MAKE MONEY BEING AN HOUSE FLIPPER
Ever come across the word Flip before? Do you really know what it means? Do you care to know that the word flip carries a powerful practical thought in it that can turn anybody who cares to know an overnight millionaire.
You really do care to know I guess. Then, don’t stop reading this little article till the end.
Flipping business is one of the most advantageous and massive income generating business that I have come to know just of recent. Anyone that can delve into it without minding the little efforts it takes will of a surety get a second income idea and probably if done very well become an overnight offline and online millionaire.
Don’t’ forget the name of this blog is Wealth On Net (WON) with the sole aim of exploring the secrete arts and acts of making money online. Flipping is just another online money making ideas (MMI) we came up with.
What is flipping?
Flipping is the act of buying, renovating and selling properties, mostly houses.
A flipper is a person who tries to buy, rehabilitate, and sell real estate for a quick profit. Flipping in real estate is the ability to take possession of a valuable, yet often neglected property (house, landed properties, cars etc.) with the sole aim of renovating or repairing it for sale within a short while.
This beautiful story credited to KIRSTEN KEMP in her book titled “Flipping Confidential; the secrets of renovating properties for profit in any market” is a complete and concise summary of everything you need to know about property flipping business.
Have a good read:
I have some good news for you. There’s an art and a science to flipping houses, and it doesn’t take an engineering degree and a bottomless trust fund to do it. Several years ago, I had a real estate client, Lety, who purchased her first condo in Santa Barbara for $200,000, 110 percent of which was borrowed. Because she had no money whatsoever, she even had to borrow the cash to cover her closing costs. Lety was a single mom who desperately wanted to provide security for her young son. Although she didn’t have a penny to her name, she was employed full-time as a hairdresser and had a loyal, steady clientele. She possessed an inspirational resolve and an innate understanding that the key to financial independence was to invest in real estate even though, technically, she had nothing to invest.
Because Lety’s funds to get into her home didn’t come out of pocket, her mortgage payment was steep. Lety made many sacrifices to keep that condo, but she never complained because she had her eye on the prize: building equity and, hence, financial stability for her future, for her son. While she was living there, Lety made some minor cosmetic changes to her condo replaced linoleum with tile, painted, and changed out some light fixtures and hardware. Two years later, she sold it for $298,000, a healthy profit in any market. She dropped $325,000 on her next condo, made similar improvements (and sacrifices to keep it), and sold it 18 months later for $435,000. With the equity she had acquired, Lety partnered with her sister and bought a house for $950,000, completely overhauled it, and sold it 16 months later for $1,175,000. They split their profits, and Lety purchased a single-family residence in need of her now well-honed special touch. There was a nice yard for her and her son, and she is now enjoying the comforts of well-deserved stability.
Think about this scenario. Here’s a single mom with no money and limited skills. Lety struggled to get into a $200,000 condo, and just five years later, she was dabbling in million-dollar deals. Did she set out to become a “flipper?” Probably not. Was it easy? No. Scary at times? No doubt. Worth the sacrifice? Absolutely.
Lety didn’t have experience or cash, but she did have what it takes to be a successful flipper: a principled conscience, an iron gut, a keen sense of organization, a passion for the process, a healthy dose of reality, and a finely honed sense of humor. That last bit is key. Take it from me, someone who’s lost (and made) more money in 12 years than some people see in a lifetime because there is no better backdrop for raucous laughter than a construction site under a self-imposed time crunch. Of course, how long and how heartily you chuckle (and how quickly you recover) will depend on your mind-set, attitude, and perspective all of which we’ll be sure to get in the right place before you begin your flipping journey. Source: Flipping Confidential; the secrets of renovating properties for profit in any market.
Who can do flipping business and become successful?
As far as my studies is concerned, I don’t believe flipping business is meant solely for some specific set of people. Just anyone with good personality and passion for success can make it in the business. The story of Lety above is an imagery of a woman with just a little cash and little or no experience at all becoming successful overnight. Nevertheless I must say that anyone who will eventually become successful doing this business must possess the following qualities: good personality, strengths, and addiction to the best style.
