Property flipping — more commonly referred to as house flipping — can be an exciting, engaging way to make money in real estate. However, there’s a catch: you’ve got to do it right to reliably turn a profit. And most people who try to flip houses for a living make a lot of costly mistakes at the beginning of their careers, if they ever succeed at all.
That’s not to say house flipping is that hard. But you must come in prepared.
A common misconception around real estate business is that it’s “easy.” While house flipping is a relatively simple and straightforward career, if you come into it with the mindset that it’s going to be easy, you might be headed for trouble.
Just like any other career worth pursuing, property flipping requires a basic amount of knowledge to get right, from hard money loans to HOA regulations. Fortunately, it’s also a business that you can learn quite quickly.
Whether you want some supplemental income or a whole new career, begin with the following steps to get your start in the house flipping business.
Get a Real Estate License
When you get started in any new career path, it’s important to come in as prepared as possible. That said, is it really necessary to have a real estate license to flip homes? The short answer is no, it isn’t. However, there are two very important reasons why you should NOT skip this step.
First of all, having a license to sell real estate yourself opens up doors that you wouldn’t otherwise have access to.
Even if all you plan to do is buy homes, fix them, and resell them through a Realtor, having the licensing to sell property yourself can make life easier (and business more lucrative).
The second reason for getting your license is even more important: the training materials you’ll study to get licensed are incredibly important to anyone working in real estate. Disclosure forms, zoning challenges, hard money loans, Homeowners Association regulations, and more are explained in detail.
If you don’t particularly like studying, this may sound unappealing. But it’s important to remember that, without having this information ahead of time, you’ll have to go forward unprepared, blindly hoping you’ll learn what you need to know when you need it. From accidentally breaking laws to making costly mistakes, this is never a good way to start a new career.
Getting the necessary education first thing can mean the difference between a stressful hobby and a pleasurable, fulfilling career.
Access the MLS
If you thought that Zillow was the only website you needed to buy and sell homes, think again!
The MLS, or Multiple Listing Service, contains accurate, verifiable information on every home listing. Mainstream property listing sites typically have incomplete, inaccurate information, so to do good business, you need access to this platform.
To access the MLS, you have to be a real estate agent registered with a national, state, or local association (another good reason to get your real estate license).
Purchase Property with Hard Money Loans
Once you’re finally ready to purchase a property, you need a way to finance your business. Some people choose to dig into their life’s savings for this, and others try to get conventional banks to loan them money. However, because house flipping is often seen by lenders as a risky business, banks may be difficult to work with. And do you really want to place your hard-earned savings behind a new, unproven business?
Instead, you might consider acquiring a property loan from Hard Money Georgia, the hard money loans Atlanta GA residents rely on.
Unlike traditional lenders, hard money lenders (or private lenders) provide loans based on the value of the property you want to purchase. In other words, instead of bringing collateral to your bank or showing off a great credit score, all you need to get a hard money loan is a great property that you want to buy. Naturally, you wouldn’t be buying it if it wasn’t valuable, so hard money loans are an easy and obvious route to take.
After getting your fix and flip loans, you just need to fix up the house and then sell it at a profit.
And there you have it: everything you should know to get started in house flipping.