Most people have heard of (if not seen) HGTV’s Flip or Flop or Fixer Upper. Tarek & Christina buy distressed properties — foreclosures, short sales and bank-owned homes — remodel them and sell them at a profit. Chip and Joanna turn dilapidated but potential-rich houses into showplaces that are helping revitalize neighborhoods throughout central Texas.
While you’re fully aware of this investment opportunity, and perhaps have even thought about doing it yourself, you’re probably like most who will never attempt it. Why? It may be that you have that same feeling you had as a small kid going to a haunted house – fear. You may feel you can’t do it. You’ve never tackled anything like this before. What if it costs more than you planned to fix it up? What if it doesn’t sell? What if, in fact, you lose money?
We want to help you understand the FLIP process and formula for buying, rehabbing, and selling houses for a profit so that the fear will go away and excitement will take its place. It is our intention to provide you with the best guide to buying, fixing, and selling houses.
Here are six reasons why flipping homes is a great investment strategy:
Flipping generates cash. Buying, fixing, and selling houses is a quick way to earn money. Done once, a flip creates cash. Done a lot, it creates cash flow. Both put money in your bank account.
Flipping is a short-term venture. Flipping a house, when done properly, often is accomplished within a few months. This means that if you try it and like it, you can do it again and again. If you decide it’s not for you, you’re not tied to a long-term commitment. Additionally, you get immediate feedback on your performance, allowing you to learn quickly and build on your growing expertise.
Flipping works in any market. Why? Because it’s about following a process, and that process isn’t tied to any specific market or any particular time period. Your success in buying, fixing, and reselling houses comes primarily from finding value (buying a house below retail market value) and creating value (making improvements that increase the selling price beyond their cost). Finding and creating value always works whether your market is cold, lukewarm, or just plain hot.
Flipping can be done part-time. We know many successful investors who earn tens of thousands of dollars by flipping part-time, and we recommend that everyone start out that way. Then, as you build success and confidence, you’ll always have the option of staying part-time or going full-time. Flipping works either way.
Flipping doesn’t require a lot of your own money. In investing, when you find the right opportunity, the money will find you, and that’s never been more true than in real estate investing. Lenders know that good real estate deals make good loan opportunities; that is why there are lenders willing to back rehab investors, even first-timers. If you bring them the right deal, they will finance it.
Flipping is available to anyone. It is an equal opportunity investment choice. Flipping doesn’t care who you are, how much you make, where you live, or what you do. If you can find a house worth flipping, you can finance it and thus the opportunity is available to you.
Maybe you’re looking for a satisfying activity to complement your day job. Or maybe you are contemplating a change of career and are drawn to the opportunity of real estate investing. Either way, we want you flipping over flipping houses too.
The book FLIP is a resource we will gladly give you to help you understand the practical, systemic approaches to flipping in an organized and profitable way.
Interested in knowing more? Contact your favorite member of The Tomlin Team, and let’s do coffee!