Written by: Emily Joswiak • July 26, 2022• Lifestyle

Questions You Need To Ask Before You Start Flipping Houses

The main reason house flippers don’t succeed is because they don’t have a plan. Learn the right questions you need to ask to succeed in house flipping.

Before you start house flipping, you need to have a detailed financial and construction plan laid out, no matter how big or small the project. Many first-timers rush into the market wanting to capitalize as quickly as they can, and while timing is essential, you can lose a lot of money with one wrong move. To help you make the right plan to succeed, here are a few questions you need to ask before you start flipping houses.

Is It a Good Deal?

To start making the right financial plan, you need to determine whether the overall deal is worth it. The purchase price is the most crucial factor to consider as it will determine how much of your budget can go into renovations, thus affecting your selling price. As a rule, you shouldn’t spend more than 10 percent of the purchase price on construction. If the purchase price is too high, or you’re going to spend too much on repairs, it’s not worth it.

Do You Have the Finances?

In the same vein as the previous section, you must ensure that your finances are in order. That means being prepared to handle the worst-case scenario– losing money. You need to have a backup plan in case something goes wrong along the way, and if you don’t have the finances to come back from an investment loss, it’s not worth the gamble, even if the odds are in your favor. Primarily because unforeseen construction needs, licensing, and other issues can crop up along the way, meaning you may need to bail on the investment and cut your losses or sink more into the investment than initially planned.

Do You Have the Right Connections?

Knowing the right industry professionals can save you a lot of money. This includes plumbers, landscapers, electricians, and other contractors. In addition, if you plan on becoming a landlord and renting out your newly flipped property, you need a good property manager to help you with legalities, marketing, etc. The right team can set you up for success and help the purchasing, flipping, and renting processes go much smoother.

Do You Have the Time and Dedication?

Flipping a home takes a lot of time and dedication. On average, even with an experienced team, flipping a house can take six months or longer. While you want to take your time, not everyone has the schedule to do so. If you’re not prepared to devote all your weekends and days off working on the property, then house flipping may not be the path for you.

Keeping these questions you need to ask in mind before you start flipping houses can save you a lot of wasted time and money. But if you remember to plan and be prepared, you’ll be ready to take on house flipping no matter what happens.

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Last modified: July 26, 2022