It’s easy to watch a show on TV about flipping houses and become excited about all the potential profit to be had – and for what looks like little work. Of course, the reality of it is much more complicated than they would ever show on television. Buying a cheap house “as is”, for pennies on the dollar, does not make one a successful flipper. A skilled real estate investor requires a great deal of experience and networking to manage all facets of the buying, renovating, and selling of homes.
Replacing drywall and hanging new cabinets is only a small part of the overall flipping process. To become a true success requires a wide range of managerial and interpersonal abilities that take many years to develop.
If you want to pass on your craft, you’ll need to know some things first. Let’s look at those today.
It Takes an Army
The procedure of buying and selling houses requires a small village of people to make happen. You’re going to need some friends in high places if you expect to make any headway in such a competitive field. A talent for networking is needed for those who are serious about achieving success in real estate investing. You will need to assemble a team to get work done quickly and efficiently. The longer a property is in your possession, the more you will pay in financing costs. It is imperative to move quickly in the investing business.
An experienced hand can guide you on the right path if you’re just starting in the game. Many people who have attained vast wealth in the flipping business are willing to share their knowledge in a mentorship role. Don’t neglect a resource like Freedom mentor reviews to help you find the most suitable tutor. Having someone who has already made every mistake imaginable to teach you the ropes will set you years ahead of the competition.
Some of the Basics
Know now that it may be some time before you ever look at the first home listing. Before even thinking about getting into the field, you first need to build up a sizable amount of credit and capital. The option to finance is there, but you’re going to have a greater return on your investments if they’re made out of pocket. You will be doing a lot of business with a number of financial institutions; a solid credit history will serve you favourably.
A clear and defined business plan is an absolute must to stay on track and achieve your goals. A bulletproof plan is required if you expect to get any funding from banks in today’s lending environment. A descriptive summary that includes details about the type of work you intend to do, where you will be doing it and the time devoted to each project will make up your goal statement.
You’ll have a difficult time getting your business off the ground without a real estate accountant to help decipher your finances, taxes, and other business requirements. You’ll need an attorney well versed in real estate law to serve in an advisory role to defend against potentially devastating litigation.
Make Smart Investments
A tight and highly-detailed budget is going to go a long way in making sure you’re making sound decisions without eating away at your profits. Knowing what buyers value most when they’re looking to purchase a home can help you make smart decisions when choosing where to spend the money allocated for upgrades and renovations. Having an experienced and well-trusted contractor among your crew is important to get accurate estimates when calculating the potential return on your investment.
Knowing the market that you’re working in is going to determine your ability to make good purchasing decisions. If you’re not knowledgeable about your market, a seasoned real estate agent can fill gaps in your knowledge and help you make the best choices when buying. Your agent will know and guide you to the best areas where houses are moving fast; time spent on an unsold property is time and money lost.
A large network of professions and knowledge are needed to survive in the hostile environment of real estate investing. If you live long enough to see success in the field, then you will have gained the experience needed to pass on your trade to a younger generation of entrepreneurs.