“Flipping” homes has become one of the most prevalent real estate trends over the past decade. From television shows to “how-to” seminars, it seems like everyone is on the flip bandwagon.
“Home flippers” provide a valuable service of renovating homes that may otherwise stay off-market, dilapidated, and even vacant or abandoned. If you’ve ever watched HGTV, it may look like an easy, get-rich-quick, and even glamorous lifestyle. Having renovated numerous properties myself, and helping clients sell their own “flips”, I can tell you from experience that it’s not easy, quick, or glamorous.
Is there money in it? Sure, but there’s also a lot of risk. I’ve heard stories from firsthand sources of people buying houses as-is with “wood” foundations, no sewer line, and fire damage to the trusses supporting the roof. The list goes on and on.
Bottom line: there are a lot of ways to lose money in the business too, and it is often extremely demanding and stressful. However, a flip completed on-time and on-budget (this only happens on HGTV) can be very rewarding both mentally and monetarily. If you’ve caught the flipping bug, here are my top tips for coming out ahead:
- Do your homework, twice. In other words, if you’re buying a property sight unseen be sure to build a large contingency fund into your budget projections, and yes, you need to project sales price, profit, and costs with any potential flip. If you’re lucky enough to be able to do an inspection, do one! Even if it’s for informational purposes only.
- Hire or get to know a contractor. If you plan to do a lot of flips, you’re going to need to develop a relationship with a reliable and skilled contractor. Even if you’re capable of doing the work yourself, you can’t possibly manage more than one at a time.
- Hire a real estate agent. Real estate agents are skilled at marketing and negotiating. A great agent will get you top dollar for your renovated property and will help with your analysis when buying your potential flip.
There’s a lot more to flipping houses than what I’ve covered here, so feel free to contact me with questions. I’d also love to hear your success stories!