How to Flip a House: 5 Tips to Find & Renovate Homes & Make MoneyLifestyle The List
House flipping has made quite the comeback after somewhat disappearing as a result of the "Great Recession". While not everyone is doing it at the level of shows like Flip or Flop, you can still carve out a piece of real estate for yourself! We caught up with house flipping guru Doug Hopkins to learn the basics.
1. Know What Sells
The first flipping fundamental? Know what sells! "People love kitchens and master bathrooms,” reveals Doug. “If you can put the majority of your money in those two areas, you're going to do well." Don't forget to upgrade the master closet and modernize the kitchen. Just remember to keep things in neutral colors to appeal to the masses.
2. Hire a Contractor
Next, don't be a hero – hire a contractor! Doug says the biggest mistake house-flippers make is deciding make repairs themselves to save money. “They're not professionals,” he warns. “They don't do this every single day." Keep in mind that every rookie mistake means more time you're paying on a mortgage, and more money fixing your flubs. “You can do some little things yourself, if you want to put up a fan or something like that,” Doug advises. “But leave big stuff to other people." Duly noted!
3. Know Your A.R.V.
Flip tip number three? Know your A.R.V. – which stands for after repair value. “It’s after you fixed it up, and you do what you want to do, what is the house going to be worth?” says Doug. That margin is where your profit lies.
4. Flip with a Real Estate Agent
Don’t stop at hiring a professional contractor – get a real estate agent, too! "You need a realtor that works full time, that's going to make sure they're doing everything in the world for you to sell it,” Doug emphasizes. The truth of the matter is those “for sale by owner" listings often languish on the market. Doug says you need a realtor to do all the legwork like holding open houses, knocking on doors, and putting your listing in magazines. “’What kind of promotion are you going to do to sell my house?' […] That's what you want to ask for,” insists Doug. Get to sellin’!
5. How to Find Houses to Flip
Now that you’ve learned how to flip houses – how do you find homes to flip in the first place? We’ve got some tips to help you get started. First, type "wholesale houses" into a search bar to find people who specialize in selling houses in your area. You’ll find a multitude of experts who can snag you properties at rock bottom prices. Next, check with your city to see what houses (in the area you'd like to buy) whose owners are currently in the process of evicting tenants. Then cold call the home owner to see if they’re interested in letting you take the house off their hands. They might be so tired of the legal woes that they're willing to sell the house to you without a fuss. Lastly, look for auctions on foreclosed houses. It's a gold mine of perfectly good houses – some of them brand new! – that may only need minor repairs or renovations.
And that’s how you can make money flipping house!