Wondering how to flip a house in 2023? Unlock the secrets to successful house flipping in 2023 in this article.
Flipping houses can look very easy on tv shows, but the fact is, it’s not if you don’t have the proper knowledge about it. But no worries, we got you.
In case you’re interested in how to flip a house in 2023, we prepared this article with eight steps you need to know to succeed.
Understanding what house flipping entails can help you decide whether it’s right for you or not.
Get a head start in this lucrative real estate market and find out if it’s the right investment opportunity for you!
What is House Flipping? How to Flip a House?
House flipping is when someone acquires a property they find to be undervalued and then resells it once they have given it a makeover.
This investing strategy can generally lead to substantial profits when you purchase properties for below-market value and provide them with a boost in value by renovating or remodeling them.
The profit you stand to gain will largely depend on your ability to recognize the right opportunities at the right time.
House flipping can be complicated, but we’ll make it easier for you.
This article explains everything you need to know about how to flip a house in 2022 and how it differs from other real estate investment types.
Step 1: Find out which market is right for you
You must choose a market with enough profit margin to be successful with your house-flipping business.
Hint: make sure you check the prices of comparable properties in the area and analyze which ones sell the quickest and what they may have in common. There are tools like Zillow where you can see property prices and compare them.
How can you determine if a market is great for flippers, though?
Strive to find a growing area, one where people want to live.
Also, look for a seller’s market. A seller’s market is one with few properties for sale and where demand outpaces supply. Homes usually sell faster and have a higher chance of receiving several offers under these conditions. A seller’s market is one where many people want to buy a house, but only a few houses are on sale. Your chances of receiving an offer at your desired price are much higher.
Step 2: Prepare a budget and business plan
When wondering how to flip a house, a business plan is essential to get your project off the ground.
Ask yourself these questions when you begin planning out the details of your project:
- What is my investment budget overall?
- How long am I willing to wait before seeing the return on investment?
- How much am I willing to pay for a house that I will then renovate?
- How much do I have available to invest in the house’s renovations?
- What will be my ideal profit after remodeling the house and selling it?
- Is the house I choose to flip the one that will give me the highest profitability?
- Is there another real estate investment that will give me a higher return?
Step 3: Get your house flipping financing in place
Before looking for properties, make sure you have a lender who can fund your deal unless you have all the cash available.
Luckily, many experienced people can help beginners find the right financing and learn how to network with lenders successfully.
Reach out to us today to get more information on how you can start flipping houses. We want to help you!
Step 4: Engage contractors in your project.
It is essential to connect with people who can benefit from your project. One way to do this is by networking with contractors.
They are an invaluable resource for house flipping projects as they can offer various services ranging from complex construction to basic home improvement tasks.
As a house flipper, if you don’t wish to perform the work yourself and are looking for someone who can help with your renovation, make sure you’re getting quotes from several potential workers or tradespeople.
This way, you’ll have more options when it comes down to hiring someone who will best be able to meet your needs!
Step 5: Purchase a property for flipping
We all know that finding a below-market price is ideal because the lower the price, the higher the profit after reselling it (if done right).
You can achieve this in several ways, including working with a real estate agent to discover on-market and off-market property deals.
You can also use tools like Zillow and Redfin to compare property prices within your proximity.
Another essential part of finding great deals is your patience. It takes time to research the price ranges of prospective flips versus how much they sell for after renovations to know if it’s worth flipping.
Step 6: Make an offer on a house
Before purchasing an investment property, it is best to draw up a contract and have it reviewed by a professional!
Have a trusted home inspector assess the property before signing the offer, putting down money for the property, or getting an escrow account ready to deposit your money.
The most important part: be prepared for repair and renovation costs. It’s crucial to have a cushion of money for the unforeseen expenses that can arise in the remodeling process. You always start considering a budget, but in some cases, it can increase with unforeseen reparations.
Remember: the goal here is to increase the house’s value by remodeling it, so you must ensure you have the budget to renovate it.
Remember that real estate is a business. You need to invest money to make money.
Before starting, you need to decide your investment goals and analyze the work scope.
Step 7: Perform renovations
Once you’ve settled on a property, it’s time to get to work!
Before committing, have your contractors determine the length of time needed for repairs and renovations.
If they anticipate this will take longer than usual, inquire why and clarify the reasons while considering other prospects.
Flipping homes successfully requires fine attention to detail. Many contractors will underestimate how long a project will take them, which can delay the sale of your home.
When interviewing a contractor for project pricing and scheduling, ensure that you have all the necessary labor costs and materials details to calculate your budget before moving forward.
Common things you can fix or renovate when buying a house to flip include:
- Exterior (curb appeal): landscape, windows, doors, driveway, walkway, or even the mailbox.
- Interior (overall): flooring, carpet, smoke detectors, light switches, all doors, wall painting, thermostat, heater, and A/C.
- Interior (kitchen): countertops, cabinets, knobs, handles, faucet, sink, appliances.
- Interior (bathrooms): toilet, towel hangers, shower doors, tiles, shower, sink, mirror.
- Other: water tank, electric system, drains, furnace filters, solar panels.
Remember that it is not spending to spend, but that renovations should be made that allow you to obtain a greater return on your investment.
When remodeling, kitchens, and bathrooms are the places that most increase the house’s value.
Hint: It is not about making the most luxurious arrangements but the arrangements that cost less and give greater added value to the property.
Step 8: Turn your fix-and-flip into a profit
In most cases, flipping homes ends with the simplest step – selling them!
Make sure you hire an expert real estate agent for your market.
Your real estate agent can help you find the property to buy and then sell the renovated version.
Before even putting a contract on the property, you should obtain the after-repair value (ARV) opinion from them.
After you sell the house for a profit, repeat the process until your real estate portfolio grows into an empire. That’s the idea with real estate investments.
[Related Article: Ways to Invest in Real Estate (Explained Simply)]
How to flip a house to build wealth
One of the most challenging aspects for many newbie house flippers is finding a trustworthy resource to turn to for advice and help in general.
That’s why we are here.
In addition to the help we can provide you, we can also link you to expert financial advisors, mortgage brokers, lawyers, and so on.
I am Juan Cano and want to help you become a successful real estate investor.
I do all the numbers on the property, calculate income, expenses, returns, etc., and can tell you if doing a flip with a specific property is the best use you are giving your money; otherwise, I will show you more opportunities to make the best investment.
If you’re ready to change your future, reach out to us today by clicking here or by calling us at (617)729-2967.