You may not be able to do it as a full time job, but flipping houses is a great way to make more money in a month that you will for the entire year. After a while, you may be able to quit your day job and just flip houses as a living.
You would be self-employed, make your own hours, have a lot of freedom, and make a ton of money in a short amount of time. It is, however, risky business that will not give you a steady pay check or health care benefits for your family.
You may make $ 30,000 in one month, but in may be your only source of income for the next six months. You just never know what the real estate market is going to do or if you will be able to sell your investment.
This means that you have to plan out your budget very carefully and wisely. If you do rake in a lot of money during a sale, you should set the majority of it aside so that you will be able to pay your bills for the next several months while you look for another property to invest in.
Selling properties is not the only thing you have to worry about; you also have to find the right house to work on. This task will probably be the hardest one and the one you have to do the most research on.
You will need to know the area in which you are doing business and get to know the demographics. You need to know the average home prices, what the market has looked like for the past ten years, what the average ages are for people in the area, family size, income, cultural preferences, etc.
All of these things play very large factors in how you will do business and what you will put into the remodel. For example, let’s say you buy a home in a lower middle-class area where the average family size is five per household and most people are blue collar workers.
You do not want to remodel a home in the area putting in things like wood floors, recessed lighting, granite counter tops, and high end appliances. These things are very nice and will be appreciated, but a home in the area with the demographics described above will not sell for a profit.
You may have purchased the project at a steal, but with the amount of money you would have to put in to make the upgrades compared to the maximum you could sell the home for in the area you would be losing money instead of making it. Similarly, you would not want to do a low budget upgrade in a neighborhood with multi-million dollar homes because no one wants to buy the worst house on the street.
There are many factors that go into buying and each needs to be considered very carefully before you delve into a project that empties out your bank account. After you choose an appropriate home with the right demographics, you need to start to go to work.
Unless you are a licensed contractor who is qualified and capable of doing all of the work by yourself in a short amount of time, you probably need to hire some people. But before you start hiring, you need to assess your needs.
You should decide if you need new flooring and in which rooms, if any walls need to be taken down, if bathrooms need to be remodeled and if you need new kitchen cabinets and counter tops. These are the basic aesthetic things that should be addressed first.
Hopefully you picked a project without any major structural, electrical, or plumbing issues. These are extremely expensive repairs that would require permits from the city.
If you do need permits, make sure you apply for them as early as you possibly can, as it may take a while for your local officials to process them. After you assess the repairs and renovations that need to be done you can hire contractors who will give you an estimated budget and time line.
Jack R. Landry has worked in real estate since 1988 as an expert on home buying and construction. He has written hundreds of articles on real estate and home construction including home builders in Utah.
Jack R. Landry
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