House flipping has become a popular pastime for many people. With the realization that purchasing a rundown house and handling repairs yourself could lead to significant monetary gains, many people decided to pursue this career. HGTV has made house flipping even more popular with various shows dedicated to the hobby. While some people have successfully segued into flipping houses, there are even more people interested in doing it, even just on their own home, but have no idea where to start. I’ve compiled common questions about flipping a house and have included answers to these questions in order to help you learn whether or not flipping houses is something you’d like to try.
What exactly is house flipping?
There are different kinds of house flipping that people could be talking about. One kind is where you purchase a home, then immediately turn around and sell it at a higher value with minor (if any) renovations. However, I’ll be focusing on another kind of house-flipping, which is where you purchase a house at a low cost after calculating the return profit and cost of renovations. Once you buy the house, you begin doing renovations, fixing any issues and remodeling it into a nicer home than it was previously. After the renovations are done, you sell the house and rake in a profit.
Where do you get the money?
Generally, unless you have significant personal wealth on your own, house flippers find investors to give them money, many who sometimes go into business with the house-flipper and then split the profits. You’re likely going to need to take out a loan, especially because house flipping is considered a riskier financial investment and few people have enough of their own money to fund house-flipping, especially when they first get started.
How long does it take to flip a house?
If you’re doing the kind of flipping that involves remodeling, the time it takes to turn it for a profit can vary. Some house flippers are fortunate and can complete renovations in a matter of weeks, then sell their property fairly quickly. Though, it’s more likely that you’ll make an investment of several months on flipping your home, especially depending on how long it takes to find a seller.
Do you have to know how to do the repairs?
While many people do the majority of the repairs themselves when flipping a home, there are even more who have contractors do a lot of the work. While you can often handle tasks like painting and decorating, if you do not have formal training in plumbing or electrical issues, it’s necessary to find contractors to help out with this work. Many people who flip houses have agreements with contractors who work frequently on their homes and often have deals that cost less than a random contractor. However, when you’re purchasing a home to flip, these are costs you need to take into consideration.