How to Flip a Property
How to flip property is using investment capital when buying a fixer upper, usually a single family house or condo, and restoring the investment property to a more visually appealing house with full functionality. Typically when flipping property, the investment property is then resold to a long term buy and hold real estate investor (landlord) to rent out, or to an end buyer to live in themselves. Occasionally after they rehab a house, the real estate investor will keep the house as a long term rental property for passive income and long term appreciation.
How to Flip Property
A property is acquired with considerable potential equity but needs improvements before a retail buyer will purchase it. The improvements are made and then the house is marketed and sold to a retail buyer, or occasionally to another real estate investor.
Flip Property – The Pros:
- Ability to make large amounts of cash on each property if done right
- No tenant headaches
- Able to hire contractors to do the work
- Lots of resources available for how to rehab a house
Flip Property – The Cons:
- Managing contractors can be challenging if no previous experience
- Exposure to risk is higher due to either tying up your own investment capital, or paying more for financing
- Learning how to flip property if you do not have experience, may prove to be more costly and time consuming than expected
- Credit is pulled on all loan applications for regular financing, and for most hard money as well. Although with hard money lenders credit is not as much an issue, they usually still want to see strong finances.
- Beginners usually underestimate expenses and how long the project will take
- Possible long wait for paydays since property may sit on the market for months after being rehabbed
How to Flip a Property – The “Why”
Learning how to flip a property is an important skill for real estate investors to acquire. If you learn how to turn an ugly house into a pretty house, you can make a large profit from creating value on your real estate investments. There are rehab properties in every price range with varying potential profits waiting to be had. Many property investments offered by investors who specialize in wholesale properties are rehab deals. With a good source of fix and flip deals and the skills or team members in place to rehab a house, you can either have a solid 6-figure per year business running with your supervision, or build a substantial portfolio of investment property acquired for around half of their retail values. On a side note, the feeling of satisfaction after taking an ugly house ready to be torn down and turning it into a beautiful home for a family is incredible. Even if you end up only buying a fixer upper as a seldom-used option on the deals you do, it is an option you need to have at your disposal like any Smart Lazy Investor would.
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Rehab a House Guides & eBooks – Here we share the fundamentals of how to rehab a house from the greatest property flipping experts in the industry. We will show you what you need to do step-by-step on a rehab project from start to finish to collect big checks.
Fix and Flip Resources – We have scoured the internet for the best rehabbing resources to use in your business. From cost and time saving services, to deal analysis tools, you can find it here.
How To Rehab a House Videos – Tim Allen may be more fun to watch, but these videos will provide you with real instructions on how to rehab a house properly. Many This Old House videos are here for your education in property flipping.