Flipping Houses for Profit - House Flipping Tips

DKrunner | Oct 9, 2010 |

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With the economic downturn, many people are singing that the house flipping trend is over and dead. They are entirely wrong; flipping houses for profit is not dead, just changed.

Most people who start flipping houses for a profit are looking to flip for a very fast profit. Many people who are flipping properties are looking for too fast of a profit and they get themselves into a bind because they had no backup plan in place, so when things go a little less than ideal, they loss a lot of money. You can flip a house and make a great deal of money, you just have to be smart about your business plan (if you think that you don't need a business plan while house flipping, you're very wrong!). Here are some house flipping tips that ensure that your investment houses bring you cash instead of headaches.

Buy a house to flip that fits the mold.
Now, everyone has heard the saying "buy the ugliest house on the block". This is one of the best house flipping tips to shop buy, while you are looking for your investment houses. You need to find the house that needs the most work (within parameters), but it also has to be in a place where it is not surrounded by homes that need the same TLC.

Here's what you need to do; start carousing the investment property listings in neighborhoods that are nice; close to town, quiet, and classy with a lot of curb appeal. Now you need to find a house within that desirable neighborhood that house that needs a lot of work, or at least polishing. Whether you are shopping for investment properties that are distress sales, foreclosures, or short sales, you need to be willing to put in at least elbow grease, and possibly quite a lot of cash, depending on the updates and fixed the house needs.

Get approved for your purchase and loan before you start shopping for houses to flip.
This step is one that makes the whole house flipping process easier; get approved for a set loan amount before you start viewing potential investment homes. It will save you and everyone else a lot of time when you actually decide that you are buying a house to flip and it gives you the exact budget that you are working with.

Always, always, always get a home inspection.
We recently watched a house flipping show where a young couple bought an investment property to flip. They had a good enough idea but they did not get the home inspected prior to buying the home. We could not believe it! Because this skipped over this all important step, they were not aware that the house had major rot problems. They ended going way over their house flipping budget and causing themselves a whole lot of undue stress. It was actually almost hard to watch, but it could have all been prevented if they had only gone through with that initial home inspection process. Never skip this step when you are buying investment properties, no matter how nice the house looks or how new it is. You always want to know what you are getting yourself into and your house flipping budget is useless without the initial inspection.

Only do updates and remodels that you are sure that people will pay for, and only update the home to as nice as it's surrounding neighbors.
If you are flipping houses for profit, you want to make all of the updates that buyers get excited about – and possibly only those updates. There are certain updates that will have buyers knocking down your door, while others only drive up the amount of money you will want returned from your adventure in flipping houses.

Some of the house flipping projects that are sure to turn a profit in the form of hungry buyers are porches, fences, and nice flooring. There are other details that might just end up being a hang up in your stab at flipping houses for profit; it is actually largely relative to the neighborhood that your investment home is located in. For example, if the houses that you next your investment house in are just mediocre, average homes, you are not going to want to pull out all of the stops and turn the house that you are trying to flip into a full-out castle. Okay, that's a bit of an over exaggeration but in all reality, you don't want to put in marble floors and the best of everything if the house next door does not look the same way. The reason is that suddenly you have taken your quick house flip from a price tag that was affordable to most buyers, and bumped it upwards within a neighborhood who doesn't necessarily have all the same high end updates. Because of "location, location, location", you don't want to make your house significantly more expensive than it's surrounding neighbors. If you do this, you run the risk of your potential buyers running off to a higher end neighborhood and spending their money where all of the homes are as extravagant as the one that they are buying. Long story short; make the house beautiful but don't necessarily try and outdo the house next door.

Be willing to rent, AKA; Backup Plan A.
If you are trying to flip houses for profit, you need to be prepared for the instance in which your investment houses take longer to sell than you originally planned or hoped for. In this case, you should be open to the prospect of renting out your investment property. This way, you can avoid taking the full hit of a mortgage payment on a home that you are not living in. The rental situation is obviously not ideal in a house flipping scheme, but it can prevent your savings from drying up, and it gives you more time to try and sell the home.

There is a lot of money to be made in flipping houses for profit, one just needs to be smart in the way that they go about it. Proper planning and a backup plan can ensure that your house flipping business goes smoothly.