If you’re a fan of fixer-upper reality television shows and would like to start your own business in the same field, then you’re definitely not alone. So many people are inspired by the design potential of older homes, turning something a bit rickety and dingy into a glamorous abode for a new family to enjoy.
It’s also a growing business that budding entrepreneurs are excited to give a whirl since the risk factor is relatively low and it allows for plenty of growth potential.
Check out our guide on starting your own house flipping business.
Research Your Market
An incredibly important step to take as you embark upon this journey is to first carefully evaluate the real estate market in which you’d like to flip houses. While the risks that come with this business model are not always terribly high, exercising caution is best.
Real estate values have been all over the place during the past few years, and you want to make sure that there is a viable clientele for the location you’d like to focus on. Also, you don’t want to lose a lot of money in case some of your plans don’t go your way.
Therefore, it is advisable to scope the scene and learn more about the properties available, especially if it is in an area of town with which you’re unfamiliar.
Financial Clarity
House flipping is a form of investment, of course. As such, it is incredibly important to evaluate your financial situation beforehand, to make sure that you can take on the risks without losing your own capital. You can look into securing some loans, but you cannot do so without getting your credit score in the clear. In fact, you will not be able to purchase property or do much of anything in the house flipping business without a high credit score.
That said, you need to look into your cash flow issue and see if, perhaps, there is a way to work this project into your life as a part-time gig while maintaining your day job.
Alternatively, look into your current cash flow situation, determine what kinds of loans you can take on, and research other funding schemes; real estate crowdlending options can be one of the most efficient and low-risk financial plans, especially if you know your way around the market. While you may not get an immediate return on your investment, it is best to map out your financial future as clearly as possible.
Create a Business Plan
Drafting a business plan, especially with the help of a financial expert, will help you create a general outline of your preliminary budget, set a contingency plan, and make smarter decisions about your house flipping endeavor. It is essential to avoid putting off this crucial component for long and to nail down your financial goals and realities sooner rather than later.
Team Building
Flipping a house is rarely a one-person job, and you should be able to build a team of highly skilled craftsmen right off the bat. You might be bringing your own skill set to the table, which is great. So be mindful of that, and try to hire others who compliment you. For example, bring contractors into the fold, or dedicated craftspeople who have considerable experience in building and remodeling houses. You can also look into talented interior designers who have a sharp eye for detail and quality, and who can bring that extra bit of “oomph” to your house flipping efforts.
Communication
Building strong and savvy marketing and communication scheme will be important to help garner the sort of clients you need for your business to succeed. Look into starting your own website to better advertise your properties and services, then also utilize social media tools to get your work out there. Without effective communication and marketing, your house flipping business is likely to fail before even launching. Real estate is big business, and it takes a bit of work to reach your target audience.
You should also consider attending different fairs and community outings in your community during which you can strike up conversations with others, and provide them with your business card. Talking to people in person is still the best way to market your business, so try not to skip this essential step.
If you’ve been glued to the tv watching these fixer-upper shows intently, and feel that it’s time for you to give the business a shot, then it’s worth taking the leap. However, some preliminary research is important, as well as talking to people with experience in the field and getting professional advice. When you have the right motivation to do something, you can move mountains– or in this case, flip houses.
