Question: What are the most important things to know about fixing and flipping houses for a newbie?

Answer by Jeanette Joy Fisher

Before you begin, make a real estate investing business plan for yourself. Fixing and flipping houses is only one way to make money investing in real estate. Make sure you either have plenty of cash or credit available to complete the project.

Flipping Houses: Seven Tips for Beginning House Flippers

1. You must know what a house will sell for once you fix it up. Prepare yourself with research and get to know your selected real estate market.The best way to determine which house will make money is to make a spread sheet of many houses.

2. You must know how much repairs and upgrades will cost. Learn how to estimate the costs of materials and labor. Go to your local home improvement store and get prices for all the materials needed.

3. You must know how to do math. Compare the purchase price, materials, labor, and expected sales price. Add in your holding costs, closing costs, and unexpected costs fund. Determine which houses offer the best profit and make many offers. Avoid the temptation to daydream about the changes you can make to one house and fall in love with that house. (I tend to want to fix all houses and my husband reminds me of the bottom line.)

4. You must know how to get the best financing for your situation. Will you use rehab financing, your own money, or an investment property loan? Talk to a loan officer and explore your options.

5. You must know how to do the work or know who you will hire to make repairs. You also will want to make changes that your future buyers desire. Learn which colors, patterns, and features bring top dollar without spending extra money.

6. You must have a plan of action so you can begin making repairs immediately. A house that sits after closing costs money daily for the mortgage and utilities.

7. You must know how to sell the house to a qualified buyer.

When you first start out in your flipping houses business, you'll want to look for houses needing only cosmetic work. Look for houses that just need cleaning up, painting, and new flooring. Use your imagination when viewing these homes. Try to visualize the finished house as you look at structural features and the surrounding homes.

Fixing and flipping houses can be much more than a way to make money. You can also help improve neighborhoods. Besides, turning a doghouse into a buyer's dream home is fun!

Learn how to fix and flip houses with the interior design edge for less money. Free Flipping Houses ebook.

Copyright © 2006 Jeanette J. Fisher