House flipping is an investment strategy that involves buying a house and quickly reselling it at a profit. Many people believe that they can get rich quick by flipping houses. Unfortunately, most people who actually try it realize that house flipping is a lot harder than it looks. You will need to understand what challenges you will face and what steps you need to take to be successful.
Don’t Fall for Sage Advice
There are a number of “experts” who claim to teach people how to make a killing flipping houses. They make it sound like it is an easy way to get rich. Unfortunately, many of these experts are scam artists who charge a lot for advice that doesn’t really work. They aren’t a leader in Tennessee real estate investing strategies so you will want to be on your guard.
One self-proclaimed expert tried selling his blueprint at a mastermind group he was running in New York last year. The Better Business Bureau reported that members didn’t benefit from his strategies and advised people not to attend.
House Flipping 101
You need to spend some time formulating a strategy before you begin. Here are some general tips to help you get started.
Understand the Commitment
House flipping is going to take a lot of time. You will also need a pretty sizeable investment to get started. You may be paying several thousand dollars in mortgage payments for several months before you can sell the house. Make sure that you understand the personal and financial commitments before you get started. Bigger Pockets and similar sites have tools that can help you calculate the costs of flipping a property beforehand.
Create Your “A Team”
House flipping is a pretty intensive process. You are going to need the support of a number of experts. The professionals that you will need to work with include:
- Real estate attorneys
You will need to work with professionals who are knowledgeable and responsible. Always ask for references and research them carefully before deciding who you want to work with.
Understand the Market You Are Investing in
Don’t even think about buying a house in an area until you understand the market. There are a variety of things that you will need to understand before committing a property:
- What consumers in the community are typically looking for
- Trends in the community that can affect home prices during the period you plan to hold the house
- The fees local contractors and other professionals charge for services you may need
You will usually have an advantage flipping houses in areas that you are living in. You can still invest in properties in other communities, but you will want to make sure that you do your research beforehand. Consider speaking with local stagers, homeowners and prospective. You should also speak with brokers and real estate agents, but keep in mind that they are biased because they want you to invest in their community. Local groups such as the Chamber of Commerce or Homeowners Association are also good resources for real estate investors and homebuyers.