How to Flip A House Without Losing Your Shirt

by Brandon · 2 comments

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It my last blog post I discussed Five Reasons NOT to Flip a House.   House flipping is a risky venture, but by following these five tips you can decrease your risk and increase your chance of making a sizable amount of money in a short time.

  1. Make Your Profit When You Buy:  Never overpay for a piece of property. I’ll say it again: NEVER overpay for a piece of property. A good friend and great Real Estate Agent Sean once told me, “When I submit an offer and I don’t blush, I offered too much”.  Another way to look at it: If you are getting more than 10% of your offers accepted, you are offering too much.
  2. Get Favorable Loan Terms: If you can’t afford to use 100% of your own cash, make sure any loans you get are favorable to you. Hard money lenders can be excellent tools if used correctly, but make sure your term is at least six months longer than you expect to hold the property for.
  3. Double Your Budget, Double Your Timeline: Don’t underestimate the costs involved or the time it takes to complete a project. If you are not a seasoned flipper or you are going to do the work yourself – double your budget and double your timeline. If the project still makes sense, move forward. Remember, each month that the home doesn’t sell YOU must make all the payments. If you cannot afford to make them yourself, partner with someone who can.
  4. Make a Plan:  Never just buy a property and hope it will sell. Know it will sell. Do your research ahead of time by knowing what other similar properties have sold for, as well as the average length of time it took to sell.  Plan for the worst, hope for the best.
  5. Have Multiple Exit Strategies: Never allow “just sell the home” to be your only plan to unload the property. You need to always be thinking outside the box. Can you refinance the home into a 30 year mortgage if needed? Can you sell to another investor if needed? How about a lease-option? Be flexible and creative and you will find success a much easier task to accomplish.

Do you have other tips for successfully flipping a home without losing your shirt? Post them here!

About Brandon

has written 199 Awesome posts in this blog.

Brandon Turner (G+) is the BiggerPockets.com Senior Editor and Community Director and owner of RealEstateInYourTwenties.com. He is also an Active Real Estate Investor (Flips, Apartments, and Buy-and-Hold), Entrepreneur, World Traveler, Third-Person Speaker, and Husband. Come hang out with him on Twitter!

P.S. looking for hard money loans in California? Be sure to check out my friends over at northcoastfinancialinc.com. They have very competitive rates, can fund within a week and specialize in fix and flip loans and other hard money loans.

P.S. Looking for more real estate investing knowledge? If you are interested in a top-notch course to help you understand the nuts and bolts of creative real estate investing, I would like to recommend Ben Leybovich's Cash Flow Freedom University. Ben is a close friend and has been my trusted adviser for years. He's a smart guy and CFFU is pretty awesome. The course is waitlisted, but while you wait for an opening Ben will send you tons of FREE content. Seriously. Click here to check it out.

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{ 2 comments… read them below or add one }

Chuck April 25, 2012 at 2:35 am

Brandon,

Itching to try a flip at some point myself. The one thing I would certainly have lined up is my contractors. I would probably do some of the work, but I have a 9-5 so I would be managing a handful of subs. I have a few good ones I use already for my buy and hold properties and feel comfortable with. Managing all these moving parts sounds like a good challenge to me..

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Brandon April 25, 2012 at 2:38 am

Hey Chuck,
Flips can be a lot of fun if done correctly and with a good backup plan in place. You said it right – you have to be able to manage all those moving parts. Good luck!

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