Let’s say you are interested in buying a home, fixing it up, and flipping it for a profit. Perhaps you’ve seen a show, read some articles, or have met successful people who do it for a living. But before you take the leap into the project, it’s important to look inside and ask yourself, “Why do I want to do this?” Spend some time to reflect and get real clear on your “why”, because flipping homes is not as easy as reality television makes it out to be, and when your project throws you a curveball and the going gets tough and stressful, you’ll want to be able to revisit your reasons for embarking on your project as motivation to follow through.
Research relentlessly, and gather as much information as you can on what is involved in the process. You might ask yourself, “Are the day to day tasks involved in this project how I wish to spend my time and energy? Does the thought of carrying out this project excite me and spark joy and excitement in me?”
For the right kind of person, with the right kind of skill set, and the right kind of mindset, flipping houses is an awesome way to spend your time and energy for many reasons.
When flipping homes, your efforts go towards increasing the value of an asset that would otherwise be wasted. You are making a neighborhood a more attractive place for its residents to live in. You are creating a comfortable home for families to live in who would rather buy a place that’s ready to move into instead of having to rehab it themselves. You have the opportunity to work independently and surround yourself with a team of passionate professionals to support you. These are just a few possible motivating factors to align with.
And if executed correctly and diligently, you can make some considerable dough for yourself in exchange for your efforts. Making money is healthy and good. And while profit might not be sufficient motivation in and of itself, it can still be a great inspiration for flipping houses. Why do you desire this money? What will you use it for? Perhaps you rightfully desire wealth and financial security. Or you wish to live a more luxurious lifestyle and enjoy the finer things in life. Maybe you want to own your own private home or raise a happy healthy family.
Get clear on your “why.” Write it down. Hang up your motivation in plain sight. Use it to inspire you.
It’s also important to ask yourself: “Do I have the skills necessary to successfully flip a house for profit?”
There are many skills involved in flipping a house including market research, networking, business math, project management, finance, communication, negotiation, home rehabilitation knowledge, and leadership.
If you don’t have all of the skills necessary, you can always acquire new skills. You can read books, take a course, join a networking group, seek paid work or volunteer on other projects that can give you new skills, or seek a mentor who you can offer some help on their projects in exchange for learning valuable skills. Where there’s a will there’s a way.
Before you go out evaluating potential deals, first get an idea of what kind of financing you can secure. There are a myriad number of ways to finance a home flip. If you can afford it, go ahead and finance a deal with your own cash, but even without a stockpile of cash in your savings account, there are still ways to finance a house flip. You can partner with a relative, co-worker, friend, or another investor who has the capital – you do all the work and split the profits with your investor 50-50. You can also borrow money from a hard money lender and be approved in less than 24 hours.
Next week, we will delve more into how to build a mastermind team for your flip.