Flipping a house is an AWESOME idea! You’ve seen the shows, you know someone who did it, or you check in with our blogs and social media often enough to see so many success stories.
Now, you’re ready to try it!
What could go wrong?
While I applaud your enthusiasm and believe that you should do what you’re passionate about, I also want you to be prepared. In addition to guarding yourself with as much education on the subject as possible, let’s kickstart your dreams with a few things you should know before getting started.
Curious about what kind of training you need to set yourself up for success?
You can jump on the line for a FREE conversation with a
Business Development Consultant today
to discuss the best strategies for your business.
Dial (800) 473-6051 NOW to set your appointment.
Knowledge and Confidence Go a Long Way
Do not jump into flipping houses blindly.
Though you don’t need a background in real estate to flip a house, you do need to make sure that the time and money you are investing (whether the money is yours or a lender’s like at Cogo Capital) is well spent and maximized.
Fix and flip education teaches you:
- How to find funding
- How to find, negotiate and close a great deal
- Which materials are trending
- Which high price items are worth the investment
- Which materials can be low-cost
- How to hire contractors for the lowest cost
- How to manage contractors to meet timelines
- How to market your property
- How to yield the highest profit
- And much more
Essentially, getting an education in the field minimizes your risk and maximizes your profit potential. You’ll go into the industry confident and knowing what to do, when to do it, and why.
Learn How To Analyze the Deal
When determining how much to offer to yield at least a $20k profit, do you account for everything? Do you look at all the taxes? Can you adequately estimate repair costs, contractor cost, and understand how much you should put down versus borrow?
One of the BIGGEST mistakes people make in fixing and flipping houses is made during the deal analysis. Learn to make a sound deal to set yourself up for success.
Don’t Fudge Repair Costs
It’s easy to be optimistic, emotional and of course, unknowing when doing your first real estate rehab deal. Even with a complete inspection from the get-go, you always need a buffer in your costs as you never know what might surface (there are hundreds of investors who know this tale all too well).
Your projected repair costs are rarely ever too high.
When you learn to assess repair costs rationally and in a business-like manner, your first flip will bring you fewer surprises.
Which leads us to…
Don’t Get Emotionally Connected
You are spending money to make money. You’re not spending money to see your dream home come to fruition only to sell it to someone else. It doesn’t make sense to choose the flooring YOU like best or the landscaping as YOU would have, especially if it means more money spent.
Real estate investing isn’t about extravagance, but profit. Spend money ONLY on the deals that make sense, and not the ones that have somehow pulled at your heartstrings.
You can enjoy the process and have fun with it, but real estate investing should be data-driven, and going into your first deal with this thorough understanding is necessary.
Stick to Your Original ARV
You may think adding a swimming pool or another unnecessary amenity can boost your ARV and maximize your profit.
Do NOT give into this temptation. You cannot count on the market consistently appreciating. If the market shifts, ignoring your original ARV can eliminate your room for profit.
Time Is Money
The faster you flip, the faster you pay back your loan, earn your profit and can move onto your next real estate rehab. The most time-consuming elements of the process can range from hiring contractors, getting contractors to complete the project on time and even selling your home.
You must know how to manage your project from start to finish. Your comfort level with negotiating and project management will ensure you the profit you expect.
Know The Area
What sells in that stucco subdivision you grew up in may not sell in your up and coming neighborhood across the county. You need to know what the other homes are like in the area, what people expect in those homes and what’s trending. You can do this by attending a few open houses, doing some slow neighborhood tours, and becoming best friends with Zillow.
Supervise And Regularly Check On Contractors
It’s a hot time of year for the housing market, and contractors are using this opportunity to boost their prices on unsuspecting real estate rehabbers. Do you know what costs you should expect to pay? You need to. (See number 1.)
Contractors can also belabor the process, not only extending the time it takes for you to receive your paycheck but will decrease the size of your paycheck (i.e., more interest paid, increased time between flips). You must learn how to supervise and manage contractors so they are working on your timeline and you aren’t working on theirs. This single skill will catapult you faster toward being a successful, repetitive flipper more than most other traits.
Understand You Don’t Need to Be An Expert
No matter how much education you have, this is still your first fix and flip.
You will be a mix of nerves, stress, excitement, passion. No matter how much you know, you still won’t have the experience until you complete your first project from start to finish.
Don’t let fear stop you, either. You won’t be an expert, but hopefully, you can feel comfortable and confident enough in your knowledge to know you can make even your first deal an incredible success.
We provide options at the Lee Arnold System of Real Estate to not only educate you but to provide one-on-one coaching to guide you through the process. To learn more, schedule a call with a Business Development Consultant to day. (800) 473-6051
The benefits of flipping houses can outweigh the trials if you go in with an understanding of the process and your role in it. The key is to assure that you’re doing everything in your power to do your best. And if you make a mistake, learn from it.
“Success does not consist
in never making mistakes
but in never making
the same one a
George Bernard Shaw
If you’re uncomfortable with your limited knowledge base, get the training you need.
If you don’t know how to get funding, attend a Funding Tour and learn all about it.
If you’re worried about negotiating your first deal, learn from those who’ve done it hundreds of times.
When you have the opportunity to make money, why wait? And why let your lack of knowledge stop you? Whether you’d do two deals a year or 20, you can have access to the extra cash and can rest assured you’re making the most out of every deal when you have the right education.
To Your Success;
Lee A. Arnold
The Lee Arnold System of Real Estate Investing
Have a deal under contract that you would like a quote on? Let us know. You can fill out a quick questionnaire at CogoCapital.com to receive a rate quote via email or you can call us anytime at (800) 747-1104 to talk to a loan officer. With millions deployed and millions to deploy, we want you to get the capital you need for your real estate investing.
When you come to Cogo Capital® looking for a private money loan on a property under contract, we’ll assure you have quick turnaround, excellent terms, and millions to lend. Cogo Capital® serves both local and national real estate investors, real estate agents, and private money lenders in quality, multiple loans.