Although the so-called gurus might make you believe that real estate investing is an easy money career, it is, in fact, a hazardous business if you use your own cash or credit and requires proper planning avoid losing any money. If you don’t know what you are doing, you’re going to lose your investment. However, like every business, virtual real estate investing has the potential to grow, but many new real estate agents don’t make it, though, usually because they treat it as a hobby instead of as a profession.
Instead of talking about real estate investing in general, in this article, we are going to focus on how to get started in real estate investing by Flipping houses but before we talk about techniques to ensure you get success as a newbie in real estate, let’s find out what exactly Filliping houses means?
What Does House Flipping Mean?
Flipping Houses is a business strategy that real estate investors use to earn profits within a margin of days to months. Usually, they buy a cheap but potential property, renovate and resell it for some profit. Although there is tremendous potential to make a lot of money filliping houses, it is also possible to have losses on your investment when rehabbing which is why it’s important to not use your own cash or credit to flip houses.
Getting Started in Real Estate Investing Flipping Houses
Honestly, the best way to become an expert at house flipping is just to do it; make mistakes and learn from your mistakes. However, you can reduce the risk factor by following few steps given below while you are just getting started in real estate.
1. Analyze your Financial Situation
Like every other business in the world, Real Estate, especially flipping houses require a good amount of cash first to buy cheap houses and apartments and then renovating them to resell for some profits. Analyzing your financial situation will help you reduce the risk factor of the business. You can invest your money (NOT Recommended), partner up with someone or take a loan from a private lender (private individual that lends money on real estate).
2. Find a GOOD house to flip
Flipping is not about just buying a house, renovating it and reselling. It requires a hell lot of research to find an excellent property that has the potential to earn you some profits. Imagine buying a house for 300K investing another 100K on it and when then no one buys it because of the neighborhood?
Although it is necessary to buy a cheap house, it is more important that you consider factors such as location, good schools in region, value of the home. Moreover, you also need to make sure the house is in sound condition. I mean you don’t want a house that all you can do is tearing it down and rebuild it (unless you’re in a neighborhood that warrants that). You need to find a house that needs renovation.
3. Do some Math to find out After Repair Value
Doing some math before making an offer to buy the house is very critical. You need to find the after repair value (AVR) to determine your profits. AVR is the estimated value of the home after buying and renovating it.
You can subtract your expenses of buying and renovation from after repair value to determine your profits. Even though it is just the estimate, you will get the projection of the benefits early.
4. Personally Supervise Rehabilitation of The House
Although you would need to hire a professional contractor for rehabilitation and renovation before flipping houses, it is critical you or your partner supervise everything personally. It makes it important that the house you are flipping is closer to your residence because you need to go there often to make sure everything is going as expected. This is why it’s critical to have a partner when rehabbing in virtual markets.
5. Race against the Clock
Flipping houses is a race against the time. The longer it takes to renovate the house, the more money you need to invest. Even after renovation, if it is sitting there, you need to pay for utilities. Try to do the whole processes of buying and renovating to reselling as soon as possible to increase the profits. Use the Virtual Rehabbing Process to Leverage Your Time!
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