So how exactly do you get started flipping houses? While there’s much more to learn, let’s reduce the process to seven simple steps.
1. Educate yourself.
Know what the heck you’re getting into. House flipping is awesome, but it can be risky. Ask a lot of questions, and look for answers from experienced investors who have been where you are. Who knows—maybe you’ll meet your next partner.
2. Figure out your funding.
Maybe you need a partner. Maybe you need private money. Or maybe you need a combo of various financing strategies. Whatever the case, look into how you plan to finance the deal before you look for the deals themselves.
3. Find leads.
Landing good deals isn’t always easy, especially in a competitive market. Sure, finding a good real estate agent is a solid first step. But incredible deals are hard to come across on the MLS these days. Luckily, there are alternative strategies: For instance, you could get creative and send out direct mail letters or find run-down houses by driving around.
4. Analyze your deal.
Will this deal actually make you money? You’ll want to make sure you analyze your prospect closely and back into whether you can get the ROI you want out of it. Start with: What profit do you want to make? This will help inform your maximum allowable offer (MAO) or the maximum amount you can afford to pay for the deal and still get paid the profit you want.
5. Make an offer and keep your MAO in mind.
Make an offer that makes sense for your numbers—and most of the time, get ready to be shot down. Once in a while, though, the numbers work for both parties, and you’ll have yourself a flip.
6. Close on the property.
Depending on where you are, the closing process might involve different steps. For instance, in some states, you might need an attorney. Understand what the steps look like in your specific market and come to the closing prepared.
7. Manage the flip.
Don’t underestimate the tight hold you need to have on your contractors to get the job done as quickly and efficiently as possible. And remember, you don’t want to overspend on things that don’t allow a lot of of value. You might love that quartz countertop, but will it add significantly to your selling price? What’s the market you’re aiming to sell to?
Also Check Out: Ways to Use Facebook for Your Real Estate Investing Business