Home Flipping from A to Z: How to Find and Flip Homes for Profit

Do you want to increase your earning potential by learning to find and flip homes for profit? While the process isn’t as easy as home flipping shows on reality TV make it out to be, it isn’t incredibly complicated. Besides, as a real estate agent, you already know more about buying and selling property than the average person hoping to make money flipping homes.
Even if you’re not interested in flipping homes for profit, learning more about the process will help you when it comes to understanding and winning over investors. So, whether you’re looking to start flipping homes or hoping to work with more investors, learning the fundamentals of home flipping will help you succeed. Here are a few key items to consider.
Find Homes to Flip by Identifying Signs of Motivation
If you’re going to make any significant profits from the homes you flip, the bulk of your purchases will have to be off-market deals. If you want to find off-market properties, you have to look for distressed ownerships. This may seem difficult at first, but it’s really not once you learn how to identify signs of motivation.
When you see an out-of-state number listed in a FSBO ad, you’re looking at potential sign of motivation. Out-of-state sellers are usually very motivated to sell as it’s often difficult and expensive to maintain property remotely. Another sign of motivation is property listed for either sale or rent; this often means the owner can’t afford to carry it.
Reduce Rehab Costs to Flip Homes for Profit
One of the biggest mistakes people make when purchasing investment property is underestimating repairs. This causes them to overpay for the house and can reduce or eliminate their profit potential. Avoid this by doing your due diligence and requesting thorough inspections and estimates.
When you start the rehab process, get at least 3 estimates from contractors for major repairs. Protect yourself while working with contractors by getting everything in writing. If you don’t, you could get burned with the final bill. Also, before you pay the final bill, make sure the contractor has finished the job to your satisfaction.
Flip Homes for Profit by Planning and Positioning for Sale
Once you’ve managed to rehab your property, you need to position it for sale. If you don’t know the market well and don’t have time to research it thoroughly, you might want to consider listing the property with a local agent. If you don’t, you could easily overprice it, which could cause it to sit for months on end. Or, even worse, you might underprice it and wind up with some serious seller’s remorse.
Remember, when you flip homes for profit, you want to earn enough money to make it worth your time. Also, while you shouldn’t let fear of failure paralyze you from taking action, you shouldn’t jump into a deal without some serious thought first. Don’t purchase a home to flip if you aren’t fairly certain you’ll be able to make a 10–15% profit with the final sale price. Smaller profit margins than 10% are too risky and simply not worth it.
Pat Hiban is the author of NYT best selling book “6 steps to 7 figures — A Real Estate Professional’s Guide to Building Wealth and Creating Your Destiny”, founder of Rebus University and the host of Pat Hiban Interviews Real Estate Rockstars an Agent to Agent Real Estate Radio Podcast with Hiban Digital in Baltimore, Maryland. Follow him on Facebook or Twitter.
