How to Start a House Flipping Business
If you’re ready to turn flipping houses into your own business, keep reading.
You’ve probably heard of flipping houses to earn some cash. You may even have friends or colleagues that have invested in real estate and house flipping. And, you’ve certainly heard of popular house flipping shows on HGTV such as “Flip or Flop” and “Fixer Upper”. House flipping has been popular for a while now. Many people began investing in real estate years ago just after the market crashed. Prices were low, and property owners were desperate to sell.
The greatest part about flipping houses is that you can be as hands-on or hands-off as you’d like. You can make it your full-time job, or you can do it on the side and keep your day job. But, before you get started, you should remember this: the key to owning a successful house-flipping business is to have all your ducks in a row before you begin.
Why Choose House Flipping?
One of the most popular ways to invest in real estate is via house flipping. When you flip a house, you buy a property in need of updates and remodeling at a price typically below the market value for the location. At that point, you make the necessary repairs and updates to increase the value and sell the property for a price higher than the cost of the original price and remodeling. You can also look for foreclosures or short sale properties that only needs some cosmetic updates. According to CoreLogic’s most recent house flipping statistics, during fourth quarter 2018, house flips accounted for just under 11 percent of all home sales.
At New Again Houses®, we’ve been flipping houses since 2008. For the most part, we’ve seen it all, and we know what types of issues come up during the house flipping process. And, we know how to fix these issues too. When you start a franchise with New Again Houses®, you’ll have access to all the systems we’ve been building since 2008. We will work with you so that your franchise can succeed. Learn more about flipping houses with New Again Houses.
Here are some other key points you should know before you start flipping houses:
Create a Business Plan
All successful entrepreneurs start with a business plan. And they don’t just make one, they stick to one. A business plan provides you with a guide, so you stay the course and build a strong portfolio.
Think carefully about how much money you want to put into your house flipping business and factor this information into your business plan. There will be many costs to factor in. You should also consider how much time you want to put into it as well. Factor in your needs, and your family’s needs, when making this decision.
At New Again Houses®, we’ve helped several of our franchisees develop their own franchise business plan. When you start your own New Again Houses® franchise, you’ll have access to our business plans and tools to help your franchise to succeed. If you want to run your own franchise full-time, we can help you plan for that. Or, if you’d prefer to stay at your current job, we can help make your franchise work around your schedule too.
Manage Your Finances
Probably one of the most important pieces of the real estate investment puzzle is to manage your finances. It is very important to reduce and keep your debt and spending down in order to save. The less debt you have, the more you can buy. Lenders focus on debt when evaluating a potential borrower; avoid credit as much as possible. On top of controlling spending and paring down the debt, saving is paramount. By setting aside a percentage of each paycheck, you can build a nice nest egg, so you are ready to invest sooner rather than later.
It is also important to be realistic about potential profits when house flipping. After factoring in renovation costs, interest rates, purchase price, closing costs, and taxes, you aren’t going to be walking away with a huge profit. Many people start flipping houses expecting to make a lot of money, and then they quit when they realize it’s a lot of work. Learn more about potential house flipping profits when you flip a house.
Flipping houses is not cheap and you will need some money to get started. We try to make starting a New Again Houses® franchise affordable, no matter what your financial situation is.
When deciding to invest in real estate, most savvy investors tell others to start small by buying the first house. One way to keep costs low is to buy a house with minimal work to be done so that you can live in it while making the changes and updates. This is especially beneficial for first-time buyers as you can talk to a lender about mortgage plans that involve remodeling which may require very small down payments.
Once you are successful with your first flip or rental investment property, you are ready to add to your portfolio. Look for properties with minimal repairs and updating – ideally, you can do it yourself – as you add investment properties.
Build Your Business
When you get to a point where you can make investing in real estate a full-time profession, you may want to consider investing in a real estate franchise. With this business, you simply continue what you are doing but on a larger scale. Buying into a real estate franchise often makes it easier to start your own business since you have a strong network working with you to make your dreams a reality.
Flying by the seat of your pants when it comes to investing in real estate is never a good idea. If you want to be successful at real estate investing, let us know. We can help you build a successful house flipping business. We have helped our franchisees create house flipping businesses that are successful, and we can help you create your own. If you’re interested, contact us. We’d love to have you join the New Again Houses® team.