If there was one thing to learn from the recent downturn in our economy it was that relying solely on one source of income is a really bad idea.
I always like to have a backup plan.
If I lost my job tomorrow I'd actually walk out with a smile on my face.
Can you say the same thing? I hope so.
If not it's time to get to work on your backup plan.
Searing how to flip a house for profit fits the bill perfectly.
Now is the perfect time to flip a house for profit.
It's scary for most people which is why now is such a great time.
Our recession happened because the real estate market was too heavily leveraged.
Now that everyone is gun shy from real estate, a savvy investor can buy property cheap and turn a tidy profit.
There is money to be made.
A lot of money to be made, but you must be a smart investor.
Keep these strategies in mind as you begin your journey into flipping houses.
1.
Don't overpay I know, it seems so obvious but remember this.
The money is made on the purchase not the sale.
A good rule of thumb to follow is to limit your buying price to 65% of the repaired value of the home.
Remember you're in this to make money so if you simply cannot pay retail.
You must factor in that there will be closing costs, rehab costs, and other expenditures.
If you pay more than 65% of the repaired value of the home your margin will be too low to make money.
Even worse, you may lose money.
These aren't homes you are going to raise the family in and make lasting memories in so don't be afraid to walk away from a bad deal.
2.
Use as little of your own money as possible On your first purchase you will probably have to have to put some of your own money down, but do not put any more than necessary.
The more of your own money you tie up the more you limit your own cash flow.
It may take a little time to get comfortable with this idea, but you simply will not be successful if you tie up your own money in your investment properties.
Once you flip a house for profit you should have money coming in to use for your future ventures.
3.
Have someone else do your renovations I have a hard time getting used to this principle.
I like doing things myself.
I enjoy fixing up houses.
However, the simple fact is that if you try to do everything yourself you are seriously limiting your potential.
You will only be able to work on one house at a time.
One house may be all you are looking at now but once the snowball gets rolling you will have multiple deals brewing at the same time.
If you are rehabbing a house you could miss out on several great deals.
Put together a team that will help you accomplish your goals.
Have a handyman or contractor on retainer and put them to work.
You will lose far more in lost profits from missed deals doing all the work yourself than you ever will paying them.
4.
Buy from motivated sellers Remember strategy number 1? That's right.
The money is made in the purchase.
The best way to get a great deal is by buying from motivated sellers.
Banks are very motivated.
Their mortgage portfolios turned into foreclosure portfolios.
They need to unload those properties.
You can get a house at a great price and flip that house for profit.
The economy has created many other motivated sellers too.
People who lost their jobs and are relocating for work will be in a big hurry to unload their homes.
The folks that are in the unfortunate situation to be faced with a foreclosure will also be in a hurry to sell their homes.
5.
Whoever mentions price first loses.
This is the first rule in negotiating.
If you aren't a skilled negotiator watch some episodes of Pawn Stars or American Pickers.
Stop chuckling, I'm serious.
These guys are skilled negotiators.
Always let the other guy make the first offer and then counter.
It's a terrible feeling when you throw out a price and the other guy says "sold!" before you finish your sentence.
That just means you lost thousands of dollars.
These strategies will help you get in the right frame of mind to begin your quest to learn how to flip a house for profit.
Make sure you do your research.
Anyone with the right tools can become a real estate investor, but if you must do your homework.
My final piece of advice is to know when to act.
If you spend all of your time planning and never act you will not make any progress.
At some point you have to get in the game.