By Mike Baird
You’ve done all your homework, and you know in your head that you’re ready to start flipping houses. But something’s holding you back. You can’t seem to overcome the fear that you’ve missed something or that you’re not really ready. First of all, don’t feel bad—this happens to everybody. You’re making a big career change, and you’re taking a leap that most people won’t ever take in their lives. It’s scary. But you can get over that fear and take that leap with confidence if you have the right flipping strategy. Here are the tips I used to convince myself I was ready when I first started flipping houses.
Build a Support Base
Whether it’s your spouse, your family, a few close friends, or a combination of those people, you need a support base to help you get started and to keep you going. These are people who will keep you accountable when you’re searching for leads and calling motivated sellers. They’re the ones who will listen when you need to vent and give you the motivation you need to keep going when you want to quit. Believe it or not, having the support of these people to pull you through when you need help is just as important as following the 70% rule when buying properties or staying within your rehab budget when fixing your flips.
Know Your Exit Strategies
Personal confidence may not be enough motivation to allow you to take the plunge. Knowing that you have a plan in place if you can’t sell a flip, if you go over budget, or if you don’t get offers for your asking price will give you the stability you need to get started. If you take the time to figure out how you can fail, you’ll be able to build exit strategies for all contingencies, and you’ll be more likely to succeed. Even if you do fail, with the right exit strategy (like holding and renting a flip that won’t sell), you can still make a profit.
Buying your first flip house can be one of the most daunting things you ever do, but you can make it easier by going with a smaller property with a lower ARV (after-repair value). With smaller properties, you won’t need to borrow as much money to buy and rehab them. When you get them back to market value, you still make a profit, but it’s a more modest one than you’d make with a larger property.
That’s perfectly fine, especially when you’re just getting started and you want to build your confidence. Make your first flips small starter homes that’ll be great for individuals, couples, or young families, and you’ll build the skills you need and learn the process quickly. Before you know it, you’ll be more comfortable with borrowing larger sums to use on bigger rehab projects. Then you’ll be making more money on fewer flips, and you’ll be flipping more properties simultaneously, too.
If you’re afraid to take the leap, you’re definitely not alone, but with the right house flipping strategy you can gain the confidence you need to get started. Get help from friends and family members you respect. Work out your exit strategies, and find smaller flip properties that you’re comfortable with from the beginning. Then you can steadily grow your business, and every step you take will feel a lot smaller than this initial leap. When you do have bumps in the road, you’ll be able to recover and you’ll likely still make a profit. Use these tips and get started on your journey to house flipping success.