Do you enjoy house flipping shows?
Because we sure do! As we are in real estate, it’s a ton of fun to watch those reality star house flippers purchase a home, renovate it, and sell it in just a few weeks. But as professionals, we also know that these shows aren’t meant to be educational. They are for one purpose: entertainment.
Just like in all reality television, the producers “enhance” reality a little bit. They add in some extra drama, unrealistic timing, and personality disputes to make the show more entertaining. While this does make for a better show, the end result sometimes barely resembles the reality of house flipping.
House flipping can be a remarkable way to build wealth, if you have the correct mix of skills, ambition, capital, and drive. It could even become a lucrative career! How do you know if it’s the right match for you? Take a look at these five questions, and then ask yourself if you’re ready to flip houses!
Are You Ready for All the Expenses?
A cardinal rule of real estate investing (and just about every other business) is that it takes money to make money.
If you’re going to be flipping houses, you need to have the funds to comfortably take care of all costs and potential risks. If you’re currently in debt, then this might not be the business for you (at the moment).
But if you have some extra money that you wish to invest, house flipping and investing in real estate can be a fabulous idea. Just be ready for all the associated costs that you might not be expecting. For example…
Real estate fees
Loans and financing
You may want to make sure that you can budget for all of these, plus any unforeseen risks in the future.
What’s the Condition of the House?
One of the greatest movies about home renovation ever made is “The Money Pit.” This Tom Hanks film is about a couple who purchases a “fixer-upper” home that they plan to renovate. However, the more work they do, the more the house falls apart, costing them more and more time, money, and stress. It’s a hysterical film, especially if you work in real estate.
The goal of a house flipping to avoid this kind of situation at all costs. That’s why you need an experienced eye when it comes to spotting a diamond in the rough. You want to buy a home that you can upgrade and sell at a profit, quickly. What you don’t want is a project that drags out over years, basically gutting and rebuilding a house from the ground up.
What Are the Categories of Repairs?
When you’re looking to house flip, buildings usually fall into three categories: cosmetic repairs, moderate repairs, and extensive repairs.
Cosmetic repairs are usually just a few new coats of pain, replacing cabinets and fixtures, yard work, and other small upgrades that will increase the home’s visual appeal and boost the purchase price. These are the older homes on Zillow that need a refresh. This could be a good place for beginners to start.
Moderate repairs usually involve renovations, such as redoing the kitchen, bathrooms, and basement, upgrading the heating, and maybe putting on a new roof. The costs of moderate repairs are considerably higher than cosmetic, as you will need to hire professional contractors to do the work for you.
Extensive repairs result in the greatest risk. If the house is damaged in a way that compromises its structural integrity or safety, it will become exponentially more expensive. We do not recommend this strategy if you are a newcomer to house flipping.
Do You Have Any Repair Skills?
An excellent way to boost your bottom line when flipping houses is to do some of the work yourself.
Of course, you probably can’t do ALL of it. That would drag out the project, and the purpose of flipping a home is to sell as soon as possible. However, having some handy repair skills can be a great way to cut down on costs.
Keep in mind that you only want to do this with the skills you already have. House flipping shouldn’t be an excuse to learn how to wire a home or fix pipes. Stick with your already existing repair skills and leave the big stuff in the hands of your contractors. Don’t take on too much! Remember, a little bit of knowledge can be a dangerous thing!
Can I Do It Myself, Or Should I Get Help?
Inexperienced house flippers often believe that they will get all of the rewards if they take on all the risk. That’s true, but it also can be extraordinarily stressful, especially if you’ve never flipped a house before.
Smart investing in real estate requires experience and knowledge; two things that a newcomer likely doesn’t have firsthand. That’s one of the places where Regalway Homes can come in! We’ve been working in real estate investing for years now and know all the ins and outs.
If you have any questions at all if house flipping is for you, or if there are better strategies for you to invest in real estate, we invite you to book a consultation with us today. Let’s figure out the best possible way for you to make money in real estate!
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