You’ve probably seen those shows on HGTV about people flipping houses for profit. They buy a run-down house, renovate it, and then sell it for a profit. It sounds like a great business idea, but can you really make money flipping homes? Is it something you can do? And what does it take to be able to flip houses for profit?If you’re willing to put in the time and effort, and have some cash upfront, you can make money flipping houses. It’s not as easy as they make it look on TV, though. You need to be prepared to sweat, get your hands dirty and invest both time and money. Here are some tips on how to flip houses with no money that will help you succeed where others have failed.
Know your market
The first step to flipping houses is knowing your market. Every city and state has different laws, regulations and price points for real estate. If you want to make money flipping houses, you’ll need to know how much each neighborhood is worth, what the average home price is for your area and any other market data that could affect your decision. You can use tools like Zillow or the National Association of Realtors to get this information. It’ll help you figure out where to look for deals so you can buy low and sell high.
Plan, plan and then plan some more
Every great business is built on a solid plan. If you want to flip houses for profit, you need a detailed business plan that outlines exactly how you’re going to do it. It should include an overview of the market with price points, a list of real estate agents you’re going to use, a detailed budget for everything from renovation costs to marketing, a timeline, a marketing plan and a list of all the permits you’ll need. You can get help creating a business plan with our free business plan software. Your plan should be detailed and exhaustive. This way, if you ever have to go to a bank for financing, or investors, they’ll know exactly what you’re doing, how you plan to do it, and how much money you’ll need. If you’re planning to flip houses as a part-time gig, you can keep it simple. But if you want to make flipping houses a full-time gig, you’ll want to create a detailed business plan.
Look for the best deals
Finding great deals is the key to flipping houses for profit. You’re not going to make money if you buy houses for market value or above market value. You want to find the best deals you can. Look in neighborhoods that have seen some decline, and don’t have a lot of new construction. Look for houses that are priced well below market value. If you’re new to flipping houses, you might want to start with houses that have major structural issues. They’re easier to find, and you don’t have to worry about finding the right contractor. Once you get a feel for the process and have some experience under your belt, you can start flipping more desirable properties.
Be prepared to eat the costs
There are a lot of things that can, and probably will go wrong when you’re flipping houses. You’ll need to be prepared to eat the costs for things like permit fees, contractors who don’t finish the job, extra expenses like replacing the roof or appliances that are past their useful life, and all sorts of other things. That’s why it’s important to have your financing in place first. You don’t want to get into a contract and find out you can’t finish the job because you don’t have the cash to see it through. And you definitely don’t want to have to borrow money from family or friends to finish the job.
Get financing in place before you buy
You should have your financing in place before you buy the house. That doesn’t mean you have to have the entire amount before you sign on the dotted line. The bank will lend you some of it, and you’ll get the rest from your contractor. You just need to have a commitment from the contractor to finish the job and get the financing in place before you buy the house. This is especially important if you’re flipping houses as a part-time gig. If you buy a house, get the contractor to commit and then can’t come up with the financing, you’re going to end up losing the house. The same thing applies if you’re flipping houses as a full-time gig. You need to have the financing in place first so you can finish the job and get a nice profit.
Hiring is a must
You’ll make mistakes when you flip houses for the first few times. You probably won’t hire the best contractors, and you may not be as selective as you should be. But you’ll learn from your mistakes, and each flip will be a little more profitable. As you gain experience and get better at flipping houses, you’ll need to hire a project manager, a contractor and an attorney. But before you do that, you’ll need to learn how to do things yourself. If you don’t know how to do something, you’ll need to learn how to do it. That could mean learning how to frame a wall, or do electrical work. It’s a lot easier to learn how to do these things yourself than it is to find the right contractor.
Bottom line
Flipping houses can be a profitable venture, but it takes time, money and the know-how to get started. You need to know your market and find the best deals in areas that have seen a decline. You also need to be prepared to eat the costs that come with flipping houses, and get financing in place before you buy. Once you have the right skills and experience, you can make a decent profit by flipping houses.