So, you’re interested in flipping a house?
According to ATTOM Data, 6% of all homes and condos were bought and resold within the same 12 -month period. Average gross profit for flip is at an all-time high with an average home flip returning $68,143. Homes took an average of 182 days to complete a flip in both 2016 and 2017, an 11-year high. Home flip lending volume is at a 10-year high with $16.1 billion, which is up 27% from 2016’s $12.6 billion total dollar volume of financed home flip purchases.
If those statistics made you even more determined to start your house flipping journey, then here are some things to consider:
As with any large financial investment, doing research is absolutely essential to ensure you minimize the risk as much as possible. You need to be well acquainted with every aspect of the house flipping journey, as well as the risks involved.
Reading blogs such as this one is a good place to start in order to get an overall feel for the industry, but if you’re really serious about flipping houses then you’re going to have to spend at least a few dozen hours digging deep into the housing market, the best neighborhoods to invest in, finding actual properties within those neighborhoods that have the potential to be profitably flipped, all of the contractors you’ll need to rehab the house, your financing options, tax and zoning laws, as well as a myriad of other areas that’ll need to be researched.
Creating a Business Plan
If, after doing all of the research mentioned above, you’re still set on pursuing a house flipping venture, then it would be in your best interest to create a house flipping business plan. This will serve several purposes and should include a summary of all the different areas you’ve researched as well as your plan moving forward. The more detailed the better. Not only will this show potential investors, contractors, and other collaborators that you’re serious about this, it will show yourself that you’re serious. Finally, it will force you to tighten up your plan as much as possible, which will only serve to minimize risk even further.
While this was a very brief introduction into what exactly flipping a house for the first time entails, we hope we were able to give you a sense of the enormity of this undertaking. If it sounds too stressful, its best that you found out now rather than after you successfully secured financing for your first project. If you’re still set on flipping houses, then we wish you the best of luck!