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Get After Your Flipping Dreams — 4 Tips for Successful House Flippers & Real Estate Investors

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Flipping homes for money does not happen overnight. People make good money flipping homes every day in this country, but every one of those people had to do their research, take some risks, and understand the different lending options available before they jumped into it. The footwork put in before the deal is made will serve you well as you navigate the uncertain waters of real estate investing. 

Buying a home and flipping it, is not for the faint of heart. So if you’re thinking about testing the waters of home flipping, read our introductory guide on how to get started. 

Is Real Estate Investing for Me?

Let’s put it this way, real estate investing is not the type of thing people stumble into without any interest in it. Most successful house flippers possess a couple of natural attributes that serve them well in the home selling business. Some might describe it as follows:

  • A natural hustle: If you’re one of those people that doesn’t have to be told what needs to be done and you just go out there and get after it, this might be for you. Selling homes is a hustle and you need the inner spark to get it done. 
  • An eye for a good deal: Some people are good at identifying a potential deal. Whether that’s getting a household item or the best deal on a car. 
  • A mind that’s comfortable with numbers. Real estate investing will have some surprises and some unexpected costs, but a successful investor knows how to crunch the numbers and get accurate and precise estimates on costs.
  • A cursory understanding of the market. While you don’t have to be a real estate expert, knowing the market that you’ll be working in will make it easier for you to spot a good deal or a bad one. Having an eye for potential good investments serves a house flipper well. This includes knowing neighborhoods, upcoming city renovations, developments, etc. 
  • Have a solid and fundamental understanding of home repairs or know someone that does. Being able to spot a good contractor can be a lifesaver. You don’t have to be the world’s greatest handyman, but having some understanding of home repairs or some experience hiring trusted contractors puts you in a better place. It also makes it easier for you to spot needed repairs on a possible flip. 

4 Tips Every House Flipper Should Know 

There is no golden book or Holy Bible of house flipping, but there is a lot of tried and true advice out there from people that have learned things the hard way. We have written a lot about finding the right flip and breaking through the real estate business, but there are several other key points to consider. 

Here’s some sound advice to keep you on the right track. 

#1 Arm yourself with knowledge—consider a real estate license

While there is no set requirement to become a house flipper, getting a real estate license is a good place to start. Going through the process teaches you to break through the real estate lingo, learn important terms, regulations, forms, HOAs, etc. You make connections in the community. You also get access to the MLS to better gauge prices. Also, going through the classes and instruction will solidify your commitment to the endeavor.

If you want to jump in right away, contact a person you trust and know is a solid real estate agent. Perhaps you have good connections already. Use them.  

#2 Establish good connections with reliable contractors

You don’t want to wait until you have signed on a house to start looking for your contractors. If you know the market, do your research on well-vetted contractors and workers. Even if you plan on doing a lot of the work yourself, you’ll likely need to hire a licensed contractor for a job or two. Establish connections with them before so that you have a go-to and know who you can trust. 

#3 Work the math— flipping homes is a numbers game

Before jumping on a deal, make sure that you know how to work some numbers and accurately estimate the cost of certain repairs. For example, putting in new floors. Make sure to factor in the cost of all materials and labor. Don’t forget to factor in taxes, insurance, mortgage payments, real estate commissions, and other marketing costs. 

#4 Don’t over-improve the home — this is not your dream home

One common mistake some beginning flippers do is they try to do too much to a house. The fact is that even in a seller’s market, you’re not going to get a home for more than the market is willing to pay. This has a lot to do with the neighborhood and the home itself. Remember that you’re not working on your dream home. You’re just working to get the home sold without overspending on repairs. For people with vision, it’s almost a creative experience imagining what a house can become. They easily get carried away, especially at first. Be frugal, be cautious with what you spend on repairs. 

Get the Right Loan Fast and Kickstart Your Flipping Dreams!

We didn’t even get to the money part. The kind of loans that you get are a central part of the house flipping business. Here at Entrust Capital Funding, we offer reliable hard money loans so that people don’t have to waste time going through banks. 

Ready to get your hands on some real estate investment loans and opportunities. We want to hear from you. Call Entrust Capital today

The Era of Remodeling: Why People Love Home Renovation

By | hard money loans, home renovation | No Comments

 

You might not be aware of this, but there are approximately (maybe more) twenty television shows dedicated to real estate renovation and house flips. People love to watch home transformations. There is something about watching as a house goes from a dilapidated, rotting, termite-infested, asbestos-painted, poorly insulated with rusted appliances-home to one that is rescued from the real estate underworld, brought back from the dead, and soon glimmers with new life. All of this achieved through hard labor, clever remodeling and construction, decoration, and interior design. There is something that draws people to this particular venture and it might just be far more ingrained in our nature and our current culture than we think.

There is practically an entire internet genre dedicated to DIY home projects. Yet, it is not just the rewards that keep people coming back to home renovation. As CNBC reported, house flipping is at record highs. In 2017 there were more than 207, 000 house flipped. A house flip is defined as any home bought and sold in any 12 month period. You buy a property, work to renovate it, and sell it for a profit.  

Flipping a home will usually involve a certain amount of renovation and many of these shows include flipping as part of the “plot.” In fact, that’s part of the appeal—people love to see something infused with new life and they love to see the profit that comes from it. But what is it that makes us so attracted to home renovation shows? Why have home projects become such a popular pastime for homeowners and weekend warriors everywhere?

There is Inherent Romance in a Beautiful Home

There is simply something romantic in a beautiful home.  Older homes especially have this ingrained romantic quality. Houses tell stories and an old home infused with new life tells a great story of rebirth. There is something wholesome about the labor involved in restoring repainting the walls or fixing the roof. At the same time, when people sacrifice so much for their home, the maintenance and restoration of it have more than economic implications; there is sentimental value, there is a personal and emotional reward.

Economic Reasons

It wasn’t that long ago that the country went through a great recession that presented a lot of challenges to the real estate industry. In many cases, people could not afford to buy new homes or were short on cash to do their home repairs. During this time people had to resort to maintaining their homes on their own and in doing so discovered a whole new world of adventure exciting projects.

The Internet

You can type in anything from installing bathroom tile to repainting the bedroom and you will find a plethora of DIY videos, blogs, and tips. The advent of the internet provided people with access to amazing resources. Hence the rise of the self-renovation and the DIY craze.

The Drama of Transformation

People love to see progress and overcoming challenges. Every single one of these shows is usually presented with challenges or unforeseen problems along the way to the renovation. In fact, if you’ve ever tried to do anything on a house, you know that you’re likely to run into problems.  People relate to this.

There is a Reward at the End

Human beings are hardwired to seek rewards. We also admire people with vision and renovating a house requires technical knowledge and creative vision. The bottom line is that home renovation has become a big cultural topic. People love to fix up their homes and they love to rehab homes and flip for a profit. Why? Because everyone loves a beautiful home. The real estate industry is ripe with opportunities and renovating and flipping homes is just a part of it. With new lending opportunities, the industry is now open to everyone interested in making money off of real estate. As El Paso grows and sees more and more for sale homes and interested buyers, the potential to make money expands too. Working with hard money lenders is just one way to do it. Don’t know what that is? Call Entrust Capital for free information.