How To Flip Houses & Make Money In Real Estate – Without Prior Real Estate Experience
There are many factors that go into a successful rehab, but there are basic mistakes we see new rehabbers make time and time again. Keep on reading for our five tips that will help to start your house flipping career on the right foot.
1. Not understanding rehab cost
– As someone just getting started in real estate investing, it’s critical to educate yourself on the hard and soft cost of rehabbing a property. Good education on the solid cost of items to rehab a property is critical to the success of truly determining if a deal is a winner or not.
Each potential rehab deal needs to be analyzed correctly based on rehab cost to successfully confirm it will be a profitable deal when it’s sold. The best way to learn how to do this (without losing a ton of money trying to do it yourself) is enrolling in a real estate investing course or a house-flipping coaching program.
2. Lacking a solid rehab team
– Every successful rehabber has a solid team of general contractors, plumbers, electricians and other professionals who are needed to flip houses. A bad rehab team is one that doesn’t understand the importance of deadlines, lack’s education on working with a rehab client and can’t manage a rehab effectively; this can have a negative effect on the rehab in general. It’s also important to utilize professional vendors who are licensed and have the proper insurance to protect you from potential violations and on the job insurance challenges.
3. Lacking Backup Vendors and Contractors
– Not having back up vendors or contractors is a very bad habit for first time investors. Good contractors/vendors are always busy with other clients because they are good, so it’s important to have back up in case they are too busy to help you with your rehab project.
4. Failing to Pull Permits
– Some rehabbers fail to understand the importance of a permit during a rehab project. Permits are critical for Town/City sign off so the work is supervised and done legally. Failure to utilize permits will delay a project, cause fines by the Town/ City and cause issues with potential buyers and lenders during the resale process.
5. Chasing profits versus selling based on timeline
– Many first time investors focus on making the most profit on a project as opposed to selling faster and turning their money into their next project. It’s important to price a property a little below the actual value so it goes under contract quickly and that a solid buyer can be chosen to increase the chances of the deal closing in a timely manner.