Now, it’s very important to understand that flipping houses is a type of business, and in order to be successful at it, you must treat it as such. It’s a full time job, and all decisions must be made objectively – this is not a hobby. As your own personal finances will be tied to the fortunes of the business, it’s a big step to take.
Starting Capital is Critical
Money is very likely to be the major hurdle that you face. Learning about the markets and how to renovate the property is the easy bit. We’ve already mentioned that you will need a decent amount of money to start with, but why is this the case?
Aside from the initial purchase of some property, you need to be generating money to pay yourself a wage, and potentially other people if you’re also employing them. This means that you need to be selling houses with some degree of regularity, and to begin with, you almost certainly won’t be selling anything until a few months down the road. This can be a slow burning business, as you build up to having a real money-making portfolio. It’s important to be moving quickly; if you find that you’ve got a building that just won’t sell, and there’s a fair amount of money tied up in it, then you may need to enlist the services of a company that will quickly give you an offer and buy the house from you.
By having a good pot of money to begin with however, you’ll be giving yourself more time to get things right, and won’t be worrying about cutting corners to make that sale. It’s definitely a good idea to start out at the very lowest end of the market; that way you won’t have too much tied up in properties themselves.
The answer then, is that it’s entirely possible to make good money by flipping houses, but you do need to have a solid starting position, and you need to work very hard to get where you want to be. This blog post will help you with some more pointers.