Furthermore, an ideal flipper should possess some if not all of the following:
• cash/credit: just a little or much. Absence of which can be borrowed seeing that flipping property assures income within a short while.
• Time: Finding, analysing , buying , fixing and selling can actually take some time.
• discipline: most especially in taking the right steps and styles is advantageous.
• knowledge; without which there’s bound to be failure. There are books out there that can help enhance deeply ones knowledge of flipping property business.
• contacts; there’s need to know other people who are into the business and their styles of doing it. There’s need to seek and get contacts of buyers and sellers, marketers etc.
• assistance; and, • organizational skills. You may not want to do it alone, you can take up partnership with anyone probably with the cash, knowledge or technical know how.
Meanwhile, if at all you fall short of one, two or more of the above listed skills, I bet you can still go on to make it in this business. Take upon yourself some time to study more and I tell you the truth, you will always get it done.
HOW DO I GET STARTED IN FLIPPING PROPERTY?
Here is a guide to take into consideration for starting to out the flipping business.
1. Study several books on subject matter to gain ample experience from several authors. You really need to get the technical know how.
2. Evaluate and build up on your strengths weaknesses, assets, and liabilities.
3. Establish reasonable goals that do not rely upon good fortune or luck.
4. Pick one method that you suppose suits you and your desires. If that calls for additional education, including taking classes In do-it-yourself home improvement, then make that Funding happen.
5. Target a particular market area, such as one school district or a distinct submarket in your community. Learn everything you can about property values, rental rates, and demand growth in your target market. If necessary to your strategy, also learn construction and renovation permitting requirements, zoning, and other such issues.
6. Educate your self based on present day home development styles and pricing. The maximum efficient way to do that is to shop for a Weekend skip to the next domestic lawn near you.
Learn about reworking, decorative finishes, landscaping, generation, and financing, multi function vicinity. See the range of charges and prices, and evaluate products for your self. Accumulate brochures, write down fees, and ask for Samples. Communicate with the specialists, and ask various questions about details of set up, specialized tools, time required, and encouraged subcontractors to your vicinity. If you like traveling, it is a superb way to additionally go about getting to know big markets and stores near by big towns.
7. Make a business strategy. There are plenty of books and knowledge based platforms out there that you can purchase for less than 20 bucks to help you do that. Be sure to use conservative estimates regarding the amount of time and money you can devote to your flipping business. All business plans have deadlines. You cannot say, “I will buy six housekeeper flips when I am able and sell them as soon as possible.” You have to say, “I will buy and sell one housekeeper flip every three months.” I have a sample business plan in Appendix B.
8. Pursue your plan. Revisit your plan once a year to make adjustments learned through experience. Resist the urge to change your plan every time you have an “Ah-ha!” experience. Some thoughts need time for reflection to mature.
This post seems long right? Get the e-book freely here in addition to seven websites where you can find and sell your house, plus other things to know. And read it at your convenient time.
What are the risks associated with flipping?
According to Denise L. Evans: The Author of “The House Flipping Answer Book (Explaining 125 questions on flipping property business”: There are two major risks associated with flipping, but both are manageable. They are: (1) too little knowledge; and, (2) too much greed.
You gain knowledge through reading books, talking to mentors, and observing the behavior of successful people. You also need knowledge about yourself, though. Realistically, what are your strengths and weaknesses in terms of personality, time, money, access to credit, sophistication, salesmanship, and energy? What are your goals? Are they achievable with a conservative plan, or must you take huge risks in order to meet your self-imposed deadlines? Are you risk intolerant? If you do not like taking risks, you will never find a television flip that feels comfortable. Do not
waste your time with that strategy. Instead, try another type of flip that suits you better.
Greed is an ugly thing because it does not seem like greed at the time. Instead, it feels like self-confidence that you have the “oomph” to pull off something incredible. My advice for beginning flippers: If you think your potential project will be dramatic and impress all your friends with your immense profits, think two or three more times before jumping at it.
