Posted by: Kaplan Real Estate Education
Published: July 9, 2019
For many people, becoming a house flipper requires a lot of research, hard work, and patience. Switching careers or taking up a side business can be daunting, especially when that new career is entirely dependant on your skills and savviness. However, the monetary and personal rewards for house flippers make it all worth it.
Nothing feels better than having your hard work not only result in a profit for you, but also provide a safe and aesthetically-appealing home for your buyers. If you plan it right, you could be making extra income in no time. This article will walk you through the exact steps to take in order to begin your career in house flipping.
Steps to Become a House Flipper
1. Set your goals and create a business plan.
Deciding on your goals, whether in terms of revenue or in the number of houses flipped, will help you track your progress and stay accountable during this process. Your goal might be to flip six houses a year, or it might be to make at least $250,000 in your first year. The first option might work better for you if your main concern is increasing the number of houses you flip within a certain amount of time. If your ultimate goal is to make money quickly, you might choose to focus on revenue instead. Either way, you’ll make more progress if you have specific goals in mind.
Write down your long-term and short-term goals and post them somewhere you can refer back to them often. They will serve as your motivation and give you cause to celebrate once you reach them. Once you have an understanding of your goals, you can put together a business plan. This plan will guide you through your house flipping journey and ensure that you are making the best possible decisions to help you reach your goals.
2. Establish relationships with contractors, home inspectors, accountants, and attorneys.
Sticking to a timeline is very important for house flippers. The faster you can fix time-consuming issues on your property, the better. Having a trusted contractor, home inspector, accountant, or attorney on speed dial can save you time and headaches. Before you begin the purchasing process, build relationships with all the experts that you anticipate needing once the sale closes. Let them know your plans and ask them for advice. Their advice might even shape the kind of properties you hunt for and help you weed out potential disasters.
3. Decide on a budget and timeline.
Before researching and looking at potential properties, make sure you’ve carefully thought through your budget and timeline for the project. You should have a budget not only for the purchase but also for the renovations and staging. Your team of experts can help you really gauge how much you should be setting aside for each process.
It might be difficult to establish a timeline for your flip, especially if this is your first one. Creating a spreadsheet of projects with start and finish times can help you stay on track. Once the sale goes through, you’ll want to hit the ground running. The smoother your renovation process goes, the faster you can sell.
4. Scout out the best locations for your budget.
Location matters when it comes to house flipping. Take some time to get to know all the different neighborhoods in your city. What neighborhoods attract families and which ones attract retirees or young professionals? Understanding the neighborhoods in your community will give you an idea of who your potential customer will be. If you purchase a property in a quiet suburb with a reputation for excellent public schools, your potential buyers will most likely be a young family. Understanding who your buyer is will enable you to make more informed renovation and design choices.
Once you become familiar with your local neighborhoods, research which ones are up-and-coming or in high-demand. Purchasing a property in a high-demand neighborhood will ensure that you make a sale quickly and at asking price.
5. Find a real estate agent or become one yourself.
You can choose to either sell the property yourself, work with a real estate agent, or become an agent. The last option is the most popular among seasoned house flippers because it allows you to have control over the entire house flipping process from start to finish. Becoming a real estate agent also gives you a lot of essential real estate knowledge that can come in handy when selecting future properties to flip. Best of all, you won’t have to pay a buyer’s agent commission when purchasing or a seller’s agent commission when selling.
Even if you choose not to sit for the exam and earn your license, sitting for your state’s real estate prelicensing education can be a valuable asset. Many house flippers find the fundamental education real estate professionals receive to be incredibly helpful in the day-to-day operations of their career.
Flipping houses can be a fun and exciting new venture for someone who is open to both risk and reward. Getting your real estate license is recommended for long-term house flippers who want to cut costs and have a well-rounded understanding of everything that goes into selling a property. Learn more about how to get your real estate license by selecting your state from this list.