I am not going to go on like I am an expert by any means, but I want to share with you what I have found to be helpful when finding a house to flip.
Figure out how you are going to finance this new adventure
Banks don’t like to loan you the money on a flip. Banks are out to make money and holding a mortgage for only 6 months is not going to give them much of a return. If they do decide to grant you a mortgage it will most likely be at a higher interest rate. My suggestion is to find a friend or family member that has a little extra cash and write up a contract with them that they will not only get their money returned once sold, but their money will incur interest. It’s a win win for them! You can always have a lawyer draft a contract if they are worried about protecting their money.
REMEMBER that’s only the money to purchase the house, NOW you need the cash to do the remodel! Are you handy? Sweat equity will be your best resource! Leave the plumbing and electrical to the pros. Home Depot’s kitchen design department has become my best friend – they will help you design a kitchen for free! If you have the dimensions and the general ideas and know how top hang cabinets, you will save thousands of dollars in a kitchen remodel that way!
Have a good team of people around you with Contractors License
Ok I am lucky because I went out on this venture with a good friend of mine and her dad who have been doing remodeling together for the past decade. They really know construction well and have done most of the work. They have their contractors license and know how to pull permits, which is a huge help.
Decide how long you can finance it before you run out of money
I would say a typical flip can range from 3-6 months. Can you hack it that long paying a monthly mortgage payment, contractors, and for supplies? Have a good contractor go through and give you a bid for how much the remodel will cost and then add 25% to that total for anything they find behind the walls or foundation. There usually is always something more that you run into along the way.
Pick a location that has a good return on your money
You always hear about LOCATION, LOCATION, LOCATION – well it’s true! Ideally you pick the ugliest house in the nicest neighborhood to get the most return, unless the house has been left unattended for a longtime. Be smart, how much work do you want to do and how? The more the work, the more the time spent.
Add some custom details – it will pay off!
People know when they walk into a house and if it was a cheap, quick flip job. Use apps like Pinterest and Houzz to look for ideas that may not cost a lot, but really make your house stand out from the others! That will be come your niche.
Get Your Real Estate License
I would suggest someone get their real estate license, you will save thousands in real estate fees if you do! You will also start to understand the ins and outs of a good home and one that you should pass on. It’s such a short and inexpensive career to invest in for the return you will receive. Plus, you can do other transactions not related to your flips!
Make smart choices
We all know that kitchens and bathroom sell, but do they always need to be a complete gut job, NO! Save some of the unique features if they make sense, like the vintage tile flooring in the bathroom if it is in good shape or the kitchens cabinets if they can be painted or refinished. Replace the sink, counter top, and fixtures for an updated look.
Flippers tend to forget about Curb Appeal, which is important and doesn’t have to be costly. Paint the front door, get new address numbers, add planting boxes. Maybe it’s as easy as adding a few plants. You want people to drive by and want to go in to see the inside if the outside looks just as sharp.
Not every flip is the same
Just remember to have fun and know that one flip will have a lot more stuff going on that may end up taking longer vs. a quick remodel would. You will run in to obstacles, but meet it head on! Some days will be emotional, and you will feel like it will never be done but look at the big picture of how you are saving these homes and making them more beautiful for the next owner.
I grew up in a family of entrepreneurs, so this is in my blood and it can be in yours too! GO FOR IT AND HAVE FUN!