To prevent greed from sneaking up on you, set realistic limits in advance and do not stray from them by more than an inch. In other words, if your requirement is to buy a property at 20% less than market value, do not buy one that is priced at 19% less than market value. You will want to, of course. You will say to yourself, “It’s a great house. I can probably sell it for a little bit above market value and still make my same profit.” It is a little bit like going to an auction. If you say in advance you will not pay over $250 for a leather sofa, you will not get sucked into a bidding war and find yourself paying $1,000 for an $800 piece of furniture.
There are plenty of deals out there. Wait for the right one for you.
Finally, always have a Plan B. Your Plan A is the one where you make a lot of money because all the stars are aligned and things work out perfectly. What if nothing works out well? What if everything goes wrong? Can you still sell the property and at least break even? Can you rent it to a tenant for enough money to cover your mortgage payments, insurance, and taxes, and then sell it later? There are several questions, later, devoted to managing surprises. Be sure to read them several times before starting your own flipping career.
In addition to the aforementioned risks, the following are other risks to take note of:
3. Hiring a Bad Contractor: becoming successful in the business requires you hiring a good and knowledgeable contractor. The kind you can trust and will be comfortable in working with. In addition, try out different contractors so as to get to know and understand the one that offers the best valuations for your business.
4. Thinking selling is actually easy: selling is not easy as many people supposed. A good understanding of the market and sound advertising strategies will do the magic. Take a look at this review of five different Online websites where you can list your property for sale.
5. Stress and Uncertainty: From sourcing, to buying, to fixing and the hurdles of selling is not actually easy. It can be time consuming and stressful. Moreover, financial stress and emotional stress (in terms of impatience etc.) are factors that goes a long way to affect flipping business. And,
6. Wrong Valuation/evaluation/Estimation.
WHAT ARE THE ADVANTAGES OF FLIPPING BUSINESS.
1. Flipping is a potentially lucrative business: mostly for full time flippers or a side income for part time flippers. It is very easy to earn in 6 figures or more with Flipping properties. In short, you have financial freedom.
2. With Flipping, you are your own boss. You make personal decisions on what and what not to do. You make decisions about the time and resources you want to commit to the business.
3. No need of any equipment or inventory. All you need is your knowledge and your cash. You can easily employ the services of brokers and various experts around you.
4. You tend to create employment opportunities and also bring about improvements to the neighborhood.
5.You need no license or degree before you can get into this business. All you need i say again is your technical know how.
HOW MUCH CAN YOU MAKE
There is no limit to how much you can make in flipping property business. You only need to play your game smartly and acquired the required technical know how. The amount of resources your willing to commit into the business can actually state to what extent your earning capacity will be. Of course, you can’t compare people that are investing in millions to those investing in thousands.
Nevertheless, Denise L. Evans have this to say: There is no limit to how much an experienced house flipper can make. I suggests for newbie’s’ that you limit yourselves to something you can buy for 10%–20% less than your break-even price. If you think you can sell a house for $160,000, after fixing it up and holding it for six months, then you have to work backward to find your maximum purchase price.
HOW DO YOU GET FLIP-ABLE PROPERTIES
Real estate publications: Almost all areas periodically publish books or magazines specifically designed for residential real estate sales. Some of these are local, while others are regional. The magazines can often be found in racks or newsstands located outside real estate offices, convenience stores, and grocery stores. These real estate publications can be a very good source for locating potential deals. You will also find many helpful real estate related advertisers in these publications real estate agents, mortgage companies, appraisers, surveyors, title companies, real estate legal services, and insurance companies.:
Real estate brokers and agents: Having many brokers and agents doing the job of seeking out the best property to buy can be of great help.
Classified advertising: Advertise your expertise on social media, distributing business cards, informing friends and relations about your interest Almost all newspapers, large or small, carry a section in their classified advertising specifically for selling real estate. Many of these ads are placed by real estate agents and are designed to prompt you to call their office. Most homes listed for sale in the newspaper by agents are active listings and will typically be priced at full retail. You might notice some ads, however, that use keywords like “motivated seller” or “must sell, owner transferring.” These types of classified advertisements are worth following up on.
