#1 You Make Money When You Buy, You Collect When You Sell
Perform the proper due diligence upfront to determine the maximum purchase price you should offer before you buy the property. Be conservative with your analysis and build-in ample profit and contingency for your repairs. Don't overpay for a flip, you are setting yourself up for a total flop!Learn How to Analyze a House Flip Deal
#2 Avoid 'Eraser Math'
When you put 'pencil to paper' and analyze the numbers of the deal, don't erase the numbers just to make the deal work. Don't worry about what the seller is asking for the property. Analyze your numbers and come with your own offer price.
#3 Location, Location, Location
It's better to have a bad house in a good area, than a good house in a bad area. You can change the house, but you can't change the neighborhood or the location. Buying houses in desirable areas that have low crime rates and good schools will be much easier to sell quickly and for top-dollar.
#4 Don't Do Something Too Big
Don't buy an extensive gut rehab or teardown for your first project. Repair costs are difficult to estimate and contractors can be hard to manage. Start with a small cosmetic rehab to get your feet wet and move your way up to more complicated rehab projects as you gain more experience.
#5 Get Your Finances in Order
Real estate is an expensive game and you will need to have money or access to money to purchase properties and pay for repairs. Before you buy your first flip project you need to have your finances in order and/or lenders lined-up to fund your projects.
Loans for Flipping Houses
#6 Don't Over-Improve the Property
It's easy to get carried away with improving your property by putting ship lap on every wall, but certain improvements can be a total waste of money. Do your research on comparable properties in the area to spy on your competition and determine which improvements will boost your bottom line. You ultimately want to provide a product that equals or slightly exceeds your competition.
Loans for Flipping Houses
#7 Don't Plan on Doing Everything Yourself
Unless you are a full-time Contractor by trade it's generally a bad idea to assume that you are going to do most or all of the work yourself. If you don't know what you are doing leave the work to the pros and focus your time and efforts on work that you enjoy and are qualified to do.
When in doubt, hire it out!
#8 Do Things Right the First Time!
Take pride in your craftsmanship and homes that you renovate. Make sure that you pull permits, don't cut corners and do things right. Your reputation is on the line!
Learn When you Should Get a Permit
#9 Doing One House Flip Will Teach You More Than All of the Courses and Books Combined
You can go to all of the house flipping seminars, take all of the house flipping courses and read all of the house flipping books
in the world, but you will learn the absolute most by buying and rehabbing your first flip!
#10 Just Get Started!
There will never be a 'perfect' time for you to get started. Stop making excuses, and just get started!NEXT: HOW TO WRITE A HOUSE FLIPPING BUSINESS PLAN