Real estate is an industry that makes billions of dollars every year. It’s considered one of the best investments you can make for your portfolio. Even when the market is bad, people always need a place to live.

 

There are many ways you can dip your toes in real estate, one of the most popular in recent years is house flipping. House flipping is when you buy a house for a low price, upgrade it, and then sell it for a profit.

 

Flipping has been around since the 1980s. It began when clever investors noticed they could buy homes when the market was bad and resell them for a profit when it recovered. It eventually saw a decrease in popularity in the late 90s, only to return as a reality TV staple in the 2000s.

 

Since house flipping became a TV star, its popularity has grown again. People see it as a quick way to make a profit, and while it can be, it can also be a flop. It’s important to understand how to flip a house before you get started.

 

So, here’s how you can get started in real estate by investing in house flipping.

Do Some Detective Work

 

Before you make a property purchase, you need to do some detective work. How successful you’ll be at starting a house flipping business depends on asking the right questions.

 

First, you need to find out how the market is doing where you are. Is there an opportunity to buy low and sell high? If the market is thriving, you won’t be able to make nearly as much on a flip.

 

If there is a chance to buy low, where is the property located? Is it in an area people will want to move to? You can upgrade all you want, but you can’t change the school district.

 

When you find a house that meets the price and location criteria, it’s time to do a little more math. How much will you need to spend on upgrades, and how much of a profit can you make after covering those costs?

 

Doing your research thoroughly, and understanding what you’re taking on can prevent your first flip from becoming a flop.

Secure Your Funding

 

You did your detective work and found the perfect first flip, so now you need to buy it. To do that, you can obtain a fix and flip loan. Fix and flip loans are specifically made for house flipping.

 

Because you’re aiming to resell your buy quickly, loan terms range from 9 to 24 months. To obtain your loan, you fill out an application, provide documentation, and have an appraisal done. Secure your loan quickly before someone else snatches up your perfect flip.

 

Another an option might be to work with other investors using the process of real estate syndication. This allows you to pool your money together with others to invest, repair, maintain, and eventually flip a home. The bonus with this method is that it unlocks the opportunity to take on larger scale projects through the introduction of partners.

Choose Upgrades That Bring Value

 

When your purchase goes through, you’re ready to start upgrading. This is the part where you really have to show your skills. It’s up to you to pull off a great remodel so you can sell the house for the profit you need.

 

Before you swing the first hammer, sit down and make some plans. Decide exactly which renovations you want to make.

 

Are you just doing a touch-up? A full renovation? Are you making the home eco-friendly to take advantage of the sustainable market? What do buyers in your area want?

 

These are all questions you need to answer for yourself before the improvements begin. A solid plan makes it easier to accomplish your goals, and stay on budget.

 

Once you know what you’re doing, you have to decide if you can do it. Some upgrades can be made with little or no experience, but others require a professional touch. Now isn’t the time to try a DIY foundation repair, or you could end up paying more later to fix your attempts.

 

Bringing in professionals will add to your expenses, so determine which parts of the project really need them. Sometimes, you can help them with the work to lower the price, so be sure to ask about all the options.

 

With your plan in place, you’re free to grab the sledgehammer and get to work.

 

 

Investing in house flipping is a hands-on way to get started in real estate. Now that you know what to do, you might even become a professional TV flipper.