By Mike Baird
You probably already know that I’m a big fan of flipping houses. As a real estate investor, it’s one of the most rewarding things you can do. You take a dilapidated property, relieve its owners of a serious financial burden, turn that property into a great place to live, and sell it at a profit to an excited new home buyer. And because you’re fixing up a distressed property, you’re helping the neighborhood’s property values out, too. It’s the kind of investing that can not only turn a great profit, but can also make you feel great about yourself.
Of course, before you start flipping houses, you do need to make sure that you’re ready to dive in. If you’re not certain that you’re ready, ask yourself these questions.
Why Are You Starting a House Flipping Business?
It’s important to define your “why.” If you can clearly identify why you want to flip houses, then you’ll always have that motivation to fall back on when you feel overwhelmed, when you’re having problems finding leads, when a deal goes south, or when anything else happens that makes you feel like you want to give up. When you can stop and tell yourself, “No, I won’t quit. This is important to me because…” then you’ll be on your way to a successful and sustainable business because you’ll always know why you’re doing it.
How Well Do You Know Your Market?
If you’ve done your homework, you should be able to rattle off a basic overview of the local markets where you want to flip houses. That doesn’t mean that you won’t continue to do market research, but you’ll know that you’re ready to start flipping when you feel comfortable discussing your flipping markets with other investors, real estate professionals, or friends and family. If someone has a question about your market, such as what the comps are going for or how the market in the area has trended over the past eighteen months, you should be able to answer with confidence.
Where Are You Going to Find Funding?
It really doesn’t matter if you plan on getting funding through hard money loans, private loans, or investing partners—you just have to know ahead of time where you plan on getting your investment capital. If you’ve done your homework here and you know your market, you’re practically ready to hit the ground running now.
Are You Prepared to Delegate?
You’re not going to be doing everything on your flips, and you need to be okay with that. If you don’t already have your real estate license and experience buying and selling houses, then you need to find a real estate agent you can trust to help you find and flip properties. You’re also going to need a general contractor or project manager to help you get your rehabs together and get them done efficiently.
And these are just the first examples of tasks you’ll need to delegate as a house flipper. As your business grows, you’re going to have interns, assistants, employees, contractors, and partners working for you, and you need to be able to let them help you out. The more ready you are to delegate the tasks that you don’t absolutely have to do, the better off you’ll be.