By Mike Baird
All new business ventures are scary. It’s true, and there’s no point in denying it. They’re all a little bit scary because they all involve some level of risk. That said, flipping houses really doesn’t have to be a fear-inducing prospect. There’s no reason that you should be any more scared of getting into house flipping than you should be of working on and launching a cool new startup. In fact, there’s actually less reason to be scared. In the greater scheme of things, the risk involved with starting a real estate investing business is really pretty small if you do it right.
You Don’t Have to Quit Your Day Job
First of all, you don’t have to “go all in” when you start flipping houses. It’s actually very reasonable to approach it as if it were a part-time job or as if you were building a startup. Instead of quitting your day job and jumping into house flipping headfirst, you can work on your business plan in the evenings when you get home, and you can start looking for leads in the mornings before you go to work. You can call general contractors and project managers on your lunch breaks, and you can have a real estate agent list your flips and sell them for you while you work.
Once your business has started to pick up speed, you can decide how far you want to go with it and whether or not you want to change tracks and turn your real estate investing business into your new career.
Exit Strategies Prevent Big Losses
When you do decide to say goodbye to your day job, you also have a number of ways to ensure that you make at least some money on almost every flip. If you find that you’re going over budget and you don’t have the means to keep going with a rehab, you can partner with another real estate investor or sell it to them. Then you can take the money you made back from selling that property to buy another one that will be more lucrative.
If you have a house that’s sitting on the market and won’t sell, holding it can be profitable, as well. You’ll just have to find a good property management firm and rent it out until the market is right to sell.
You Don’t Need Your Own Money to Get Started
And, of course, the best part about flipping houses is that you don’t have to be independently wealthy to get started in the business. Unlike banks, private lenders and hard money lenders don’t look at your credit when they decide to lend you the capital you need for a flip. They look at the property and the deal, and they make their decision based on the same things that factored into your decision to invest in this particular property. So, if you do your homework on your deals, you shouldn’t have any trouble getting the money you need to kick-start your real estate investing business.
Flipping houses definitely involves some risks, but savvy investors only make calculated risks and always plan a few exit strategies in case things don’t go as planned. You can start a profitable and successful real estate investing business—you just have to learn to let go of your fears and go for it, one step at a time. Like I said, you don’t even have to quit your day job yet. You can give yourself plenty of time to get to know the business, and you can start making money while you do it. It’s an all-around win.