If you’ve been keeping up with our house flipping blog, you’ve already got some pretty great tips under your belt for how to flip houses successfully. And if you’ve watched our show, you know we’ve learned a lot over the years as we’ve gotten into the business and figured out how to make it work for us. We’ve had cases where I walked into the house and looked at Tarek and said, “This is awful. We can’t flip this house,” only to be proven wrong by hard work and creative interior design.
With that in mind, I wanted to share some of the biggest lessons we’ve learned and that we talk about in our house flipping seminars. If you learn these and keep them in mind when you start to flip houses, you won’t ever lose your shirt in a deal.
Don’t Use Your Own Money
I can’t say this enough: you don’t need your own investment capital to get into house flipping. You don’t need it, and you shouldn’t use it. You can find capital through an investment partner, a private lender, or a hard money lender, and you can completely avoid using any of your own money.
There are still risks involved, of course, especially if you go with a hard money loan. However, by finding investors or lenders to back your flip, you’ll be in good shape to come out on top.
Don’t Be Afraid to Walk Away From a Bad Deal
A savvy flipper will always wait for the right deal. New investors who don’t have a lot of experience in flipping will overlook a lot of red flags or gloss over them. They won’t do all the research about a property, and they’ll rush into buying, thinking it will all come out in the wash.
Well, it usually doesn’t come out in the wash. Sometimes you’ll find out there’s a lien on the house that obliterates your margin. Sometimes the market in that area is saturated with flips. And sometimes the house will be in such bad shape that you’ll have to completely demolish it and start over.
Now, you usually won’t know about that last scenario until you’ve already purchased the property and it’s too late to back out. All is not lost, though, if you remember that…
Your General Contractor is Your Best Friend
Your contractor(s) can dig you out of a lot of pretty messy holes if you develop a good relationship with them. Whether you find them through friends, other investors, or driving around looking at work sites, when you find good contractors, hold onto them!
Make sure that your contractors know that this is a business and that you’ll be providing them with a lot of regular work. Pay them on time. Trust them to do their jobs, and let them do everything that you’re not confident about doing yourself.
When you treat your contractors well, they’ll treat you the same. After you’ve had your inspector come through and give their verdict on the house, bring your general contractor in to give their estimate on what needs to be done.
As you start to flip houses, you’ll learn a lot about investing, real estate, the housing market in your area, and about home repair and rehab, too. You can also avoid a lot of mistakes and learn how to handle a lot of situations from our house flipping blog. But if you want to learn all the secrets and latest techniques, you should sign up for one of our house flipping seminars. When you attend a Success Path Education workshop, you’ll learn all you need to say, “Yes! I can flip this house!”