Ask those you trust or look up to in the business for referrals. Be sure to share your exact needs to get the best recommendations you can.
Select a few options, and dedicate some time to speaking with them individually. Trust me, it’s worth the time! Regardless if you got a referral to a real estate agent, ask for referrals and about their history.
6 – Get Funding for Flipping
It’s time to get funding for flipping. While it’s typically expensive to flip houses, there are tons of options for funding. The most significant expense in house flipping is the property acquisition cost (what the property costs to buy).
If you’re having trouble getting a traditional loan, a hard money loan may be an option (as listed above). Remember, house flippers who take on debt to finance their flip will pay interest on that debt. This should be factored into your budget and final sale price goals.
7 – Purchase a Property
You have the knowledge, real estate agent, and funding. Now it’s time to purchase a property to flip!
During the closing process, ask whether you can access the property so you can get a jump on planning. Getting started sooner helps so that you can do walk-throughs with contractors, make accurate proposals and get bids.
The more you can do before closing, the quicker you can hit the ground running. Time is money!
8 – Hire the Right Renovation Team
I touched on this a little already, but finding a renovation team is worth the time and effort. You’ll want a team you’ve vetted, who understands your plans and can meet your budget and deadlines.
It is helpful if you can get things down by yourself, but be careful with how much you DIY. It can be worth it to hire the experts. Buyers have expectations when it comes to renovated homes and often experience shows in the finished product. Again, turn to your network for referrals and make a suitable selection for your business.
9 – Source Your Materials
When it comes to the budget find areas to maximize your expenses. By sourcing some of your materials you can find the best pricing and go back to those vendors for continued savings. Ask about professional discounts (designer, contractor) that you may qualify for. Find wholesale distributors for cabinetry and counter tops.
10 – List and Sell
Next, list and sell your flip. This is where the first few steps can help again. If you’ve researched the area and comparable recent sales and are working with an expert realtor, you’re set up for success.
When you’re going to list, be sure you walk through the property and look for minor tweaks or fixes that may have been missed. Spend some time on the curb appeal, and make sure to invest in quality photos and staging for your listing. There’s only one chance to make that key first impression.
11 – Re-evaluate and Flip Again
Congratulations, you flipped your first house! Please, don’t skip this final step. Before you get ahead of yourself and go find another property.
Take the time to evaluate your experience from beginning to end. Identify what went well and what changes you can make in your next project. Determine if you feel as though the professional relationships are ones that you would like to continue with. This is a great opportunity to consider if you’d like to work with anyone else on the next projet.
Done? Go find a flip!
Get Started Now
Your first step is not to let fear get in the way. Try not to get discouraged by what people say about the market or your worries about finding a lender. The only way you’ll find out and get your project going is to start!
Have a plan, and be open to learning throughout the process.
Looking for ways to level up your flip design? I’ve got you covered
I have a great course for you to get multiple offers in any market! Learn the high-end flip design tips I use in my projects! Check out the High-End Flip Design Course here.
Just getting started? I have the perfect place to start! Check out my Find my Flip course. Walk through 3 properties with me as I search for the next flip project.
I also have some resources I’ve put together to help you get the information you need to move forward on creating your flipping life.
Make sure you have the Fixer Upper Checklist so you know which areas are key to added value in a home. There are several videos on finding houses, renovations, and funding on YouTube. Check out your favorite flipping topics and new videos weekly!