Flipping homes can be confusing when you are just starting out. Especially if you are new to the real estate industry. For you newcomers, here are some quick start steps:
1. Prepare yourself mentally. Determine your motivation for wanting to flip homes. Ideally, it should be emotional. For example, “I want to provide for my mom’s retirement”. This may seem silly, but your strong motivation is what will get you through the rough patches and will help you overcome your fears. Always remember your motivation during times of doubt or stress. Sharpen your mental attitude and energy. Believe that you can be successful flipping homes. Have faith that if someone else can do it, you can too. Another seemingly silly step, but if you don’t have this, you will give up when fear raises its ugly head, or when there is real work to be done. You have to believe you can be successful at flipping homes.
2. Begin your education. But, don’t go crazy. Read books focusing on the particular area of flipping you want to focus on. Read articles. The internet is a Catch22. It has an amazing wealth of information, but there is so much; you’ll need to be careful not to get overwhelmed. Read enough so that you are familiar with the process, but realize there are experts that will help you along the way. You don’t need to be the expert, at least not yet. That will come with experience. Just understand and accept that you will need to start before you are 100% comfortable. (This is tough for type-A personalities.)
3. Determine your investing niche. Decide which section of the home flipping market you want to begin with. Pre-foreclosures, bank-owned, HUD? Determine how much money you would need for each type, compared to what you have available or can get. Focus all of your energies on that one type of property. You can branch out later.
4. Find a foreclosure investment firm to represent you as buyer. Select one that focuses on the types of properties you want to flip. Speak with several. You will want one that not only understands the needs of investors, but one whose personality that meshes with yours. Be sure they understand your goals. You’ll likely be asking them to make offers that traditional agents may be comfortable with (creative financing, etc.), so this is why you want someone who invests themselves or who routinely works with investors.
5. Get your financial ducks in a row. Check your credit. Do what you can to improve it. Determine the capital you have to invest. Determine potential partners. Determine your funding source. Research potential lenders. Don’t forget Hard Money Lenders. Get pre-qualified from three of these lenders. These steps are biggies, but don’t let them overwhelm you. Take them one at a time and remember your motivation. Don’t forget to set goals.
6. Join a local Real Estate Investors Club.Attend meetings. Being around like-minded people will keep you motivated, not to mention networking opportunities.
7. Attend seminars. These could be real estate seminars, or self-help seminars. They will both build your confidence. Unless you have lots of money to spend on products that are thousands of dollars, go with the intention of being around like-minded people, and learning big picture ideas. Big picture ideas include, “Hmmm, I think I will invest in apartment buildings and I have an idea of where I should start”. Or, “I want to get an idea on how to protect future assets”. Going with the sole intent of benefiting from general knowledge will keep you from spending far too much money and will keep you from getting depressed at not being able to afford these sure thing products.
8. Find your property/ies. Yes, do your due diligence. That means, research area comparables. Visit the property. Have an inspection completed. Determine how much money you’ll need to invest in the property to flip it quickly. Understand the local market so you have a realistic turnaround time. Decide if the property is a good candidate or not.
9. Close on your property, rehab and flip. Start out flipping one property at a time. With more experience, you’ll be ready to handle multiple properties.
To your success flipping homes!