Marketing: You do this by placing classified ads on Newspapers, various magazines and article publications, online market places, social medias, and through direct mail campaign.
For sale by owners (FSBOs): owners or FSBOs frequently refer to people who prefer to sell their own houses as for sale. This group of homeowners represents an important segment of the potential properties available to you, so be sure to give them the attention they deserve. They can be located by looking through the classified section of your local newspaper or by driving through neighborhoods and looking for FSBO signs
Vacant properties: you can always come across various properties to which you can take advantage of. Vacant houses are more of a liability than an asset for their owners, so they are oftentimes available at bargain prices. For any number of reasons, the seller has moved out and is no longer around to care for the house.
TAKE A LOOK AT THE REVIEW OF 7 THE BEST PROPERTY FLIPPING WEBSITES WHERE YOU CAN EASILY AND QUICKLY PUT UP YOUR PROPERTY FOR A FLIP.
SO, HOW DO YOU FLIP A PROPERTY
Find, Analyse, Buy, Fix, and Sell
The very first step you must take in flipping process is in finding ( where and how you can find it has been written above) the best property with an investment potential: This you do by considering many factors such as: Location (the kind of neighborhood, an increasing neighborhood or a deserted one, Fix-ability, is it a house that is worth spending on for renovations/repairing, is the owner willing to sell the house for the right ad prevailing market value.
The next stage after finding the right investment plausible property is to make analysis based on cost of acquiring, fixing and selling. In our opinion, the Analyze stage is the most important part of the investment process. This is where careful investors make their money and risk takers often lose theirs. This part of the book is devoted to teaching you how to make smart offers, specifically, how to perform the analysis and count the costs to determine your maximum offer: the absolute most you can pay for a property and still realize a solid profit. Knowing your maximum offer gives you the ability to stay objective during the buying process. You will be able to present your offer with confidence, keep your emotions in check, and walk away from an unprofitable or risky deal without regrets.
There are three steps to our process for buying an investment house, and each one requires preparation so that you can respond quickly. The first step is figuring out how you’re going to pay for the flip. Whether you’re borrowing from a private money lender or taking on an equity partner, you should always prearrange your financing so that you can confidently and quickly make an offer when a good deal comes along. These you do by:
1. Paying in Full/completely
2. Attract Financial Investors
3. Borrow the Cash for a Flip
4. Partner to Get the Cash for a Flip
The next step is the offer process. Presenting an offer on an investment house involves more than just filling out a contract. Successful investors take the time to understand the specifics of the situation. They then write an offer that respects the needs of the seller in order to craft a deal that’s both fair and profitable.
Take your time to do all the necessary renovations, repairing, furnishing that are needed for your house. Replace the replaceable most especially with modern days equipments. While fixing make you cut your coat according to your cloth. You don’t fix beyond your capacity or analyzed budgeting.
Think of your potential profit you desired to see at the end of the flipping process. The execution of your improvement plan will determine how much actual profit you end up with at the end of the flip. Every misstep costs you money, but moving too slowly increases your holding costs and reduces your profit. A successful fix requires balancing speedy execution with the demands of staying on budget and ensuring quality. Hence, try and get a group of experts involved in the fixing process.
Once the renovations and fixing is done, you can now put up your house up in the market for sale. Selling your house can be done through newspaper adverts, magazine ads, posting on social media, owner put for sale, online forums, and various websites.
TAKE NOTE: while selling your property for a profit, do not overhype or overprice your house: expert experience shows that overpricing delays and slow down purchasing.
You should also considers, giving your house to an expert (real estate agent) to sell or you did it by yourself, set a considerable price and base the pricing on the level design.
Sources/Recommended books for further studies:
KIRSTEN KEMP: “Flipping Confidential; the secrets of renovating properties for profit in any market”