Flipping homes is an investing technique that many investors use to make huge profits! The key to flip homes is to buy right and slash the risk. Buying right consists of knowing your market and making a repair plan. You cut risk by buying with cash instead of borrowing. Risk can also be cut by acting FAST! Buy fast and sell fast, don’t wait around and risk the marketing turning against you.
When flipping homes, you need to consider some factors like:
First, you should figure out how much money you have to invest without borrowing. Before buying, get to know your market and create an investment plan. You should develop a formula based on what types of home you want to flip and what you look for in a home. Now I’m going to go into detail about some of the tips I recommend.
- Understand Your Risks.
a.Educate yourself on the risks that you could face. Learn everything you can about flipping homes, with an emphasis on single family homes. I say single-family homes because these are the properties that most investors pick to flip. Obviously, as you take on more debt, your risk compounds. Therefore, you should only buy flip homes for cash. No mortgages or equity lines! If you don’t have enough cash, then take on a silent partner that does have cash and split the profits. This silent partner will be a huge advantage in the beginning if you can’t afford to pay cash.
- Understand Where The Profit Is.
a.When you decide to flip a home, you must move quickly. This means you need to buy quickly (these properties don’t last long) AND you need to sell quickly. The longer you wait to sell, the more money you can lose. If you’re waiting for the top dollar, you’re going to be waiting a long time and increase your risk that the market may turn against you. Not only could you lose money, but you’ll also lose valuable time that could be spent flipping houses! The key to flipping homes, is to buy it inexpensively.
b.Think about it, if you flip 3 houses a year and make 30K per flip, you’ll have a sweet $90,000 in your pocket at the end of the year! So don’t get stuck on getting the top dollar for each property that you go to sell.
- Rehabbing Works!
a.In order to make money flipping homes, you must understand what the house really needs and what it’s going to cost. So don’t make unnecessary updates, focus on what the house NEEDS in order to be sold. You want the property to look attractive to buyers, but be smart with your money!
With the right business model, you can be extremely efficient. It’s all a math equation, your numbers have to work in order to make a profit. Every single day there are new opportunities, your job is to become a master at finding them! Now get out there and start making money!
We have a free webinar about flipping homes here. Feel free to check it right now.