A multitude of home renovation shows in recent years may make it appear as though flipping houses is a lucrative project that anyone can be successful in. The reality is that, like any independent business, flipping houses has many different and challenging aspects to it. An oversight in just one area can cause a setback that can be difficult to overcome. Here are a few important factors that you should consider before you throw your hat into the ring.
- Marketing matters
To maximize your bottom line, you need to find deals that come at a deep discount. Because rehab and flip deals on houses are not the same as regular deals for those looking for homes to live in, you can’t look for them in the same places. Good places to be on the lookout are short sales, foreclosure, divorce attorneys, probate, as well as any other strategy you can think of. Good deals usually will not just fall in your lap, which means that it’s not as important what you do as long as you do something.
- Balance your portfolio
The goal of every flipper and every deal is to net as much as possible. But before you embark on a flipping project, it’s important to know what you’re going to be doing with your profits. Are they meant to supplement your full-time income? Do you intend to build a real estate business and look to make further property purchases? If you do buy more property, are they meant to be rentals or more flips? Not having a financial plan can lead to trouble in the long run.
- Always look for the next deal
As the saying goes, you shouldn’t put all your eggs in one basket. In real estate, this means that you should try to always have a deal going. Even if you’re currently struggling with one property, eventually, you are going to finish up the work on it. And if you don’t have a new job lined up, you’ll be back at square one. So try to always have an eye out for the next project. Take some time out every week to reach out to new deals.
- Team building
Sure, you might be able to handle all the tasks that come with flipping houses on your own, but having a team to support you can not only lighten the load, but also add to your success. Some key players you should consider adding to your team are a real estate agent, a good attorney, a good contractor, and a reliable property manager. Putting together a team you can depend on can pay off in the long run for everyone involved.
- Time commitment
Flipping houses is very time-consuming. This doesn’t necessarily mean that you’ll need to quit your full-time job to pursue it, but you need to be prepared to take on a heavy workload. There are countless things to do to get a house ready to sell, and dozens of steps required to even get those tasks completed. On top of all that, once the property is ready to be put on the market, it probably will not sell as quickly as you anticipate it will. Be prepared to balance this major project with whatever else you have going on in your life before you embark on it.