How to Start Changing Houses (and Actually Succeed at It)
Flipping houses is a popular activity right now. Your college buddy does it. The guy you used to work for does it. It looks like everyone on HGTV does that. Hell, even Scott Disick does it. It all seems simple: buy an old solid house, do some handwork, and resell it for much more than you paid. But let’s take a look at what it actually takes to make money by leaving houses and how you can get started.
How to choose a property for a coup
You will find your property through foreclosures, short sales through a bank and real estate auctions. But buying a property is not an easy task in and of itself, so treat this part of the process as you would any other home purchase .
Think of a few things when you do this too. You may find a dilapidated property with “big bones” or something else, but there are factors that will affect its resale value that you cannot control. Even if you create the most luxurious fairytale home, its location, for example, will affect its value. Check the cost of surrounding homes to get an idea of how much people typically spend on living in the area. People will spend more on quality, but if they can get the same quality in a better place, you might be out of luck.
If your chosen property is near a school, assume potential buyers might have children, so don’t skimp on your backyard. If it’s in the suburbs and close to bus stops that take workers to and from another city, consider that it might be better for you to focus on renting rather than selling. Make a general plan of what the home will look like, which person is best suited to live in it, and how you will meet the unique needs of its location.
Besides, there is no need to let anything in here. Follow the rules and make sure your work is of good quality. Is it possible to sell a house with poor-quality electrical wiring and a dubious building? Of course you can if the inspector doesn’t catch you, but you will earn a bad reputation and, even worse, you could actually hurt someone.
Prepare for the physical and mental strain of the upside-down house.
You may have experience in carpentry or electrical work, which will come in handy when you turn over houses. Conversely, you may not know how to hold a hammer and plan to hire someone to do this. Just know that you will end up doing some kind of work on this house, even if it’s small. You will be helping with planning, hiring and possibly even a little manual labor.
It won’t be easy. As long as you put physical and mental energy into this business, the stress of whether someone will buy it or not and whether it will pay off your investment will hang over you too. Get ready for this.
“The hardest part of moving homes is the psychological stress,” said 20-year-old homeowner veteran Daniel Gonzalez, CEO of Danny Builds Homes LLC . “You need to be mentally motivated to deal with pressures, deadlines, and the most common unexpected financial setbacks.”
Accept the fact that you may not sell the end product at the price you want. Depending on the housing market, you may not sell all of this, at least for a while. You have to spend money to make money, but it’s hard to reckon with, especially after you’ve spent all those long hours.
Learn about the real estate business
There is more to this business than just buying a house and working on it. It won’t hurt you to become well acquainted with real estate, building management, local laws, and more. Stay curious here. Heck, take a real estate course – there are a lot of them on the internet. Some of them even offer discounts through Groupon. A few hundred dollars spent expanding your knowledge can pay off in the long run, especially if it prevents you from making a critical mistake.
“The best advice I can offer to beginners is to make sure you have learned all the ins and outs of real estate investing. I’ve also seen so many people make so many mistakes and lose their hard-earned money, ”said Gonzalez, who teaches a monthly course in New Jersey.
See the bright sides
When you try to turn a house over, you will have to face physical labor and mental anguish, but there are several benefits as well. The first is obviously the payout option.
“I first started working in construction, and so did my family,” Gonzalez said. “I started the company at a very young age and realized that the money was going to the sale, not the contractor, so I switched to it and have been doing it ever since.”
This person has been doing this for 20 years, so there has to be money in it – if you do it right. Take it easy in the knowledge that this can actually make some money if you know what you are doing and are not trying to take the easy route.
Aside from money, there is something else you can count on: fulfillment.
Gonzalez said: “My favorite part is transforming from nothing into a beautiful home and knowing that I have built something that the family can enjoy and create new memories.”