The Stars Of Flip To A Million Share Their Best Tips For Getting Into House Flipping
House flipping is not the easiest job in the world. While this career or side hustle may seem glamorous and fun, it's really quite difficult. However, if you're drawn to this industry, it's probably for a good reason. You most likely have a passion for real estate or design. Or, perhaps you've seen the profit potential, and you want to make that kind of money, too. Before jumping into this challenging and risky endeavor, you'll need lots of practical knowledge, time, money, resources, and, perhaps, the most critical factor, expert advice.
Luckily, the stars of the HGTV show "Flip to a Million," including Jon and Dani Wrobel and Jason and EJ Williams, shared some of their best tips with Realtor. This cast has extensive wisdom and experience when it comes to fixing up fixer-uppers, so you'd be wise to heed their advice. Below are the tips they would give to beginner flippers.
Don't be discouraged by your bank account, plan properly
Many assume that a hefty sum is required to get into flipping homes. After all, don't you have to buy a house, even a fixer-upper, to profit from it? The cast of "Flip to a Million" says that you don't need to be a millionaire to begin flipping houses, per Realtor. In "Flip to a Million," the host couples start with only $1,000 of capital and try to earn one million dollars before the end of six months, per HGTV. If this doesn't encourage you, nothing will.
At the same time, real life is not a reality show, and you will probably need more than just $1,000. While you can purchase a home with a loan (assuming you have good credit), you'll still need money for taxes, utilities, and insurance, per Investopedia. EJ Williams of "Flip to a Million" recommends having an emergency fund, because unexpected repairs are bound to come up. According to Bankrate, saving as much money as possible before beginning to flip is best. If you have a tight budget, look for foreclosed, auctioned, or short-sale homes to buy. Additionally, if you don't know much about buying a home, seek the counsel of a real estate agent.
Don't feel limited by what you don't know
Getting into house flipping can feel incredibly overwhelming. You may assume that you need to know everything about real estate, remodeling, plumbing, electric, and interior design, among a number of other things. However, while learning something about one or a few of the above may come in handy, this knowledge is not necessary for house flipping. At the same time, you should have an eager-to-learn attitude. While you may not be a master at construction and real estate now, if you're open to learning everything, you will accumulate more helpful knowledge over time.
Additionally, make sure you have someone on your team or a trusted contractor who can complete all the tasks that need to be done. When searching for a contractor, Truic says to ask other estate investors or people you know in the area for recommendations. Your contractor should be able to manage the project, stick to a budget, get all the proper permits, work with other designers, and complete tasks according to the set timeline. Taking the time to find someone who is reliable is very important for house flipping. Also, be sure to oversee the property often, per InvestFourMore. This will ensure that the work is actually getting done.
When buying, pay attention to the home's location
One of the most important factors that potential homebuyers are looking for is a good location. Therefore, when buying a fixer-upper, pay attention to the area's schools, crime rates, restaurants, and highways. This is especially important when flipping homes because everything but the location can be changed, per Raleigh Realty. A house in a good place that has recently been renovated will be purchased at a much higher price than the perfect home in a subpar location.
Another essential factor to look into is the estimated growth in an area. Flipping a house in places with lots of potentials is always a good idea. "Flip to a Million" is filmed in Dallas, Texas, a quickly expanding city. However, other areas such as Nashville, Atlanta, North and South Carolina, and Florida are all growing at rapid rates as well, as EJ Williams told Realtor. Also, keep in mind that homes in busy areas will always be worth more than those in the countryside, per Investopedia. Still, flipping in larger cities may be worth your while.
Don't get distracted by trendy designs
When designing a house, it can be natural to lean into trends. After all, isn't that what most people want right now? However, most home buyers aren't just looking for a house that fits the current trends; they're looking for one that will last for many years. Focusing on adding trendy design elements to your space may make it harder to sell. Instead, think about using timeless features or things that could easily be personalized.
CRD Design Build says that when remodeling a space, consider what elements will still be in style. Loud wallpaper feature walls or dark colors may be in right now, but they are difficult to remove and can appear tacky. Keeping the design as simple as possible is vital so potential buyers can see themselves in the space. Urban Rhythm adds that the layout of a home is very important — when designing the rooms, prioritize functionality over appearance.
Keep your focus set on the present, not the future
When getting into house flipping, the cast of "Flip to a Million" says that it can be easy to get discouraged by rising interest or house prices. This is because mortgage rates change daily, per Bankrate, and the housing market can be unpredictable. These factors may cause you to make hasty decisions out of fear of the ever-changing future. For instance, you may quickly buy a home without researching the area or considering your budget because of the worry of rising interest rates.
However, Jon Wrobel advises not to think about what the market will look like a year from now or how it will look in five. He says to focus on how you will make money now, in the present, per Realtor. You shouldn't let your fear of the future dictate your actions in the present. At the same time, don't jump into a project that hasn't been carefully considered and planned. The best thing to do is to make sure that, on a day-to-day basis, you are making the best financial decisions at the current time.