House flipping can be fun, but it can also be exhausting. There is profit to be had too if you know how to do things right. Here are some tips on how to get started on your own house-flipping business:
Buy Fixer-Upper Houses for Sale
Look for fixer-uppers in your area. You do not want houses that are so run-down that it will cost you three times the purchase price to restore them. If you can get houses for sale for cheap, that is even better. Until you really get going in this business, start with just one project house at a time. There is a learning curve to house-flipping!
Set a Reasonable Budget
Know exactly how much work you intend to do yourself, and how much work will need a professional contractor. Budget for the contractors first since you cannot go without their services and you should not risk doing electrical or plumbing work yourself. Whatever funds you have left after that you will have to set a reasonable budget to restore and remodel other parts of the house.
You have to have attainable and realistic goals with house-flipping. When do you want to have the house complete and on the market? Two years is very reasonable, but if you need money sooner for your next project, a year to a year-and-a-half is also a reasonable goal. Also set monthly goals, such as the amount you will spend, and what things you will accomplish each month in order to get the house done on time.
It also helps to set a goal for how fast you want to sell the house. Once you put it on the market, there are things the real estate agent can do to move your project house faster. It may cost you a little extra, but that depends on where you live. You should also decide if you are willing to sell it to a real estate agency if you are unable to sell it within the time frame you have established.
Meet Your Goals and DON'T Go over-Budget!
Finally, make sure you meet all of your goals on time and that you avoid going over-budget as much as possible. If you go past your own deadlines, then the whole project starts falling apart. Going over-budget in one area means you will have to make cuts in other areas or lose money on the flip. There will be times when you will need to go over-budget (e.g., flooring is totally rotten, plumbing needs a complete overhaul, etc.). Then you can decide how to manage your remaining finances.