Many people assume flipping a house involves little more than buying a house, applying a fresh coat of paint, trimming some bushes, and reselling it for a profit. They’re wrong. Here are the five must-haves for success.
The first is a group of experts that are familiar with the legal, accounting and construction ramifications. They can ensure all work is efficient and on time, which is important. Flippers are typically working against the clock. If they are too slow, financing costs eat into their profits.
Next is a handyman, or a knack for home improvement. House flippers who make the most money tend to be the ones that can change a sink or shingle a roof themselves, instead of paying someone else. And they can do the work on short notice, as well.
Third, they have a good lay of the land. They know what characteristics, such as the number of rooms or type of home, are most desired in a certain area. They also know what nearby houses sell for, and if future developments, like a new shopping center, are pending.
Fourth is a good estimator, as in someone who can provide a good idea of what it’ll cost to complete structural changes that make a house more enticing. Big underestimates expose the flipper to the potential of big losses.
And fifth, house flippers must have a dose of patience. Savvy flippers avoid buying houses for less-than-favorable terms because of emotional attachments. They find diamonds in the rough. And if they aren’t finding good houses at a good deal, they move on to greener pastures.