Occasionally, I like to step away from the hectic day-to-day at the office and go on a long walk. And, what I’ve found is that the longer the walk, the easier it is for me to work out some of my toughest challenges. Though I’ve been buying houses to renovate and sell for over two decades now, every now and then I still have to tackle problems that don’t always have a clear solution. That’s part of why I love my job. “Boring” never applies to the work that I do.
On one of my shorter strolls last week, I met Louis. A young, wanna-be investor, he was thrilled to learn that I flip homes. Half joking, he asked if there was a kind of 101 on flipping houses that might help the hard work ahead of him seem less daunting. Anytime someone approaches me about wanting to be a real estate investor, I’m happy to answer their questions and even guide them through the process. So, I told Louis if he was serious that I’d help him get started down this challenging, yet potentially rewarding, career path.
The 101 on Getting Started Flipping Houses
The truth is, even if you only want to flip houses part-time, you’re still going to need all the help you can get. Purchasing property to renovate and sell quickly requires the same set of skills for part-timers as it does for career investors. Risk is inherent to all real estate investing and, unless you’re prepared, you could lose a lot more than your shirt even on one deal. Take the right steps and work hard, however, and you could very well turn flipping houses into a good business whether you just work nights and weekends or all week long.
To get you started, here’s the 101 on buying, renovating, and selling houses for profit that I gave my new friend, Louis.
Invest in your education
Even if you have some experience with home renovations, are good with numbers, and theoretically understand the real estate market, your first—and best—investment will be in your education. Rehabbing an investment property under a strict market timeline takes both a mindset and a skillset you may not have exercised before. Offering a number on a house that pleases the homeowner and positions you for seeing good returns requires confidence, empathy, and good math to say the least. Assuming you already have these and other skills is a common rookie mistake. And, that assumption can land you in a bad deal that takes years to recover from.
But, be wary of classes on flipping houses that are costly, time-consuming, and don’t have a real-world track record to back up their in-class claims. A comprehensive program should get you from out behind the desk and in the field investing fast, not siphoning off your funds and energy when you should be buying homes. Make sure the courses are taught by experienced investors, too, and that the program produces verifiable results that more than just a handful of students have seen.
Work with a mentor
Your education won’t end once your classes do, which is why having a mentor on hand is critical at every stage of your career. If you’re unsure that a deal is good or are struggling to earn a homeowner’s trust, a mentor can assess the situation and teach you how, and why, you may need to shift gears. If you’ve found yourself in a deal that has turned problematic, a mentor can help you course-correct and reduce the potential damage. Having a mentor’s eyes on your business is also ideal because they’ll hold your feet to the fire so that your skills, and company, continue to grow.
Unfortunately, many mentor programs for real estate investors won’t keep your best interests at heart. They’re often in it just for the money and advancing their own agendas. So, choose someone who is interested in guiding you towards your goals while also challenging your limits. Make sure they’re available for one-on-ones, too, as often as you need and at no additional charge. Finally, they must be a seasoned investor who’s been where you are now and knows what it takes to get ahead. So, check their track record—and make sure it’s where you want to go.
Find homes to flip
If you don’t have a way to find fixer-upper homes for sale in good markets and bad, sustaining a real estate investing career will be very hard. Homeowners have to be motivated to sell their homes, too. Otherwise, you’ll just be spinning your wheels on “great” deals that may not ever close.
Finding homes in need of repair so that you can add to their value and then realize a decent return when you sell, however, isn’t always easy—in any market condition. Investor competition is fierce, especially for homes that are actively listed. And, the most common methods for generating leads on real estate investments, like lead lists and foreclosure auctions, don’t yield consistent results.
The best way to regularly find homes you can flip is to get distressed homeowners to come to you. You’ll have less competition for these off-market real estate deals since they won’t be advertised to every investor. You’ll also have a better chance of converting your leads to sales since these homeowners will be looking to you for help.
