House Flipping & What It Takes to
Be a Successful Real Estate Investor
home equity articles and tips
Investing in and flipping real estate is one of the many ways in which you can make your money work for you. It is also one of the most profitable, assuming you do it correctly. Unfortunately, there is a great deal of misinformation about real estate investment, including several out-and-out get rich quick schemes, floating around the internet these days.
To truly succeed in real estate and house flipping, you need to take a balanced, conservative approach to it. Here are four tips that will get you on your way to flipping homes successfully as a real estate investor.
Forget Massive Margins
If you've watched house flipping TV shows or read over-hyped articles about it online, you've probably read stories of investors doubling their money or even more. While such home-run flips do come up occasionally in real life, they are very, very rare. If you ignore homes with the potential to make you 10 or 20 percent returns, you'll be writing off the bulk of the flips you could be doing. Focus on more modest profits if you want to realize a consistent and steady income as an investor.
Factor in All Rehabilitation Costs
One of the biggest mistakes new real estate investors make is to look only at the purchase price and the potential market value of a home. While this is a good starting point for establishing profitability, there are also many costs associated with rehabbing a property. You should get repair estimates from contractors, structural inspection quotes and all other relevant information about what the house is going to cost you to fix before you even seriously consider buying it. You should also likely factor in the cost of post-construction cleaning being done by a professional, like Esicon, as this will be important to making your property look its best after repairs have been made.
Keep Volume in Mind
The key to turning real estate investing into a full-time career is to keep a good volume of deals going on at all times. You should be able to reliably find, buy, rehab and close new properties on an ongoing basis. If you can't do this, your real estate investing may produce a tidy side income, but it will never be viable as your primary career.
Broaden Your Horizons
To keep your business growing past a certain point, you will need to do one of two things. Firstly, you can look outside your immediate area for real estate deals, thus increasing the volume of homes you can flip. Alternatively, you can begin looking at properties to turn into rentals, thus securing a source of recurring monthly income for yourself. Either method can increase the amount of money you make throughout the fiscal year.
Becoming a successful real estate investor won't happen overnight. You'll have your share of failures, but with these tips in mind, you can set yourself on the path to becoming a full-time home flipper and real estate investor.
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