If you decide to enter the real estate markets as a house flipper, there will be no shortage of excitement, nor are you likely to have a hard time finding prospects. There are, however, four very important things you’ll never have enough of and you need to know about them now, before you jump in:
1. Precious Time
Don’t think that you can buy a property, spend a quick weekend spiffing it up, then put it up for sale come Monday morning. Flipping involves endless searching for the right type of home in the right condition and at the right price. The search is followed by the buying process, where you’ll view the property, research it, have it inspected, make an offer, have it accepted (or not), obtain financing, close, etc. Only after that can you begin transforming the property into a hot sell. Expect to spend lots of time on all aspects of flipping.
2. Renovation Knowledge
Unless you’re a professional contractor or hobbyist carpenter, you’re never going to know how to fix everything you encounter. From a falling chandelier to caved-in stairs to leaking pipes, you really need to know a little about everything to accomplish an efficient flip. Start making industry connections now. Good connections would be construction and real estate professionals, because you’re really going to need them.
3. Personal Endurance
If you can’t endure the wait time or don’t have the patience to put up with tedious delays, this business will be frustrating for you. Increase your personal endurance levels, so that you can get through missed deadlines and appointments without losing your cool.
One of the scarcest commodities in flipping is likely to be your cash. Even if you’ve got a significant amount of savings, your cash is going to be tied up nearly all the time once you get into the full swing of things. It’s not that your net worth won’t go up along the way. It’s just that money will likely be going from one project to another quickly, then onto the next sale before you can even count what you made on the last deal. Keep meticulous records and keep some cash set aside for your personal needs, too. This is especially true if you have family obligations. You don’t want to be caught in a bind due to the expected delays and endless expenses.
House flipping, when done right, is an exciting and profitable venture. However, if you’re not fully informed going into this business, the surprises could knock you right out of the game. Keep your chin up, your eyes open and don’t let the craziness distract you from your goals. For the long-haul, flipping is definitely worth the trouble.