If you leap right in to house flipping will you make big money or loose change?
How you plan a house flip makes all the difference.
There are lots of opportunities to make money on house flips in Canton, Plymouth, Northville and many more of the surrounding communities in the Detroit suburbs. We have seen our share of those who flip a house and make a grand profit, those who just make pennies, and those who lose their shirts.
The following list describes the most basic qualifications you need to get started:
• Nights (or days if you work the night shift) and weekends off: Flipping houses is like moonlighting at another job. Part-time flippers, often called weekend warriors, can succeed as long as they are committed to treating flipping as another job.
• Financial stability: You should be paying all of your bills on time, including the mortgage on your primary residence, before you consider taking on another financial burden. Don’t look at flipping as a way to solve your financial difficulties – you may end up digging yourself into a deeper hole.
• Energy: Couch potatoes need not apply. You need plenty of energy to work on a home while fulfilling the responsibilities of your day job.• Ability to function in a crisis: Flipping a house is more complicated than it seems and always more of a challenge than it looks on TV. If you commonly feel overwhelmed already, taking on another burden may not be prudent.
• Organizational expertise: With flipping houses, time is money, so you need to execute the flip as quickly as possible. This requires an organized mind. You have to act as contractor to make sure all materials are delivered on schedule and that your subcontractors aren’t tripping over one another.• Basic math skills: To be relatively certain that you will earn a profit, you need to be able to crunch some numbers. Overestimate expenses and underestimate profits to give yourself a safety buffer.
• A supportive family: If you’re married, make sure your spouse supports this new venture. Otherwise, you will not only be fighting the world to flip houses for a profit, but you will also be fighting your partner. This often leads to failure both with the new venture and with the relationship.
You may notice that some skills have been omitted from the list, such as the ability to rehab a home or the ability to list and sell the home yourself. You do not need to have all the skills required to flip a home yourself. However, you do need to be able to fill the gaps with people who have the essential skills. For example, if you are not very good at estimating the costs of repairs, you may want to hire a contractor or professional home inspector who is aware of repair costs to inspect the home and provide you with detailed estimates. A real estate agent can often be indispensable in assisting you in determining how much to pay for a property and how much you can eventually sell it for.
Although many people who flip houses fly solo, you do not have to take that approach. In fact, you can often flip more homes and do a better job of it by building a team, complete with an agent, home inspector, mortgage broker, attorney, and handyman/contractor. This approach is particularly beneficial for those who are just learning the ropes.