Of course, building the kind of reputation that brings homesellers to you can take a lot of time and money. But, to grow your house flipping business, you’re going to need access to the best leads on an ongoing basis. And, that begins with homeowners who know they can trust you.
Use good tools to make great deals
Every good investor needs a set of great tools to ensure that business runs smoothly. From correctly valuing residential investment property so that you buy, rehab, and sell at the right price to tracking your leads through the sales pipeline, the quality of your tools can make or break individual deals—and your business as a whole. And, with so many house flipping apps available to investors today, streamlining your processes can be easier and more accurate than ever.
Of course, wading through all of the real estate investing tools out there to find those that live up to the hype can be overwhelming, not to mention expensive. They’re not all designed to work well with each other, either. When securing deals and growing your business are on the line, what you don’t want are ineffective tools that are costly and slow your other resources down.
A plug-and-play app, like HomeVestors®’ proprietary software program, UGVilleSM, is a great example of one tool that integrates or cooperates with the functionality of several others. Find at least one tool like that and making deals could get a whole lot smoother.
Get financing in place
Though you’re in the very early stages of your new career flipping houses, there is no better time to start thinking about money. Wait until you’ve found your first deal to try securing the funds and you could find that the home slips through your fingers—and into another investor’s hands.
The most common way to fund flipping a house is to use a hard money loan. These funds are dispersed quickly for the purchase and rehab of a property. Loan approvals can happen in a week or less, too. Lenders don’t mind loaning on major fixers, either, and can provide attractive rates that accommodate fast fix-and-flip timelines.
But, it can take some time to find a lender you can trust and that will loan to a new investor. And, since even the best hard money lenders in the nation also vary on the terms that they offer, the sooner you begin your research the better positioned you’ll be to build a professional relationship—and get your deals funded.
Network for support
Last in this list, but certainly not least, you’ll want a network of investors to lean on for support. No new investor ever built their house-flipping career alone, which is why you’ll want to connect with as many like-minds as you can. There will come a time when you need a referral for an electrician or a plumber. You may want insight on how others have recovered from selling investment property at a loss or whether investing in real estate rentals down the line might be good for your portfolio. Your network can give you feedback on these questions and more. They can also generally provide you with support, through the rough times and the good.
As I mentioned before, in addition to taking the right steps to becoming a real estate investor, you’ve got to work hard at your craft at every turn. So, if you can find a kind of one-stop shop that provides you with all the training, tools, and team support that you need, you can focus most of your efforts on profitably flipping houses. Luckily, such an all-in-one business model does exist. I know because it’s the direction I took to become a house flipping pro fast.
The Best One-stop Shop for Becoming a House Flipping Pro
Before I became an independently owned and operated HomeVestors® franchisee, I was overwhelmed by the prospect of buying, rehabbing, and selling homes. I didn’t have a background in real estate or in investing. But, I had a passion for the industry and a drive to do well. I also had the habit of taking long walks. And, like Louis, it was on one of these walks that I met a seasoned HomeVestors® franchisee who changed the course of my career. He happily gave me the 101 on flipping houses. He also told me why HomeVestors was the all-in-one solution to becoming a real estate investing pro.
As a member of the HomeVestors® franchise team, you get the education, tools, and resources you need to start flipping homes. From your initial week-long training to the ongoing mentoring with your Development Agent, the opportunity to perfect your craft is always present. You also get use of the proprietary valuation tool, ValueChek®, so that running accurate numbers quickly is easy. Leads on distressed homeowners will come right to you, too, since you’ll have access to the “We Buy Ugly Houses®” national ad campaign. With a lending portal that connects you with the nation’s best hard money lenders, funding good deals won’t be an issue, either. I’ll tell you what I told Louis: there is so much you get by joining the HomeVestors team. The challenge for you may be deciding when, not if, to give them a call.
Your future as a house flipper can start today if you request more information from HomeVestors now. Franchises are limited, so don’t delay!