Of all the reality TV shows that have come and gone since the fad started, very few have caused people to sit up and say, “hey, I can do that, and I can make a mint!” like the house-flipping shows that seem to be everywhere on cable these days. But is what you see on TV accurate? Can the process really be that easy? Let’s take a closer look.
The first step is analysing your finances to see if you can afford to take on a second home and remodel it. You should have an idea as to how much your total budget is going to be for the project, and make sure to factor in closing costs on the project home, contractor overruns because things are bound to take longer than you thought, and then money for incidentals and accidentals, as well.
Once you’ve got an iron clad budget, the next step is to find a home that you think is flappable. Most people go into these projects with a property already in mind, but for some, searching for a saveable house that is within their budget and at the same time will be sellable can be extremely difficult. There are many people out there looking to flip houses, so finding one for yourself can be a real chore.
Once you’ve picked your property, you have to go through the buying process. Expect delays and make sure you have the property appraised by an independent appraiser. Also, be aware that closing costs can fluctuate dramatically.
So, the house is all yours. Now what? The best thing to do is to bring in an expert to help you see everything that needs to be done. From electrical to plumbing to interior design, flipping a house right is a huge job, and you have to be prepared to spend the money.
Once renovations have started, be prepared to dedicate as much time as needed to the project. The things that you can do yourself will save you money, but don’t be afraid to call in an expert for the big jobs.
Once the property looks like it should, have it reappraised, and once you’re ready to sell, don’t be afraid to embrace non-traditional methods of selling it, like the Internet or out-of-town newspapers. You need as many eyes on your flipped house so you can unload it as quickly as possible and stop making payments on it. The longer the property sits there, the less successful your house flip will be.
House-flipping has become one of the most fashionable ways to make money for hard working people. But be prepared to go into your investment with your eyes, and your wallet, wide open.