A lot of new flippers get really overwhelmed when they think about everything they’ll have to take care of to flip a house. They worry about finding the money to flip a house, finding a good deal, hiring contractors, what to do themselves, permitted construction, which renovations really need to be done and which don’t, and the list goes on! Sound familiar? You’re not alone at all. Real estate investing can be very overwhelming if you don’t have a lot of experience, especially when it comes to everything you need to do to build your house flipping business.
In fact, I have a confession to make. I used to get really overwhelmed and stressed out, especially when I saw just how much work had to go into some of our projects. If Tarek went over our budget on a house, I’d get even more freaked out because I felt like we were about to spend all of this money and we couldn’t possibly see a positive return.
Well, if you want to be successful in this business, you really have to be comfortable taking risks. You also have to be able to make calm, rational decisions, even when you’re under the gun. I’ve found that breaking the whole process down into simple steps helps me keep everything in perspective. It’s kind of like having a checklist or a road map for your business.
Get the Word Out and Find Leads
If you’re just starting out, go ahead and send a letter or email out to everyone you know in the real estate investing business. Introduce yourself and let them know what kinds of properties you’re interested in. At the same time, brush up on your social media marketing. Create accounts on all relevant social networks for your business and start posting and gathering followers.
This step is all about networking and getting leads. Drive around the areas where you want to flip and look for vacant properties. Put signs out. Send postcards to motivated sellers. Talk with wholesalers. The more outgoing you are in this step, the easier the rest of the process will be.
Choose a Promising Property
Once you’ve built up your lead funnel a bit, start researching the properties at the top of your list. During this step, you’ll select one to make an offer on or to go bid on at auction. Research the property’s history. Make sure there aren’t any hidden debts or tax liens on it. Research comps in the area. Get as good a look at the house as possible. If you can, get inside with an inspector, general contractor, or project manager.
If it looks like a good, deal, go for it! Stick to your budget, and if the deal falls through, move on to the next property on your list. Repeat this process until you find a property that sticks and you have a motivated seller who accepts your offer.
Get the house inspected and bring your general contractor or project manager in to look at the place. Lay out a plan with them for how to fix it. Take on whatever tasks you’re comfortable with, but leave the big and complicated stuff to the professionals. Then you can just let them do their jobs and manage any budgeting issues that come up.
Hold Your Open House
Once your rehab is done, it’s time for your open house, and it’s pretty much all downhill from here. Greet your potential buyers and answer questions they have about the property. Point out its strengths and unique qualities, but mostly let them wander around and get a feel for how they see themselves living there and using the space.
Accept an Offer and Close
After your open house, you don’t have anything else to do on the property until you get an offer. Once you accept the offer and close, you’ll be ready to do it all again. In fact, after you flip a house, you’ll see how much of a breeze house flipping can be and how rewarding it is. With a few fix and flips under your belt, you’ll find that you can actually create a repeatable process for real estate investing and flip multiple properties at once to grow your business. It just gets easier and easier!